Launch AuraEuler Fed to support new DOLA-bb-e-USD LP on Balancer


This proposal intends to launch a second Aura Fed, dubbed AuraEuler Fed, meant to support the new DOLA/bb-e-USD LP on Balancer. By doing so, Inverse can build up the liquidity of this new LP, and further develop DOLA on the Balancer/Aura ecosystem.


On January 6th, Balancer labs identified a critical issue with their bb-a-USD product that could not be thwarted using their emergency DAO. As a preemptive measure, Inverse Finance deprecated the DOLA/bb-a-USD LP. At the time the LP had over $8.7M TVL, but thanks to the Fed Chair’s swift actions, the pool shrunk to ~$150k in little over 48 hours after the announcement. No Inverse DAO funds or user funds were lost. Pools previously paired with bbaUSD are transitioning to use bb-e-USD (Balancer Euler Boosted USD) as Balancer awaits the coming migration of bbaUSD to use Aave V3, which is expected in the next few weeks. Emissions for these new LPs, including the new DOLA-bb-e-USD LP, began on February 16th.


Prior to the bb-a-USD vulnerability, the Aura Fed was scaling successfully with over $8M TVL completely sustained by fed profits recycled back around into bribes for the pool. This flywheel proved to be a powerful tool to secure DOLA liquidity depth for the DAO. To continue the success of this system and while we awaited a resolve, the TWG, in close collaboration with the RWG, opted to seek a whitelist for a new DOLA/USDC gauge on the Balancer forum. The request passed through Balancer’s governance successfully, with over 4.6M veBAL voting in support for the gauge whitelist, and as of Inverse governance proposal #86, the original Aura Fed was redirected to point to the DOLA/USDC LP. This LP now sits at over $11M, and has been instrumental in once again bringing deep DOLA liquidity to Balancer.

As of BIP-178, a new configuration addressing the potential issues related to Balancer’s previous composable stable pools (v2) has been deployed.This pool uses is composed of three Euler linear pools and is called bb-e-USD. The underlying tokens are USDC, DAI, and USDT. These are wrapped through Euler’s market to earn LPs additional yield. Euler is a heavily audited and battle-tested protocol and we have confidence in assuming this added risk in pairing DOLA with the bb-e-USD product. At this stage, we are ready to launch the AuraEuler Fed meant to support this new LP.

These two DOLA stable LPs on Balancer are expected to be a staple liquidity source and peg controller for DOLA, and we are excited to continue bribing and operating a second Fed on the Balancer platform.

On-Chain Actions

  • Launch AuraEuler Fed pointed towards a new DOLA/bb-e-USD pool, assigning minting rights to the Fed Chair multisig