[AIP-21] auraBAL Wrapper Creation

Proposals
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Authors: Yakitori, Fry

Background

Aura allows users to deposit their [80/20 BAL/WETH BPT] and receive auraBAL, instead of the non-transferrable veBAL. Tokenised auraBAL is given to the user at a 1:1 rate for veBAL, and is tradeable on Balancer Finance. This BPT is then locked up by the Aura protocol for the maximum time in Voting Escrow where it will allow Aura to benefit from its voting power for boosting rewards & voting for gauges.

Currently, Aura’s BAL fee (25% of all BAL farmed) is used the following way:

  • 20.5% goes to auraBAL stakers. This is paid out as BAL + AURA + bbaUSD.
  • 4% goes to AURA lockers. This is paid out as auraBAL.
  • 0.5% goes to the harvest caller. This is paid out as BAL .

Motivation

A healthy ratio between auraBAL and veBAL is important as it gives depositors confidence that they will be receiving valuable consideration for deposited veBAL, and peace of mind that they will be able to smoothly exit the system should their personal circumstances change. This certainty is what will allow Aura to continue accumulate veBAL governance power through user deposits. Currently, the auraBAL peg is a healthy 98.21%, the highest peg of available liquid wrappers on market.

Terms

This proposal aims to strengthen Aura’s accumulation of veBal by creating a new wrapper for auraBAL that has auraBAL and AURA as reward tokens. This wrapper reward contract will use all BAL and bbaUSD earned from the base auraBAL reward pool to market buy auraBAL. Fees will be immediately changed from 20.5% to auraBAL, to 18.5% going to auraBAL and a 2% capped platform fee. This 2% will be sent directly to the wrapper as auraBAL to increase the base yield. This additional reward ensures that there is a strong incentive for auraBAL stakers to migrate to the new contract as rewards will be higher.

Specification

The new BoostedAuraBalStaking contract will accept auraBAL as the staking token which will be staked into the existing AuraBalStaking. Rewards from the AuraBalStaking will be harvested each epoch. bb-a-USD and BAL will be batch swapped on Balancer for auraBAL. All of the auraBAL in the BoostedAuraBalStaking contract will be re-staked into AuraBalStaking to auto compound rewards.

The protocol DAO multisig will call setFees on the Booster with the following values, 1850, 400, 50, 200. The multisig will also call setTreasury on the Booster with the address of the BoostedAuraBalStaking contract once available. In the interim fees will be collected to a reward forwarder contract. Then forwarded to the BoostedAuraBalStaking once deployed.

Voting

This forum post will be live for approximately three days before the Snapshot proposal goes live. We appreciate and encourage an open discussion on this subject.

This vote will be a single-choice vote. You may vote “For” or “Against” this proposal, or choose to abstain from the vote.

By voting “For” this proposal, you are voting in favor of the creation of a new auraBAL wrapper, and changing fees to 18.5% to auraBAL and a 2% platform fee, implemented upon approval of this proposal.

10 Likes
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Thank you and @Yakitori for your hard work on getting this set up–looking forward to the implementation!

1 Like
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Hmm. I love the Idea, but as it’s now an AIP going to governance I have a few questions

Any more details on the specifications? The wrapper which you are describe sounds more like a vault than a simple wrapper. Are the Aura contributors going into the business of building and operating vaults now? Who is going to keep this new construct? How does that change the security posture/no-stop philosophy of the aura protocol?

What happens to the AURA earned from staking, and if it’s not just sold and staked for auraBAL how does that work? Is it emitted to holders? How does that work, using the same rewards distribution system as now/passed through?

Will this new wrapper be upgradable, what happens if Balancer changes the dollar token paid out?

Is the new wrapper code-complete and available for review?

This seems really cool, but I this vault sounds complicated. Have we considered working with a partner who has already well proven tech and operational know-how running these kinds of vaults, like Yearn or Beefy to work with on this?

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Hi Tritium,

Single-assets vaults are generally elementary to build, Aura has top-notch solidity devs, so I’m sure we don’t need a third party here.

2 Likes
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Is this a single asset vault? It seems like it also emits AURA? Maybe I misunderstand.

Also in my experience, vaults are almost always upgradable so that they can be changed when required. For example, at some point the bb-a-usd that is currently being emitted will be retired and replaced with another interest baring dollar due to this reentrancy problem.

When that happens a vault strategy will need to be adapted to handle the new token, and new routes may need to be coded in.

So far, all of AURA’s code has been non-upgradable and no-stop. While it’s maybe only a matter of principal, that’s a strong statement. Does adding a vault into the mix force the DAO to kind of change it’s identity, and do we want to do that?

I really don’t know the answers here. This is a good idea and I’d like to see it happen. I’m just trying to figure out what this governance is about and how it will end and I think there’s still a lot of unanswered questions.

I have no doubt that the Aura contributors are 1000% capable of doing this work.

2 Likes
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It’s single asset, just like a Beefy vault: deposit AuraBal, get more AuraBal. You can get another reward token (Aura), but this is, again, simple to implement.

You don’t need to have an upgradable contract – beefy contracts, again, aren’t. If the vault has to be updated, people can just withdraw and redeposit in the new vault.

I’ll let @0xMaha add any details if there is a need for it.

5 Likes
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I can chime here and say I echo @Yakitori 's statement. It’s a fork of a classic yearn vault with a single immutable strategy and some added functionality to support an additional reward token (AURA). That functionality is the same as our BaseRewardPools. So it’s pretty straight forward. Even though it is just a fork it will still go through the same strict development process as everything else and be audited, thoroughly tested and independently reviewed. It follows the same security principals that Aura has always operated with.

4 Likes
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very excited for this. well done all

I’ll echo Tritium’s comment that the token paid to veBAL lockers (bbaUSD) is certain to change in the future, at least to the new bbaUSD on Aave 3. I imagine that does not present any issue here of course but good to note.

4 Likes
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Cool, I like the change.

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Did we drop the idea of alternating between Minting and Market Buying depending on where the peg is? Not a huge deal I guess but worth asking about.

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This is a great culmination of the some of the discussions that have been happening on the Aura forum. This is an excellent means of ensuring that veBAL capture continues to grow!

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Nice proposal ! I believe it is also very convenient for projects willing to work around auraBAL, composability increased :slight_smile:

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See Snapshot.

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Nice work with the discussion and proposal, folks. lets send it!

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