Aura Finance: Chakra Alignment (17 April 2023)
With Aura reaching new all-time highs for Total Value Locked on a near weekly basis, and an increasing capture of total veBAL, the future for Aura Finance continues to look extremely secure.
Welcome to the Easter edition of Chakra Alignment! For many, these past few weeks have been full of angst and tension. With regulators in the USA pushing an anti-crypto stance after the FTX debacle and ongoing concerns about inflation and geopolitics, it can be easy to get caught up in the negativity. But for meditators, a calm and incisive mind will overcome any of the concerns of the present!
With Aura reaching new all-time highs for Total Value Locked on a near weekly basis, and an increasing capture of total veBAL, the future for Aura Finance continues to look extremely secure. The upcoming moves to Arbitrum, and Optimism shortly after that, are further proof of the strong plans for growth and defi integrations that are currently underway. Meditators can look to Aura’s new launch partners on Arbitrum, such as Lido, Beefy and radiant, as further evidence of an ecosystem that is hungry for the kind of deep liquidity that Aura and Balancer can provide.
So sit back, relax, and prepare to align your Chakras as we delve into our 7th Chakra Alignment.
- Total Value Locked $0.77B - (Increase of over $70M)
- Percentage of veBAL controlled: 27.9% - (increase of just under 1%)
- Total vote locked Aura: 15.2M - (1M increase!)
Top 3 Incentives providers for vote locked Aura
🥇 Stargate 50/50 bb-a-USD/STG w/ $125K rewards allocated
🥈 Rocket Pool’s MetaStable rETH/WETH w/ $100K rewards allocated
🥉50/50 AURA/WETH w/ $93K rewards allocated
The AuraBAL pounder has launched!
As a result of the successful implementation of AIP 21, the new AuraBAL wrapper is here. The new wrapper is currently auto-compounding deposited AuraBAL into more AuraBAL and Aura tokens without the need to compound individually nor to deal with small amounts of bb-a-USD. With all fees and accrued BAL being used to market buy AuraBAL this mechanism greatly supports both the AuraBAL peg and the accumulation of veBAL for Aura (100K auraBAL were minted in the month of March alone!). Please note, depositors will still need to claim their Aura on the app but the AuraBAL is auto-compounded.
The LSD Narrative
Well after months of talk, it looks like the Shanghai upgrade is upon us. This upgrade will allow those who have staked their ETH to finally withdraw their deposits and this will undoubtedly place new pressures on protocols offering Liquid Staking Derivatives (LSD). This pressure may come from a surge in withdrawals, from an ever-increasing competitive landscape or from reduced requirements and competitive moats that have enabled the LSD narrative to function for these protocols.
On the other hand, with only 15% of ETH actually staked, the ability to withdraw your ETH may very well mean a surge in ETH deposits and people choosing the flexibility that the Shanghai upgrade offers. This added flexibility for withdrawals will also lower the barrier to entry for new staking players in the ETH world and so may drive down the fees earned and charged by larger LSD players…. Only time will tell how the market will react, but incentivizing depositors is likely to increase as the competition heats up and the need for ever greater deposits drives staking pools to greater lengths to attract those deposits.
As this competition grows and the total ETH staked approaches multiples of the current percentages, the clear winners will be those who provide the services these protocols need. As they say, in a gold rush, better to be the one selling the shovels than the one digging in the dirt! (NFA!)
Also, check out the newest LSD protocol looking to participate in the Aura Finance ecosystem, unshETH.
Total Value Locked reaches $770 million USD
The TVL growth for Aura and Balancer continues to defy the bear market. Almost every week we see new all time highs in TVL and considerably greater exposure for Aura. With near constant new integrations and partners, such a rise in TVL is not surprising, but it is nonetheless a very important achievement. To take a look at how much Aura has grown, head over to defi Llama and observe the steady march of the Aura protocol and its TVL.
After nearly a month of Twitter teasing the time for an Arbitrum launch appears to be upon us. Arbitrum has been all over Crypto Twitter since their Airdrop and their first governance vote, and they have been there for good reason. Arbitrum has only 1/10th the TVL of Ethereum and yet has just on 50% of the daily volume. What this means is that users are highly active on Arbitrum and are using and leveraging the opportunities inherent within DeFi.
Aura is very well positioned in this space to make a move into the Arbitrum ecosystem with the promise of providing significantly more incentivized deposits which in turn will increase liquidity and prevent illiquid markets from inhibiting DeFi applications. In a world of leverage, the need for liquidations is key, and that requires deep liquidity! BOLO for new partners who will enable leveraged positions and exciting announcements from Aura as preparations for launch continue.
Hidden Hand and AIP 22
Due to technical issues with the Hidden Hand automated voting process (resulting from an issue with the bot host), the Hidden Hand Protocol was unable to properly place their votes for the incentive round ending on March 30, 2023. In order to achieve fairness and regularity for both voters and projects placing voting incentives, Hidden Hand’s delegated votes were included retroactively as intended. The proposal passed but had some excellent discussions regarding the process and the timeliness of making such a change.
Most notably, the outcome of the vote was in favor of allowing the votes from Hidden hand to be included which enabled all delegators and direct voters to receive their emissions as intended. This was especially important as it ensured that the protocols who offered incentives received the votes and their requisite emissions and that the entire system functioned effectively.
AIP 23 Enable additional reward tokens on OHM/wstETH gauge
This proposal aims to deepen the partnership with Aura and to demonstrate the capability of Boosted Liquidity Engines (BLE) for protocols. Olympus DAO has become a major stakeholder of vlAURA and considers Balancer as its primary liquidity hub. BLE is a next step toward fulfilling the potential of the relationship between Olympus DAO, Aura, and Balancer.
Olympus DAO wants to have the optionality to add additional reward tokens on Aura to the gauge, which requires a governance vote in order to set up the contract. The wstETH/OHM vault is the first deployment of a BLE. As third parties add wstETH into the vault, the protocol will mint OHM to match this and deploy it into the liquidity pool and stake it to receive incentives.
All the reward tokens earned through this vault will be directed to wstETH depositors. The protocol itself will not receive these tokens, with the exception of trading fees which are accrued inside the LP token itself.
Liquid vote locked Aura
Jones DAO has just launched their jAURA product with 2 different product types.
- A liquid staking derivative (LSD) Vault, which gives you the receipt token $jAURA, and
- A non-tokenized Vault which does not give you a receipt token.
The LSD version provides you with a highly composable receipt token for use in other defi related ventures for more yield opportunities. Withdrawals from the tokenised versions of the positions are then subject to some penalties depending on the time frames involved with fees accruing to both Jones DAO and to Aura!
The non-LSD version allows for a more standard auto-compounding and incentive maximizing strategy very similar to what is currently on offer from Badger DAO with the graviAURA product. Please note that the graviAURA product also has an auto-voting feature to support protocol integrations whereas the Jones version has a more user focused model. Paladin, through their warden product, also has a vote delegation function for vlAURA which provides returns. All of these options (TBC once jAURA launches) are excellent for smaller users with less than 500-1000 vlAURA to minimize their gas fees when claiming incentives.
Composable Stable Pools
Well for starters, what the heck are they? Well it is important to understand them because over 600M of Balancer TVL is locked in Composable Stable Pools and this number will likely continue to grow. They’re one of the many technical components of Balancer’s flexible AMM framework and they’re essential for tokens like stablecoins or LSDs. Composable Stable Pools are designed for assets that are either expected to consistently trade at near parity, or at a known exchange rate. So which assets are best suited for meta-stable pool liquidity? Either pegged or correlated.
- Pegged assets would include stables (DAI) or synthetics (wBTC).
- Correlated assets include but are not limited to liquid staking tokens (rETH) or boosted pools (bb-g-USD).
While in Balancer, these composable meta-stable pool assets are able to trade freely within the nested pool network composed of other meta-stable pools.
Token swaps can occur between any and all nested pools within Balancer. This means that meta-stable assets are eligible for capital efficient swaps for example between Aave boosted pools and Rocket Pool LSD ETH.
Nested swaps allow for meta-stable pools to harness Balancer’s liquidity network for the most effective routing and the deepest liquidity. This feature is especially important as Balancer and Aura prepare to move to Arbitrum with partners like Lido, Radiant and others, to drive deep liquidity for LSD and stable swap pairs.
Enzyme Finance has recently partnered with Balancer to include 10 pools in their asset manager portfolios. Recent integrations as of this week now include 6 of those BPT deposited on Aura Finance for even greater yields. For more details check out their medium post below.
Twitter has been focused on macro economics, Shanghai upgrades, Arbitrum governance and more. An exciting time to be alive and to be learning about all the interesting developments under way. The twitter content for Aura lately has been heavily focused on partner integrations and it is in these juicy tweets and threads that some of the best Alpha can be found!
Our tweet of the week:
DCF GOD @dcfgod. This is a weird tweet to be our tweet of the week, but the implications are just too interesting to ignore. It appears there may be something brewing involving Dinero, the new stable coin product to be launched by Redacted Cartel, and Aura Finance. How this will integrate and what is going on is not entirely clear…. Maybe the pxETH and ETH that back this new PSM focused stable coin will find a home with Balancer/Aura….??
Teller @useteller have recently launched their secured lending pools for Aura and auraBAL as collateral. You can now either lend or borrow these assets on Teller with their varying APY system. Feel free to check out their tweet here if this is something you are interested in.
@JonesDAO_io The Jones DAO thread storm, including their recent delay for 7 days, can be better understood from their tweet explaining their vaults, their fees etc. This is the same information included in the news section of the chakra above.
Sense Finance @senseprotocol have announced an upcoming integration with Aura finance to add to BPT composability. Starting with the wstETH-rETH-sfrxETH pool.
Patrick | Dynamo DeFi @Dynamo_Patrick has shared a chart showing the clean and clear increase in TVL for Aura finance over time. With comments from SmokinTed | HCS 🥊🥊 @_SmokinTed agreeing in pretty darn strong terms!
0xGattaca @0xGattaca is a pretty big fan of some new plays using Aura Finance and the cbETH staking option for leveraged and looped yields. We agree with your assessment of course, that the BD team is absolutely slaying it!
It is worth calling out the efforts from Synapse protocol recently as they move their POL over to Balancer and Aura. In the most recent voting round Synapse provided over 50K worth of incentives and have grown their TVL to over 1.7M since launching.
TranHoan_37 @tranhoan_37 Is continuing to DCA into Aura and believes in the long term bullish approach that Balancer has established for the upcoming Shanghai upgrade!
YouTube content is back on the rise with great new stuff entering the space to update our community! CAVEAT: with a great project and lots of attention, the scammers are on the rise. Please be wary of those offering staking solutions on chains not supported by Aura with returns in the hundreds of percent. If it looks to good to be true… then it is probably some low life scammer son of a bitch!!
Trantor has recently released his Easter update after a few months away from posting. Check out the latest updates on Aura Finance here:
Dune dashboards and Analytics:
The ongoing accumulation AuraBAL will remain the most important metric for Aura in the medium term as veBAL in the form of AuraBAL provides dominance of the ecosystem that is essential to the Aura value proposition. With that said, the incentives market continues to be a place that drives a lot of interest in the community. This dashboard from votium is instructive on the rise in interest in directing liquidity across the entire Balancer ecosystem.
To get the latest on Aura governance updates head over to the Aura Discord and be sure to follow Aura Finance on twitter.
The Chakra Alignment series is not official Aura correspondence and is written by community members.