[AIP-72] Part 1: AURA Buy Backs

Proposals
1

Authors

Fry, Maha

Part 1

This proposal aims to deploy $1M from the Aura treasury, split between USDC and WETH, to buy back AURA and lock it, reducing circulating supply, generating proceeds through 80% APRs and strategic voting, maximizing the benefits of this bull market.

The DeFi mid-cap market, including Aura, has experienced suboptimal price action despite the apparent onset of a bull market. With all-time highs emerging, CRV up 4x, CVX trading towards $7, and BAL up 50% over the past 30 days, now is a critical moment for strategic action.

With Balancer V3 coming up and promising to take over the DEX market share, with growing interest from partners, particularly in voting markets. The Aura DAO cannot afford to sit idle—decisive moves are needed to capitalize on this momentum.

There is also a need for Aura to create a secondary market in a tighter range to facilitate arbitrage. To achieve this, we will create and manage a AURA:WETH liquidity position on Uniswap.

Buyback Details

This proposal seeks to utilize $1M from the Aura treasury, split between 634k USDC and $366k in WETH (adjustable based on ETH price), to buy back AURA via CowSwap. Limit orders will be placed at $0.45–$0.50, enabling the acquisition of approximately 2M AURA at current market conditions. Purchased AURA will be locked weekly, reducing the circulating supply. While this strategy will result in a potential ~4% dilution of current vlAURA holders, the recent price increases of BAL and AURA present an opportunity to grow voting rounds, mitigating dilution effects. Rewards from the vote markets will be split between aUSDC and aWETH on Aave, highlighting the cornerstone partnership with Aave, which has been a valuable ally to both Aura and Balancer.

  • Use $1M: 634k USDC + $366k WETH.
  • Place CowSwap limit orders at $0.45–$0.5 for 4 weeks.
  • Acquire ~2M AURA to reduce circulating supply.
  • Lock AURA purchased weekly on Wednesdays.
  • Delegate and earn proceeds.

The treasury lock will only be used for gauge voting. The lock will be delegated between Hidden Hand, Paladin, and an Aura strategic voting partner, based on the objectives for that specific period. Once the lock expires after 16 weeks it will be relocked.

Liquidity Provision Details

At present, $1.3M is allocated to the AURA:WETH 80/20 pool; however, most trading activity and liquidity for AURA occur within the incentivized 50/50 pool on Balancer. The 80/20 pool generates only ~$10k in daily volume, whereas the 50/50 pool facilitates ~$65k daily volume.

To optimize liquidity utilisation and enhance user access, we propose transferring 50% of the liquidity from the 80/20 pool to a position on Uniswap. This reallocation will align with the goal of reaching a new retail focused audience. Over the following 4 weeks we will monitor how effective this liquidity position is in introducing new volume. If the volume is not at least 2x the 80/20 pool we will remove the liquidity and re-evaluate where it can be best provisioned.

Technical Implementation

  • Use USDC and WETH from the treasury to set up partially fillable limit orders at $0.45, with flexibility to move up to $0.5 as needed.
  • Lock all AURA purchased weekly, every Wednesday.
  • Remove 50% of the liquidity from the 80/20 pool.
  • Set up and manage Uniswap V3 positions for AURA:WETH.
    • Positions and ranges will be at the discretion of the treasury managers and in response to market movements.

Voting

This forum post will remain open for discussion for three days before moving to Snapshot.

This vote will be a yes or no vote:

  • Yes: Approve the proposed buyback and locking plan.
  • No: Reject the proposal.
2 Likes
2

My two cents; strategic buy-backs seem smart especially now that [AIP-71] is here making a large treasury less of a priority.

However, timing the market is always risky :slight_smile: This proposal commits roughly 40% of the liquid tokens in the treasury (counting Aave, WETH, USDC) while the market impact is unpredictable especially since AIP-71 will also affect the sell pressure. How about committing to this in ~10% or $250k chunks and adjusting accordingly to the effect experienced?

Also; why limit orders, these will only give a floor or ceiling. Wouldn’t market orders be preferrable?

3

Two thoughts:

  1. Why not just make it a set amount of $'s deployed per week agnostic of price range. With a range you will create some arbitrage and market engineering during the purchase period
  2. Let’s distribute 50% of the rewards from the locked aura back to non dao lockers. While we have struggled to accomplish the multiple franchise vision this could be a way to motivate people to buy and lock and not further dilute current lockers
4

Thanks for pulling together this proposal! It’s wonderful to see more members of the community comfortably participating in discussions and authors of the proposals offering additional insight and food for thought when responding.

The proposal opens with a celebration of Balancer V3 coming and the growing interest of partners, especially in voting markets.

What has proven to be foundational for Aura has been the core pools and their flywheel effect. I’m interested in better understanding how this proposal aligns with maintaining (or, better yet, growing) the impact of core pools and bribes they receive.

Is this generating liquidity for the Aura ecosystem?

I read that liquidity is to be transferred OUT of the Balancer-Aura ecosystem… for a pool on Uniswap?

I’d love to see an increase of 2M vlAURA slurping bribes be used to bolster the Balancer V3 launch, deepen core pool and ecosystem liquidity, and reinforce what has been Aura’s bread and butter for the past several years.

Thanks for reading and, as always, I appreciate the opportunity to be a part of these discussions.

1 Like
5

Great proposal! I think in any strategy like the one proposed, there are probably endless scenarios for customization, most of which come down to personal preference, but none of which can be definitely stated to be superior to another. I think what’s most important here is to recognize the spirit in which this proposal was crafted, which is that the Aura DAO is now taking decisive action to embrace bullish market sentiment, as well as position itself as a veteran player in any upcoming crypto regime. Strongly support.

1 Like
7

This is a bullish proposal for the following reasons: Aura DAO signals it’s long term alignment/belief in vlAURA; takes roughly 2% of the total supply out of circulation forever; and positions itself to be cash flow positive and thus avoiding AURA sell pressure in the future for funding. This is equivalent to an external DAO making such a commitment in terms of the impact on the liquidity/vlAURA, except that these tokens are effectively out of circulation now.

Doing as a limit order now while the market value of Aura is under book value in this climate makes sense. The concern about using such a % of the liquid treasury is fair although with belief in Balancer and vlAURA over the next 18 months it is a net gain.

1 Like
8

Hello!

I see good points here:

  • I believe this is a good use of the liquidity sitting idle in the 80/20 pool, putting it on a more active range/pool.
  • Buy back & lock increases the alignment between the protocol and users (with the AURA locking), making it more committed with the long term success. It also creates a revenue source different of “selling the tokens within the treasury”.

Overall supportive in this.

1 Like
9

Great discussion both here and on Discord—it’s been fantastic to hear and understand everyone’s feedback on this proposal.

One of the main concerns raised was the potential impact of moving Protocol-Owned Liquidity (POL) away from Balancer. To address this, we will implement strict KPIs to measure the performance of the Uniswap position. These KPIs will help us ensure that the shift is bringing tangible value.

Specifically, we’ll review the position in 4 weeks, and if it hasn’t delivered at least 2x the volume compared to the Balancer position, we’ll make adjustments accordingly. This approach allows us to experiment while maintaining accountability and responsiveness to community concerns.

2 Likes
10

Very exciting to see such strong engagement from both communities! The passionate involvement from AURA and Balancer members truly demonstrates the flourishing ecosystems we’ve built together and our shared commitment to success.

The proposal to align protocol success with a locked position is strategically the only viable option as of now, especially considering the current treasury funds. This approach will not only effectively reduce AURA circulation but create a powerful dual benefit: sustainable operational funding alongside the ability to forge strategic partnerships.

I agree with others though that the execution of those buy backs should be carried out carefully to not get front-run so that people load up and “sell the news”.

From our direct experience at Balancer, I can confidently say that utilizing locked positions has been an essential tool for bootstrapping partner liquidity. This proven model could be even more impactful for AURA help with Balancer v3 adoption.

Regarding POL diversification: after thinking on it, it makes sense to distribute AURA liquidity across multiple protocols. While CowAMMs pools present an interesting opportunity, the multi-chain nature of AURA opens up other possibilities worth exploring. I particularly appreciate the commitment to performance measurement - this data-driven approach will be crucial for optimizing treasury POL.

I strongly support this proposal, mostly because it will streamline DAO operations funding in a way that benefits all stakeholders. Onwards!

3 Likes
11

Looks like this is gearing up for a vote. I also have appreciated the thought-provoking discussion.

This answers one of my questions… what might happen should the AIP pass in 16 weeks when the locks begin to expire.

If the intent is to relock, I’d like the proposal to express that.

Also, prior to going up for vote, I’d like to see the proposal revised to reflect Fry’s Discord comment, “Agree that this treasury lock will not be delegated for voting power to the council.”

That change from what was originally proposed here came in response to community feedback and will be healthy for voters to see included in what’s officially up for vote.

Thank you!

2 Likes
12

Yup, agree. I will get it updated on both those points before it goes to vote.

  • Once the lock expires it will be relocked
  • The lock will not be delegated to the council
3 Likes
13

https://vote.aura.finance/#/proposal/0x75c8a57859f0e786fb5ec33392cd8db2b772aaff290f57155e4f3145222d8925