Authors:
Json, Lamentations (Aura Finance Contributors), with support from Balancer Maxis
Summary
This proposal seeks approval from the Aura Treasury to provide up to 1.5M AURA for liquidity on to an ARB/BAL/AURA pool held as POL by a shared escrow with Balancer, following any potential Arbitrum launch.
Motivation
A number of Aura Finance Contributors are currently working on developing cross-chain instances of Aura, starting with Arbitrum. These instances, should they be approved by governance, are being made possible by Balancer’s Layer 0 compatible gauge development. Based on community conversations, it has become clear that there will be a demand for AURA liquidity on Layer 2 should Aura launch there. We would like to propose to the Aura community to form a bi-partisan liquidity pool seeding of AURA, ARB, and BAL.
As part of the Arbitrum token launch Balancer DAO was allocated ~3M ARB tokens 2. Recently, Balancer Maxis have proposed using a portion of this allocation for liquidity 4 on Arbitrum. We would like to propose to the community to create an ARB/AURA/BAL pool. The exact weights of the pool will be determined by the community.
Should Aura launch on other chains, it may bring substantial growth to Balancer on Arbitrum and other major Ethereum scaling solutions. Specifically on Arbitrum, Aura contributors have identified substantial interest from protocols interested in seeding liquidity, furthering the growth of liquidity that is already there, and building on top of Aura/Balancer infrastructure. To amplify the rate of growth, Aura could apply for Grant and or Ecosystem funding from networks, to then be leveraged to co-incentivize market participants.
Upon community approval, Balancer DAO and Aura DAO will deposit liquidity into a contract that will hold the liquidity pool. The creation of this pool will unlock the ability for Arbitrum users to trade AURA on Arbitrum and increase protocol integration potential.
This proposal is an extenuating discussion and has been adjusted to address feedback. Proposal link: [RFC] Create ARB/AURA/BAL Liquidity on Arbitrum
Specification
An escrow contract will be created that allows the BPT position to be managed jointly by both Balancer DAO and Aura DAO. The operation and implementation of this escrow will be similar to the veBal grant escrow that was deployed for the timeless grant. This escrow will have the following functionality:
- Ability to create a BPT position in a 33:33:33 weighting ARB:BAL:AURA pool;
- Ability to increase the BPT size by either party;
- Ability to unwind the BPT position back into the constituent tokens;
- Dynamic swap fee, initially set at 0.25%, and controlled by the multisig for potential future adjustment; and
- Ability to send ARB and BAL back to Balancer and AURA back to Aura. AURA liquidity will be provided by Aura Finance, and BAL and ARB liquidity by Balancer.
AURA liquidity and interaction with the LP contract will reside with the Aura Finance Treasury multisig.
Upon community approval, either party can request to deprecate their respective portion of the LP. Following the request, the multisig from either party would execute the contract function to remove their respective share of liquidity. A window of 60 days will begin upon execution which allows for the party to remove liquidity. Failure to execute within the 60-day window will result in the necessity to re-execute the contract for the ability to remove the liquidity.
This proposal seeks approval on the creation of a AURA/BAL/ARB pool on Arbitrum with up to 1.5m in AURA should Aura be launched cross chain, and provided a positive BIP.
A separate proposal will be posted to ask the community for approval for the execution of bridging and depositing the AURA.
Voting
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 approving the Aura Treasury to provide up to 1.5M AURA for liquidity on to an ARB/BAL/AURA pool held as POL by a shared escrow with Balancer, following any potential Arbitrum launch.