[AIP-71] Proposal for Long-Term Funding of the Aura Ecosystem

Proposals
1

Author

Fry, Contributor

Summary

The Aura Ecosystem Fund (AEF) was last funded on July 18th, receiving 500,000 AURA and 244,000 USDC. As of now, the AEF holds 458,280 AURA and 94,810 USDC, with an estimated burn rate of approximately 35,000 USDC/month.

The operational landscape for the AEF has not changed since the previous funding request. For more details about the scope of AEF activities—including grants, security, and contributor stipends—please refer to the previous proposal dated July 18th.

To secure the ecosystem’s long-term funding and mitigate sell pressure on AURA, this proposal suggests creating a 1,000,000 AURA lock, which would generate sustainable yield. Locked AURA currently earns an 89% annual return, equating to about 320,000 USDC per year.

Locking 1,000,000 AURA would minimally dilute existing lockers by approximately 2.63%, reducing a 1% position to 0.97%. Farming voting incentives through a vlAURA position is a more ecosystem-friendly alternative to selling AURA, avoiding adverse price impacts and benefiting all stakeholders.

Specification

This proposal requests 541,720 AURA from the treasury to create a 1,000,000 vlAURA position, achieving:

  • A long-term funding plan for the ecosystem.
  • Reduced sell pressure on AURA by replacing sales with yield from locked positions.

Voting

This forum post will remain open for three days before the Snapshot proposal goes live. Open discussion is encouraged.

This vote will be a single-choice vote. You may vote “For” or “Against” this proposal, or choose to abstain. By voting “For,” you support granting AURA in accordance with this proposal’s specifications.

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Given Aura doesn’t have any source of stable coin income, this is a viable option and I am in support of this proposal.

The last voting incentive round was quite exceptional and out of the norm because of high volatility from gov-token trading like GNO and COW. I would argue the income will be lower and hover around 60-70% APR if Balancer v3 and the new fee model become a success.

Just for clarification: how will you vote with your vlAURA position? Will you delegate to HH or Paladin?

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Thank you for the support, Xeonus, and for bringing up these important considerations regarding APR. I feel that even at 60/70% I think this proposal still brings more sustainable funding for the AEF.

Regarding voting delegation, we intend to evaluate the strategic alignment of both HH and Paladin with the Aura Ecosystem Fund’s goals. Whichever aligns best with our long-term vision will be the preferred choice and this can be subject to change at the discretion of the AEF.

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I support his proposal. It introduces a revenue source for the AEF and it reduces the selling pressure. It also has the benefit of making the AEF more aligned with the vlAURA holders, as the incentives are now part of its funding source.

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5

Very supportive of keeping the AEF funded. The team has been extremely helpful in our launch, and keeping an open line of communication with us at all hours. DeFi never sleeps.

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6

I believe there should be some sort of milestone for the team to hit. Annual business plan with quarterly deliverables. This seems to just be a carte blanche for complacency. I’m sure a lot going on behind the scenes but from the outside looking in that doesn’t seem to be a lot of initiatives or motivation

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https://vote.aura.finance/#/proposal/0xe1fafc185d73f104fbb78e777c8838cc47604838c7adae6de5462b5938538f52

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Thanks for pulling this proposal together and posting for discussion.

  1. Will these 1M vlAURA be used for governance voting or not?
    Delegated to an existing delegate?
    Delegated to a new delegate?

  2. I have an idea that will help AURA obtain the 541,720 AURA proposed with minimal impact to the treasury:
    AIP-65 in Feb, 2024 gave $200K USDC funding to HYPER with the stipulation that, “the loan will be repaid upon launch of the Hyperlock protocol or as soon as is feasible.” I don’t believe that this $200K USDC has been repaid yet, but that would nearly cover 541,720 AURA required to reach the proposed 1M lock.

Finally, I know that Aura wishes to encourage open discussion and it’s written that, “This forum post will remain open for three days before the Snapshot proposal goes live.”

However, I feel that seeing the proposal AIP-71 already posted in snapshot (scheduled to go live in x hours) is poor and actually discourages open discussion from the community here in the forum.

Please reconsider posting a scheduled snapshot vote before the open discussion period has concluded.

Thanks everyone!

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I would rather see the sale of AURA than dilute lockers. I agree a longer term fund for this group is worthwhile and I think we should explore other options for what to do with the sale (rather than paying it out directly).

A decrease in AURA price would be largely due to liquidity rather than fundamentals of the BAL/AURA relationship. As such, I would expect the a recovery. It does also have an impact on incentives, but only through the incentives put out in AURA.

I also agree for more transparency/plans. I’m fine with well timed reactionary actions but to know what the goals in mind are would be useful.

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Thanks for the feedback, everyone! To address the points raised:

  • The goal of this lock is to provide a stable, long-term income stream for the AEF without selling AURA, keeping alignment with the DAO. Selling AURA would offer a short-term fix but harm pricing and conflict with our DAO-aligned principles. This lock will only be used for gauge votes, not general proposals.

  • Income Cap: Another concern that was brought up was that if the price of BAL and AURA increases in the coming months then the income may be in excess of what is required. We will cap income at $40K/month. Any surplus will be returned to the Aura Treasury.

  • Transparency: We’ll establish a framework for regular reporting on AEF expenses to enhance transparency. The original funding proposal (AIP-69) still provides a high-level overview of AEF operations.

  • Snapshot Timing: That delay was on me—I took an extra day to finalize the proposal. Moving forward, we’ll adhere strictly to the 3-day discussion period before posting Snapshots.

Thanks again for the input and helping us refine this proposal!

3 Likes