I like it. It will be beneficial to have governance influence in Balancer, as the majority of our liquidity is there.
TAP-17 Aura Acquisition
I think this is very good for our liquidity. Lets go forward.
Soo ugh… we gonna coincentize temple/ohm liquidity ?
JK idk if that make sense as a rail or not but they do have a heft chunk of temple/bb-usd or w/e
Totally for this move
bls fix the snapshot strategy to include OHM bonds before this goes to snapshot … and SEND IT!
- Edited
Don't understand this proposal tbh. Aura is definitely the worst way to accumulate governance power over Balancer. Ok, the $/vote today is competitive, but you need to take into account Aura's inflation.
As you can see on this query, AURA is emitting around 200k new tokens every week (more than 1% of its circ. supply issued every week). As it's not really locking any new BAL LP tokens since the airdrop is over (due to more competitive locking solutions such as tetubal or sdBAL), the backing per AURA keeps decreasing. The backing per token went from 0.26 BAL/ETH LP per vlAURA in end of October, to 0.23 in end of December, losing 12% in 2 months, and this is not due to a bigger share of locked AURA. With this structurally decreasing backing, its price can only go one direction: down. It's price lost 34% against USD over the past 30 days, and 33% against ETH.
If you look at the price per vote after dilution, you'll see that it is much more interesting to use any other solution (lock directly BAL/ETH LP or use sdBAL, as currently you cannot vote as you like with tetuBAL):
Investing in Aura today sounds very much like when we invested in CVX at $30+. Today CVX is sound because its inflation is nearly over. Let's not do the same mistake with Aura, it will just harm the treasury…
We should either lock directly into veBAL, or if we don't want to permanently relock to keep the 1 veBAL / locked BAL LP ratio, we should use sdBAL which is liquid and manages the maintenance of the 1 veBAL / locked BAL LP ratio.
Really hope we will not dive into this non-sense without doing our homeworks…
Hey Wartull and everyone else
Long time OHMIE first time poster. I like the essence of this proposal but reading @LeTube comment above got me thinking and he does have a point …
In OIP-110 it was made clear that "Treasury wants to maximize veBAL controlled/ $ spent". A few months ago it probably was Aura but these days it definitely isnt, some napkin math makes it clear.
With security definitely not an issue for the alternatives (almost exact same arch) with other solutions actually being more transparent than Aura why are we taking a worse decision with treasury funds for our strategic Balancer investment???
Do the ohmies get some kind of airdrop from aura ? idk man seems sus.
As a side note - I always see other DAOs posting request for proposals from the ecosystem inviting the best to present their case for being selected, so professional! We never or rarely do that … I just dont understand why.
If we're to be taken seriously and not just considered a meme I think we could do more research and analytics work in public requesting RFPs (not backdoor deals) and generally collaborating as other blue chip DAO's do (Yearn, Synthetix, Maker DAO, Lido etc etc.) we're just as big if not bigger - we can do it!
With all that in mind I DONT support and will be voting against on snapshot for the simple reason that more research is needed. Were definitely not picking the option to "maximize veBAL controlled/ $ spent"!
full sentence linked below for reference:
"Governance power in the balancer ecosystem can be acquired through multiple different tokens, however Policy proposes to only focus on $BAL and $AURA as means of governance acquisition. Given that Treasury wants to maximize veBAL controlled/ $ spent, it should be agnostic and acquire the most efficient token."
OPSENSE AURA is a strategic asset because it allows the DAO to incentivize 3rd party liquidity, akin to what we're doing with FXS and CVX right now. To name a few poor strategic asset examples, SNX and YFI serve no purpose for OlympusDAO and would essentially only serve as a speculative gamble of the treasury. Additionally, OlympusDAO is going to put the majority of it's liquidity within Balancer. It would behoove the DAO to be able to have influence within the ecosystem that it will call home in the near-term. For data on why this makes sense per the comment on governance influence please see this dune: https://dune.com/aura_finance/aura
I am unsure what your napkin math entails. Based on the data that is tracked in that dune it still is a straight forward proposition in my mind. Furthermore, it would have been great to see your feedback during the last votes that greenlighted AURA as a strategic asset, doing a pilot deposit into the Aura platform, and Treasury Framework proposal that was based on the OlympusDAO Strategy proposal. Links below:
https://forum.olympusdao.finance/d/1344-oip-118-the-olympus-2022-strategy
https://forum.olympusdao.finance/d/1324-tap-15-pilot-bribes-budget/16
https://forum.olympusdao.finance/d/1323-tap-14-pilot-deposit-into-aura-finance/7
As for transparency, could you please expand on this? Aura is a group of contributors that are well known within the broader ecosystem and have made every effort to be transparent, decentralized, and solid partners.
0.23 veBAL locked per vlAURA
$1.55 price of one vlAURA
$3.17 value of veBAL per one vlAURA
Moreover, AURA is the single largest holder of veBAL voting weight and given the recent peace treaty Aura will massively increase their share. StakeDAO doesn't come close to voting share. Additionally, Olympus would be required to acquire SDT to maximize StakeDAOs impact and it would be one of very few that have exposure to that platform. More DAOs are choosing Aura for their treasuries which is even more reason to choose the platform.
Also important to keep in mind that Olympus would accrue more AURA through its POL on Balancer. This is important because as Olympus' pools accumulate fees through volume and Olympus will earn revenue on that. Also, with the accepted bribe proposal Olympus will receive 2x efficiency in emissions from the amount put toward its POL. Currently, there is no greater secondary voting market in all of DeFi on any chain or protocol.
The share depreciation your showing is based on the governance tensions which have been solved with the peace treaty. See here: https://forum.balancer.fi/t/bip-128-peace-treaty/4128
As for price, this makes AURA even more enticing given that its underlying value is ~2x what it is currently.
Happy New Year, brother! A few corrections need to be made to your calculations:
First, you are assuming that 100% of the 100M max total supply of Aura will be vote locked. AURA's circulating supply will only be 45M or so after 2 years, therefore halving the diluted vote price per token of value.
Second, only roughly 67% of Aura gets vote locked therefore multiply by 0.67.
Third, you are suggesting that Aura never locks another veBAL in the next two years, which is simply unrealistic. Aura continues to lock more veBAL at the rate of 20k a week and this demand would only strengthen in more favorable market conditions.
Finally, you do not place a premium on the semi-locked nature of vlAURA vs the more permanent nature of veBAL and sdBAL, which is a significant factor to consider for DAOs that may need more flexibility in treasury management.
Json provides a link to a Dune dashboard with more accurate figures, above, if you need assistance w/ your calculations.
Hi everyone! I wanted to post my own comment as I find this quite favorable for both parties!
I'm excited to see the proposal to acquire AURA tokens moving forward. As outlined, there are several strategic reasons for this acquisition, and I believe it has the potential to bring significant benefits to OlympusDAO. The ability to drive third-party liquidity to Olympus pools and incentivize new liquidity products and partnerships is particularly appealing. I also appreciate that the acquisition will be funded responsibly, using Convex ecosystem rewards and relocking the remaining CVX position.
Overall, I think this is a smart move (considering everything that happened last year) that will help to solidify Olympus DAO's position in the Balancer ecosystem and beyond. I'm definitely supportive of this proposal.
I really think this is the right step to take considering the cost of $AURA at the moment and the potential benefits this strategic move will bring as regards governance in the balancer ecosystem. Driving third party liquidity to Olympus with the current market condition is a thoughtful move, more so strengthening and boosting POL is even better for the DAO's treasury and I see Aura's protocol design doing just that. I think the best way to see what the possible outcome of this strategic move will be is going through this Dune dashboard (https://dune.com/aura_finance/aura). This is brilliant and I am in support of this proposal.
I'm glad I see some meaningful discussion! After I've read all the comments and resources I think it makes total sense to go with vlAURA option instead of anything else if we have our liquidity on balancer. LFG
I think @LeTube brings good points to the discussion in essence, I am not sure I would agree with his conclusions. IMO the analysis at this moment is whether Aura provides Olympus Treasury the most governance power per $ invested over the lock duration (16 weeks). Analyzing diluted voting power over a multi-year timeframe isn't really relevant for a 4-month lockup.
However, I do agree that if at some point in the future, AURA does not offer the best ratio of Emissions controlled/ $, then it would totally make sense for Olympus Treasury to swap out of its position. Before the end of each lock up period, the position should be reassessed and either relocked or sold for veBAL/other tokens.
Hey Franklin, you raise good points, but maybe I was unclear. Am not saying tomorrow circ. supply of Aura will be 100m. I am saying it is currently in an extreme inflationary phase, issuing 1% of circ supply every week, and therefore if we just think 16 weeks ahead, we forget the fact that we could lose c.16% of our principal investment in this period (assuming flat market cap, which is already bullish since last 30 days price action shows all inflation gets dumped, leading to a 34% decrease in just one month).
Whereas with veBAL or sdBAL, ok, you might have a more expensive price per vote now, but at least in 16 weeks, you didn't lose 16% of your investment (or more).
I think one should view Aura investment just like bribes: you get a better price per vote, but it's an expense, not really an investment, due to the extreme inflationary nature.
This should also answer @balotelli45 's question.
However, I understand that some members of the Olympus team are also members of the Aura team, so I guess it's kinda pointless to argue…
LeTube It is not pointless to argue at all, I definitely appreciate a different perspective and this is the point of having the proposal on the forum vs just on Snapshot. If you are alluding to json in your comment, he is neither a Policy nor Treasury member (nor a contributor in the DAO anymore).
As for your point about dilution, which is of course an important consideration, given the emissions schedule, would Aura still be the best option over the course of the lockup or would that change? If the answer is it would, then we can re-evaluate after every lookup, right?
Using a limited data set (prior 30 days) to project future price is flawed in methodology, both in relation to Aura, which is a yield-bearing asset, and for coins in general. Past performance is no indication of future results--we're not rediscovering an age-old maxim here. Macro factors and crypto-specific fundamental events, like the FTX collapse, are much more likely to be market movers. History suggests that Aura will simply perform in line w/ the market and the remainder of Olympus's portfolio assets going forward. Your investment strategy seems to be a variation on "buying the dip" or "buying distress" which is another common investing fallacy, and especially dangerous in crypto.
However, I would contend that Olympus is not in the trading business at all, so an obsessive focus on price isn't quite necessary. As stated by Wartull, the purpose of this acquisition is to a) drive third party liquidity to Olympus pools, b) incentivize new Olympus liquidity products and partnerships, c) vote for protocol-owned pools and farm rewards, and d) gain governance influence over the Balancer ecosystem. The value of these 4 criteria are not as easily quantified, but of available offerings, Aura remains the only sound choice for DAO accumulation that meets these standards.
Regarding Balotelli's comment, Olympus has an open and transparent treasury and puts together excellent reports on its holdings.
https://app.olympusdao.finance/?_gl=1*1ttujlq*_ga*NDczNzU0MTY1LjE2NzMwMDQ2MTA.*_ga_QV7HNEEHV9*MTY3MzAwNzQ5NS4yLjAuMTY3MzAwNzQ5NS4wLjAuMA..#/dashboard
https://www.olympusdao.finance/transparency?_gl=1*3quctd*_ga*NDczNzU0MTY1LjE2NzMwMDQ2MTA.*_ga_QV7HNEEHV9*MTY3MzAwNDYxMC4xLjEuMTY3MzAwNDYxNi4wLjAuMA..
Thanks for your answer Shadow.
So what am trying to say, and sorry for not doing a good job at it, is that of course, $/vote is important, but you cannot see only that. If you just want to minimise your vote price, you can just bribe veBAL or vlAURA users. But the reason Olympus is considering acquiring AURA is to not have an expense, but more an investment, i.e. to make sure the treasury is not impacted by the governance activity of Olympus. I think it's very good to do so: I would prefer investing over expensing for sure, especially given this kind of returns/price.
However, what I am saying is that for such investment, Aura is not the best tool due to its inflationary nature, as indeed, you will have many votes, but your investment will progressively decrease in value.
Here is a napkin calculation of what I am trying to say:
https://docs.google.com/spreadsheets/u/1/d/e/2PACX-1vTRh_Osb7qDXSN_lUZf-QAoAjPjvrEz7YyQzEWwMAOZHWzxM7KAo7OWGz8jKiC43QJpRC1jKh0gDqxu/pubhtml
Basically, on the first 16-week round, Olympus will lose from dilution around $150k on its principal investment. This will allow Olympus to get 142k veBAL votes for 16 weeks. If Olympus was willing to buy those 142k votes for 16 weeks through bribing, it would cost, at the current price of bribes ($0.05/vote.week) $113k, thus saving $37k (plus being flexible).
Therefore, if we are willing to use those $1m as a pocket of money to buy votes, we would be better of doing it via bribes. However, if we want to use those $1m as an investment pocket, we would be better off doing it through veBAL or sdBAL: we would have less voting power in the short term, but the position would be sustainable as it would not structurally decrease at this pace.
Hope you guys see what I am saying…