Authors: SmallCap and Tritium
Aura stakers (via vlAURA) are currently under-represented in Balancer governance due to low voter participation, even inclusive of the Aura veBAL delegate council. With an increasingly competitive governance outlook, Aura as a DAO risks having its views grossly under-represented as other entities use their full veBAL voting power and show up consistently to every proposal. This proposal seeks to change Aura’s governance model for Balancer Improvement Proposals (BIPs) to consistently promote Aura DAO’s views and to better account for the diverse views of all vlAURA governors.
Aura DAO risks being under-represented with its current governance setup.
As it stands, vlAURA holders have their holdings mapped to underlying veBAL (e.g. if you own 1% of vlAURA, you can control 1% of veBAL owned by the Aura protocol). Votes need to be cast via Balancer’s Snapshot, and do not appear on Aura’s Snapshot. While this was implemented with goodwill by Aura’s contributors, this has led to subpar voter participation, and as a result, inefficiency and a disadvantage for the DAO due to unused veBAL.
Not all vlAURA holders show up to vote for BIPs. And the Aura veBAL delegate council, which was set up to solve this issue, still lacks widespread usage by all vlAURA holders since it remains an opt-in.
As this issue has come to light, other metagovernance protocols and veBAL holders have made the choice to direct voting power toward increasingly centralized entities. In one case, one metagovernance protocol delegated all of its veBAL voting power to one individual.
Aura currently exists in a disadvantaged state compared to these other protocols because the diverse group of vlAURA governors cannot vote in a bloc.
Delegating all of the DAO’s veBAL to one person and/or a council, made up by some sort of political wrangling, feels like a step away from decentralization. A council voted in by holders works in general scenarios, but there are edge cases where the council may represent the views of all vlAURA governors in one vote but not in the next.
Aura can instead create a Snapshot vote on its own page for every Balancer Snapshot vote. Further, vlAURA holders will be able to vote to direct 100% of all veBAL owned by Aura DAO via EIP-1271. This has the effect of allowing for greater decentralized decision making amongst vlAURA governors on a vote-by-vote basis, while ensuring that the DAO is using the full brunt of its governance power to advance the interests that the DAO collectively decides are important.
Should this proposal pass, Aura’s Snapshot will begin to display BIPs in line (so simultaneously, and without censorship) with Balancer’s Snapshot, similar to Convex’s governance implementation for Curve and Frax votes.
The outcome of the vote will then be binary: if a majority of active vlAURA votes “yea” on a proposal, all underlying veBAL owned by Aura will be used to vote “yea” via Balancer Snapshot. The vice-versa is also true. Via EIP-1271, the protocol multisig will be responsible for casting the votes. This should ideally be moved on chain in the future.
Abstain: Reflected Aura votes will contain an “abstain” option. This way Aura can avoid throwing it’s weight around into areas it has no interest, or wishes to take a neutral stance on.
Quorum requirements: To ensure adequate decentralization, votes on BIPs will only be valid if a total of 2,000,000 vlAURA vote either “yea” or “nay” on the proposal. This 2,000,000 vlAURA number represents over 20% of all circulating vlAURA as of this proposal’s writing. To note, 17% is the average vlAURA turnout to all historical Aura Improvement Proposals (AIPs).
Delegate Council: This proposal does interfere with the existing state of delegation in the Aura system, including the Aura Delegate Council. The Council will act as the only fallback voter if the BIPs that appear on the Aura Snapshot do not meet the aforementioned vlAURA quorum. If the Council somehow fails to come to a conclusion, no vote will be cast, though this is an unlikely scenario.
Knock-On Effect for Balancer: This proposal will slightly affect Balancer’s governance implementation. To avoid the veBAL from Aura being used twice, Balancer will need to update their Snapshot strategy to exclude the veBAL mapping pass-through as it exists today.