Ashutosh

0xFelix · Jul 7, 2022

Authors: 0xFelix (Olympus), 0xLamentations (Aura)

Summary

Over the past months the Aura and OlympusDAO teams have been exploring mutually beneficial ways to grow both protocols. Both parties want to formally commit to co-developing and working closely together in the future. This OIP is the first formalization of that partnership. It aims to do multiple things: 1) Conduct a DAO-to-DAO treasury swap, 2) Whitelist Aura as an Olympus Flex partner, and 3) Start assessment to use Aura for Olympus’s treasury deployments.

Background

Olympus has made initial forays into the Balancer ecosystem with the creation of an OHM-DAI-ETH pool, an LBP funding budget for OHM raises, and seeding liquidity for partner protocols. More recently, we have made a proposal to move the majority of OHM liquidity to Balancer and to start using Balancer as Olympus’ main liquidity hub. In the future, we could also start whitelisting certain Balancer pools for the “mint and sync” functionality, effectively removing the opportunity cost of providing OHM liquidity. This will open up the possibility for the creation of more arbitrary OHM pairs in the Balancer ecosystem.

Aura Finance is a recently launched metagovernance protocol that allows veBAL stakers and Balancer liquidity providers to boost their yield and governance power in this ecosystem. In essence, Aura is to Balancer what Convex is to Curve and since the launch just a few weeks ago the protocol has already acquired >25% of all veBAL voting power.

In this context, the Aura and Olympus teams have been in contact to explore ways of co-developing in the future and have concluded that there are significant partnership and growth opportunities. This is why both parties want to take a first step to formalize this partnership through:

Conducting a $100,000 treasury swap in order to align incentives and to provide both parties with governance power in each other’s protocols.
Whitelisting Aura for Olympus Flex Loans.
Olympus to start internal assessment to whitelist Aura for treasury deployments.

Olympus Flex Loans

Olympus Flex Loans, sometimes known as incurDebt(), is the new (whitelisted) product offering for partner protocols that allows for liquidation-free borrowing of OHM against gOHM collateral. Done through a specific smart contract, the borrowed OHM is then paired with another token (e.g. AURA), and supplied to an AMM to create an LP token that is owned by the borrower.

This, in effect, gives the partner protocol the opportunity to unlock substantial value from their gOHM treasury holdings through dilution-resistant liquidity creation. At the same time, the partner protocol still has the benefits of treasury diversification, maintaining the upside of the growth of gOHM and the Olympus network, and their governance rights within this system.

With this proposal we want to whitelist Aura for future usage of Flex Loans. Note that the Aura core team currently has no immediate plans to use this debt facility but can draw on it in the future, pending future governance discussions and the approval of the Aura community.

Partnership proposal & terms

Treasury swap:

Conduct a $100,000 DAO-to-DAO gOHM to AURA swap at a historical 14 day TWAP from the passing of this proposal by governance.
Aura to use the acquired gOHM for treasury diversification, with the option of using Olympus Flex in order to bootstrap an AURA/OHM Balancer pool.
OlympusDAO to lock the acquired AURA into vlAURA to support Balancer/Aura ecosystem development and our partner network through the proxy allocation of veBAL voting power.
Both parties commit to hold the swapped assets for at least one year.
Both DAOs remain open to explore future treasury swaps as the Aura ecosystem develops.

Olympus Flex Loans:

Whitelist Aura for usage of Olympus Flex Loans with the following conditions:

LTV: 100%.
Global debt limit (max borrowable amount): 200k OHM.
Interest rate: 0%.

Aura has the option to use Olympus Flex Loans to bootstrap a future AURA/OHM pool on Balancer.

Others:

Olympus to start internal assessment and governance vote to whitelist Aura for treasury deployments. This is a standard practice and necessary for deploying any treasury funds. Aura core team will work closely with the Olympus team and community to help them understand both the benefits and security practices of Aura.
Both parties are currently also exploring a bond programme for Aura to diversify their treasury and to extend their operational runway. These details are yet to be finalized and will be posted as a separate AIP (for Aura governance) in the future.

Both parties also commit to continue to explore other areas of collaboration in this partnership.

Polling period

The polling period begins now and will end on Monday, July 11th at 23:59 UTC. Afterwards, this OIP will be added to Snapshot for a final vote.

Supplementary Information about Aura

Aura is a metagovernance protocol, allowing liquidity and rewards to be better optimized on Balancer with the participation of BAL stakers and protocols. Aura was built to be agnostic toward any “ve” token model. Aura is supported by the Balancer Labs team, prominent Balancer community members like “SolarCurve” and “Mike B”, DAO partners like Gnosis, Badger, and Redacted Cartel, and multisig signers 0xSami, Darren Lau, Tetranode, and more.