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Aura’s inception is just days away. If you’re wondering how AURA will be distributed over time, look no further than this blog.
Before diving into the nitty-gritty of how AURA will be distributed—largely to you, a member of the community—let’s cover what makes our tokenomics tick.
Planned, autonomous multi-year distribution: AURA will be distributed along a carefully thought out curve - its goal is to foster long-term TVL growth of Aura (and Balancer by extension) through the accumulation of ve token voting power, and thus the utility of vlAURA as a governance token. Due to the automation, participants can benefit from the reliability of future incentives. Governance does maintain the ability to issue more tokens after three years if deemed necessary.
No advantage to insiders: A concerted effort was made to create a community-first approach for AURA. No tokens are being distributed to venture capitalists or other centralized institutions. By not distributing coins to insiders, Aura avoids the problem of inactive governors whereby many institutional holders of governance tokens often cannot vote on proposals due to operational or legal complexities.
Smaller contributor allocation: 10% of AURA tokens have been allocated to the contributors, compared to the 20-30% often distributed to contributors. We want to avoid skewed governance and centralization of power. The contributors will have governance power in the ecosystem.
Aligning community stakeholders: Airdrops often fail to long-term align those that receive them. The incentive to hold and use these governance tokens is weak. Oftentimes, the group of addresses that receive airdropped tokens consists of generalist DeFi users without loyalty to any specific ecosystem or trend. The AURA airdrop was designed to create incentives for eligible airdrop recipients to become active, long-term participants in protocol governance via locking and penalty mechanisms. AURA is primarily being distributed to addresses that have shown previous commitments to DeFi protocols adjacent and complementary to Aura in Balancer and Convex.
Sustainable liquidity incentives: The use of using one's own token to incentivize liquidity for that same token, a farming tactic known as a “pool 2,” is being avoided to start. Pool 2 incentives can often backfire in the long run, creating a lot of inflation for potentially little reward to the protocol. AURA will instead rely on protocol-owned liquidity, and potentially a Balancer gauge for an AURA/ETH pool.
Value to early users and governance participants: Much of AURA’s distribution and the incentives to lock and utilize AURA in governance are weighted toward active governance participants and early users of the Aura protocol. The goal is to create a culture of long-term alignment via locking AURA into vlAURA amongst the community.
AURA will have a max supply of 100 million, and will be distributed as follows:
50,000,000 - 50%, Balancer LP rewards through AURA: To ensure Aura accrues maximal veBAL governance power and TVL over time, 50% of AURA supply will be rewarded pro-rata for BAL received via staking Balancer LP tokens or auraBAL on Aura. Rewards will be aggressive at the start, but will be distributed over 4 to 7 years, a timeframe dependent on the total units of BAL earned by the protocol.
10,000,000 - 10%, auraBAL liquidity rewards: Liquidity for auraBAL, Aura’s liquid derivative of veBAL, will be incentivized with 10% of the AURA supply distributed over four years. Rewards will be distributed to those that stake an LP token for a forthcoming auraBAL/[80/20 BAL/ETH BPT LP token] StableSwap pool on Balancer.
2,000,000 - 2%, auraBAL bootstrapping rewards: 2% of the total AURA supply will be distributed directly to auraBAL stakers over the first two weeks of the protocol. Those that choose to claim without locking will pay a 30% penalty in order to ensure AURA is utilized by active participants. Those that vote-lock this AURA will receive the full amount.
~2,000,000 - 2%, AURA LBP: To bootstrap AURA liquidity, vlAURA, and a treasury, 2% of the total supply will be added to a AURA/ETH LBP running over 5 days. Due to LBP weighting mechanics, roughly ~1.7% is expected to be distributed.
~3,000,000 - 3%, protocol-owned liquidity for AURA: After bootstrapping concludes, up to 50% of the ETH contributed will be used to form a protocol-owned 80/20 AURA/ETH pool on Balancer, matched with 2-3% of the AURA supply (dependent on the final LBP composition).
Any left-over tokens from this section will be distributed to the community treasury to be allocated by vlAURA governors.
Aura will also apply for a Balancer gauge for this pool to increase its yield potential for users that wish to add liquidity.
2,500,000 - 2.5%, initial airdrop: Tokens distributed to the Balancer, Convex Finance, and LobsterDAO communities.
2,000,000 - 2%, BAL treasury: Vested over two years, with expectations of alignment between Balancer and Aura.
1,000,000 - 1%, future airdrops: Earmarked to future airdrops. Eligibility for the airdrop will be announced at a future date.
17,500,000 - 17.5%, community treasury: Vested over four years, these tokens will be distributed to a treasury in control of a multi-sig. vlAURA holders will be able to determine how these tokens should be allocated to bolster Aura’s TVL or utility.
10,000,000 - 10%, contributor vesting: Tokens for incentivizing the Aura core contributors and additional contributors, to be linearly vested over two years. Approximately three-quarters of this tranche has been allocated to existing contributors.
Ahead of the AURA token and subsequent Aura protocol launch, feel free to join the conversation and take a role in our community via our Twitter and Discord.
Stay tuned for further information!
See you soon.
Aura’s inception is just days away. If you’re wondering how AURA will be distributed over time, look no further than this blog.
Before diving into the nitty-gritty of how AURA will be distributed—largely to you, a member of the community—let’s cover what makes our tokenomics tick.
Planned, autonomous multi-year distribution: AURA will be distributed along a carefully thought out curve - its goal is to foster long-term TVL growth of Aura (and Balancer by extension) through the accumulation of ve token voting power, and thus the utility of vlAURA as a governance token. Due to the automation, participants can benefit from the reliability of future incentives. Governance does maintain the ability to issue more tokens after three years if deemed necessary.
No advantage to insiders: A concerted effort was made to create a community-first approach for AURA. No tokens are being distributed to venture capitalists or other centralized institutions. By not distributing coins to insiders, Aura avoids the problem of inactive governors whereby many institutional holders of governance tokens often cannot vote on proposals due to operational or legal complexities.
Smaller contributor allocation: 10% of AURA tokens have been allocated to the contributors, compared to the 20-30% often distributed to contributors. We want to avoid skewed governance and centralization of power. The contributors will have governance power in the ecosystem.
Aligning community stakeholders: Airdrops often fail to long-term align those that receive them. The incentive to hold and use these governance tokens is weak. Oftentimes, the group of addresses that receive airdropped tokens consists of generalist DeFi users without loyalty to any specific ecosystem or trend. The AURA airdrop was designed to create incentives for eligible airdrop recipients to become active, long-term participants in protocol governance via locking and penalty mechanisms. AURA is primarily being distributed to addresses that have shown previous commitments to DeFi protocols adjacent and complementary to Aura in Balancer and Convex.
Sustainable liquidity incentives: The use of using one's own token to incentivize liquidity for that same token, a farming tactic known as a “pool 2,” is being avoided to start. Pool 2 incentives can often backfire in the long run, creating a lot of inflation for potentially little reward to the protocol. AURA will instead rely on protocol-owned liquidity, and potentially a Balancer gauge for an AURA/ETH pool.
Value to early users and governance participants: Much of AURA’s distribution and the incentives to lock and utilize AURA in governance are weighted toward active governance participants and early users of the Aura protocol. The goal is to create a culture of long-term alignment via locking AURA into vlAURA amongst the community.
AURA will have a max supply of 100 million, and will be distributed as follows:
50,000,000 - 50%, Balancer LP rewards through AURA: To ensure Aura accrues maximal veBAL governance power and TVL over time, 50% of AURA supply will be rewarded pro-rata for BAL received via staking Balancer LP tokens or auraBAL on Aura. Rewards will be aggressive at the start, but will be distributed over 4 to 7 years, a timeframe dependent on the total units of BAL earned by the protocol.
10,000,000 - 10%, auraBAL liquidity rewards: Liquidity for auraBAL, Aura’s liquid derivative of veBAL, will be incentivized with 10% of the AURA supply distributed over four years. Rewards will be distributed to those that stake an LP token for a forthcoming auraBAL/[80/20 BAL/ETH BPT LP token] StableSwap pool on Balancer.
2,000,000 - 2%, auraBAL bootstrapping rewards: 2% of the total AURA supply will be distributed directly to auraBAL stakers over the first two weeks of the protocol. Those that choose to claim without locking will pay a 30% penalty in order to ensure AURA is utilized by active participants. Those that vote-lock this AURA will receive the full amount.
~2,000,000 - 2%, AURA LBP: To bootstrap AURA liquidity, vlAURA, and a treasury, 2% of the total supply will be added to a AURA/ETH LBP running over 5 days. Due to LBP weighting mechanics, roughly ~1.7% is expected to be distributed.
~3,000,000 - 3%, protocol-owned liquidity for AURA: After bootstrapping concludes, up to 50% of the ETH contributed will be used to form a protocol-owned 80/20 AURA/ETH pool on Balancer, matched with 2-3% of the AURA supply (dependent on the final LBP composition).
Any left-over tokens from this section will be distributed to the community treasury to be allocated by vlAURA governors.
Aura will also apply for a Balancer gauge for this pool to increase its yield potential for users that wish to add liquidity.
2,500,000 - 2.5%, initial airdrop: Tokens distributed to the Balancer, Convex Finance, and LobsterDAO communities.
2,000,000 - 2%, BAL treasury: Vested over two years, with expectations of alignment between Balancer and Aura.
1,000,000 - 1%, future airdrops: Earmarked to future airdrops. Eligibility for the airdrop will be announced at a future date.
17,500,000 - 17.5%, community treasury: Vested over four years, these tokens will be distributed to a treasury in control of a multi-sig. vlAURA holders will be able to determine how these tokens should be allocated to bolster Aura’s TVL or utility.
10,000,000 - 10%, contributor vesting: Tokens for incentivizing the Aura core contributors and additional contributors, to be linearly vested over two years. Approximately three-quarters of this tranche has been allocated to existing contributors.
Ahead of the AURA token and subsequent Aura protocol launch, feel free to join the conversation and take a role in our community via our Twitter and Discord.
Stay tuned for further information!
See you soon.
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