Summary: Building on our efforts to expand liquidity for DOLA on new exchanges, this proposal aims to authorize the launch of the “Aura Fed” meant to support our DOLA-bb-a-USD pool on Balancer.
Background
Around March 2022, Balancer (AMM) Protocol launched a ve-style tokenomics system, identical to Curve’s in order to control the BAL rewards going to LPs. The upgrade had a slow start in terms of usage and people locking their BAL tokens. Then, in June 2022, AURA, a direct fork of Convex, launched, leading to a significant increase in the efficiency and usage of the veBAL ecosystem. LPs could now get max rewards boost by depositing liquidity into Balancer via AURA, without needing to have a large personal veBAL balance. Redacted Cartel shortly thereafter launched Hidden Hand, a system used for bribing vlAURA holders, much like how Votium is used for bribing vlCVX holders.
As of right now, bribing AURA holders is more efficient compared to bribing CVX holders:
- $1 bribe on Votium generates $1.30 of rewards to LPs on Convex
- $1 bribe of Hidden Hand generates $1.83 of rewards to LPs on Aura
Motivation
On October 9th, a proposal to enable the DOLA-bb-a-USD gauge passed via Balancer governance. This means as of now, Inverse Finance can launch an Aura Fed (Fed that mints and deposits DOLA directly into an LP on Balancer, and deposits this to AURA to farm the rewards) while bribing for this LP, allowing Inverse Finance to harvest/reclaim a sizeable portion of the rewards.
This allows for Inverse DAO to exercise immediate peg control/management whilst also building up a sizable bag in Aura which will be used for voting and directing further emissions to DOLA gauges.
This is important for the DOLA ecosystem as it means we are trending towards sustainability (not reliant on a single 3rd party for DOLA liquidity, or bribing with the INV token), as we lessen our dependance on the Curve ecosystem for DOLA liquidity (reducing risk to the DAO in the event of a CRV, CVX death spiral). This will also likely generate large, permanent revenues for the DAO, and result in an LP with depth large enough to facilitate very successful stableswaps at size, clearing the way for a strong launch of our new lending product.
On chain actions
grant DOLA minting rights to the aura fed contract