graviAURA Regulation: First Steps

The following post is an exact retelling of a council approved proposal focused on graviAURA regulations.

Dearest Council,

The dust has settled on most of the balancer voting, and per my request our gauges still have 2 more days to go.  Now that we have seen where things landed, we can take a moment to think a little deeper into what everything means.

Primer:

• auraBAL: 80%/20% - BAL/ETH locked in Aura (irreversible)
• graviAURA: Badger Locked AURA
• graviaAURA Balancer Pool: 33% / 33% / 33% - graviAURA / wETH / auraBal

Current State:

• There is a ton of auraBAL sitting in a stableswap (auraBAL / B-80BAL-20WETH) that is hard to trade due to complex routing through nested pools on Balancer.  There has been ver limited  trading in this pool as of this writing
• The only functioning pool offering single transaction auraBAL swaps for any token is the $17k USD seed liquidity in our graviAURA pool
• Users are depositing into auraBAL instead of arbing the pool back to peg even though there is reasonable liquidity, demonstrating that most are not figuring out how to trade auraBAL
• graviAURA is a powerful tool, and it needs some regulation.  Especially in a nascent ecosystem like AURA.  At the same time, we are eager to start testing and learning with it and there is a real need in the ecosystem that can be resolved by a currently running governance request

Summary:

• Our goal is to gain the respect of that community by demonstrating our partnership healthy growth of their ecosystem.
• Getting the auraBAL gauge up will solve a real problem that is limiting the growth of AURA.
• The auraBAL pool will allow arb of the stableswap pool and will provide a quick solution to good UX, while still taking advantage of deep auraBAL stableswap liquidity.
• Recent modeling shows auraBAL will yield more than 150%.
• The Balancer community understands that this would create outsized influence and limit competition.
• The last few months have shown that ve tokenomics+ free market bribes when left unchecked can create bubbles.
• Along with Solarcurve’s plan to feed USD into the bribe environment and encourage voting on pools that benefit the ecosystem, we believe this is a powerful tool that can be used to build and maintain a sustainable economy.

Proposal:

I hereby request that the council limit the the auraBAL/ETH/graviAURA pool voting as follows:

Rounds 1, 2, 3:

• ⅔ of the graviAURA in the pool will vote for itself and Badger will collect 10% fees

• The remaining votes (~ ⅓ ) will be split as follows, with no fees as altruistic voting

  • 50% to the stETH/ETH pool
  • 50% to the Aave USD 3pool

During the first round attention will flow to this pool because of the good yields. In rounds 2 and 3 other pool depositors will also begin to vote for this pool and it will find its natural yield.

Subsequent Rounds:

• We will target a return that is 20% APR higher than the yield of the highest auraBAL pool is yielding at the start of each voting round.  Note that target yield will be based on emissions generated by self voting, so external voting by depositors may push yields above the natural target.

End Game:

Building a regulatory framework around graviAURA and setting the parameters of that regulation are something that is best handled by shared governance between Balancer, Aura and Badger. Hopefully this joint governance will be established to manage emissions going forward.

With this approved by the council, I can approach some members of the AURA and Balancer teams and see if perhaps we can find a way to get graviAURA and auraBAL trading, and give Badger a chance to start working with our new tech.

Note that Badger will be launching an Aave USD Helper vault (details soon) so users will directly benefit from alutiristic voting.

Do you approve?

https://discord.com/channels/743271185751474307/842854176488161311/993524489755312280 [BadgerDAO discord]