Background
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. As a result of the vulnerability and deprecation of the LP, Balancer no longer has a DOLA stable LP.
Motivation
So where does that leave Inverse Finance and the AURA fed?
Prior to this vulnerability the AURA Fed was scaling massively 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, the TWG, in close collaboration with the RWG, opted to seek a whitelist for new DOLA/USDC gauge on the Balancer forum. The request recently passed through Balancer’s governance successfully, with over 4.6M veBAL voting in support for the gauge whitelist.
This governance proposal aims to accomplish two things:
- Deprecate and remove minting rights to the current AURA fed attached to the deprecated DOLA/bb-a-USD LP.
- Launch a new AURA fed pointed towards a new DOLA/USDC pool, assigning minting rights to the Fed Chair multisig
The DOLA/USDC LP is expected to be a staple liquidity source and peg controller for DOLA, and we are excited to once again bribe and operate a Fed on the Balancer platform.