TAP-19 Deposit OHM-ETH & OHM-DAI POL into Aura Finance

abipup

Summary

This proposal seeks authority to deposit up to 100% of Protocol owned OHM-DAI and OHM-ETH BP tokens (currently worth about $66m) into Aura Protocol, which currently sits at over $380m TVL.

Motivation

Olympus DAO recently passed a proposal (TAP-17 https://snapshot.org/#/olympusdao.eth/proposal/0x5b06e73b9744a5f224d5ec0ac0e4b3411fdcb5eaa19040b4091a91bbc6c6d504) to acquire AURA for strategic purposes. One of the goals of that proposal was to farm rewards from the Protocol Owned Liquidity present on the Balancer protocol.

Olympus DAO has previously asked permission to pilot deposit POL into the Aura Protocol (see here: https://forum.olympusdao.finance/d/1323-tap-14-pilot-deposit-into-aura-finance/6) and the thesis on Aura has not changed since then. Aura contracts have remained solid (which makes sense since they’re a fork of Convex contracts: https://github.com/aurafinance/convex-platform). Aura Finance has proven to be a driving factor in the overall Balancer ecosystem and it makes sense for Olympus to take part in it.

Risk Assessment

Using a risk analysis framework developed by the DAO, the Policy team have attempted to score various protocols based on some subjective and non-subjective data.

Link to Risk assessment:

https://docs.google.com/spreadsheets/d/1NivudWfWvrkKTdgX_Z2tgfrP6mH761C3O8vqkO4Zn14/edit?usp=sharing

Implementation

Implementation is simple and involves staking the two BPT’s in their respective Aura positions. Periodic gauge votes take place in the exact same way that our Convex gauge votes take place.

thomasscovell

Thanks team. It's 50% max for me. Can I ask what has increased our confidence in Aura since August '22? At that time we were suggesting a pilot deposit of $3M, and now we're going for$ 33/66M. (Other than 6-months of not being hacked passing)

Relwyn

thomasscovell

As the TAP says there isn't really an increase in confidence, the confidence is the same as it was when we did the pilot program so we are equally confident as we were at that time. The AURA Contracts are essentially Convex forks and the Convex Contracts have remained unhacked (Knock on wood). That said, the TAP is structured to gauge appetite for risk so the Risk Assessment is provided and we'll see where people land on acquiring governance in our ecosystem of choice.

thomasscovell

Relwyn Yes, hence why my question is - if we are equally confident but would only risk $3M at the time, why$ 33M/66M now? That's quite the leap. I'm fine if "6 months of robust usage with no problems" is the answer - but "no increase in confidence" is illogical-ish. Now…back to watching the bond clock.

Relwyn

thomasscovell

Oh, I see what your asking now. We're pot committed to Balancer now where it is holding the full might of our POL. The $1M in AURA TAP passed and we have opened a sizeable position which we will now add too. Locking the POL in AURA and then voting our pools with it is the next logical step if we're going to fully capitalize.

$3M in AURA with some of the POL was testing but this is about powering the liquidity pools we've created and by how much. I think your mid range 50% is wise. I voted the same and then we can hedge in more as needed.

streetjesus

Leaning towards 50% since it is never a good idea to put all of your eggs in one basket, but interested in hearing reasons why depositing 100% of POL makes more sense.

cstampar

50% seems like the more reasonable and conservative approach to take, thanks for the work

abipup

Hi all, the reason for the $3m deposit at the beginning was mainly due to the (then) young age of the Aura protocol. Protocols tend to change very quickly when young so the risk is outsized at that point.

Now that Aura is well established and proven to be a solid and reliable protocol, paired with the fact that the contracts are a direct fork of the convex contracts, the Policy team is comfortable depositing 100% of POL (like was done with the Sushi POL) into Aura.

abipup

The poll is over and we will move to snapshot soonTM! Thanks all for the input.