Gauntlet is excited to announce our partnership with Jupiter, with a focus on providing risk management and optimization recommendations for their perpetual exchange.
Effective risk management and optimization strategies are pivotal for the long-term functionality and growth of perpetual protocols. Ensuring user safety and operational efficiency requires continuous adjustments across a spectrum of elements, including fine-tuning the weights in the JLP pool, margin and leverage requirements, borrowing rates, and trading fees.
Our objectives will support the Jupiter Perpetual Exchange’s mission through an examination of the protocol’s goals and key mechanisms. This includes:
- Conducting an in-depth analysis of protocol operations and settings,
- Evaluating the balance between capital efficiency and associated risks,
- Developing a strategy for fine-tuning protocol settings,
- Identifying metrics for oversight and notifications, and
- Offering ongoing suggestions for parameter adjustments.
The aim is to harmonize capital efficiency with protocol risk by tracking essential indicators and guaranteeing protocol adjustments align with changing market conditions.
Services offered by Gauntlet encompass:
- Custom dashboard development,
- Monitoring and notifications,
- Real-time modeling,
- Dynamic parameter adjustment, and
- Proactive risk evaluation.
Initially, Gauntlet will conduct a risk evaluation of Jupiter’s perpetual trading platform and develop bespoke risk models. These models will be continuous, providing immediate insights into risk management and actionable guidance on critical risk factors, including:
| Parameter | Description |
|---|---|
| Trader Open & Close Position Fees | Opening & closing perpetuals position fees |
| JLP Deposit & Withdrawal Fees | Fees related to depositing and withdrawing LP |
| JLP Spot Swap Fees | Swap fees for trading spot assets in the JLP |
| Borrowing Rate Fees | Fees paid by perpetual traders during the life of the position |
| Asset Target Index Weight | Target weight of the asset in the JLP |
| Max Leverage | The maximum leverage of a market |
| Global JLP AUM Limit | The maximum size of a pool |
| Global Market Open Interest Limits | The maximum OI for long and short positions |
| Max Position Size | The maximum size of an account position |
Next, Gauntlet will release a dedicated risk management dashboard, showcasing vital risk metrics and utilization data, along with Gauntlet’s parameter recommendations.
Stay updated on the dashboard launch and further partnership news by following both Gauntlet and Jupiter.
About Gauntlet
Gauntlet is an end-to-end solution provider for on-chain market risk management. Founded in
2018, we have experience protecting DeFi protocols throughout market cycles and black swan
risk events. We achieve this via active monitoring of on-chain positions and liquidity to make
regular as well as urgent risk parameter adjustments to keep clients optimized to current market
conditions.
Gauntlet’s platform quantifies risk, runs economic stress tests, and calibrates parameters
dynamically through a joint optimization function. We use agent-based simulation models tuned
to historical and current market data to model tail market events and interactions between
different users within DeFi protocols. As new risk scenarios are observed in the market, we
adjust our methodologies to account for them, leveraging new parameters and risk mitigation
mechanisms developed by our clients. Gauntlet’s methods mature and evolve as the industry
does.