Summary:
Update Balancer ecosystem holdings
Context:
Paladin DAO protocol has been accumulating several assets in the Balancer ecosystem (BAL, AURA, auraBAL, veTETU) following PGM-27: TM-#3.2.
Staking auraBAL was meant to increase the strategic assets earned & veTETU to diversify the voting power on several layers.
However, several events happened since PGM-27, impacting the current strategy:
- tetuBAL highly de-pegged (Currently 34% pegged)
- veTETU DAO position can be unlocked
- auraBAL yield slightly reduced over time
- Aura DAO recently voted on AIP-42 which considerably impacts emissions
Rationale:
Paladin DAO currently holds the following assets related to Balancer ecosystem:
The locked assets multisig also holds 9388 StkWAR, the breakdown can be found here:
Note that vlAURA votes need to reach 0,2% quorum per gauges to be counted (Currently around 38500 vlAURA). AURA held in Warlord can’t be used for this purpose.
The goal of this proposal is to refocus holdings on Aura to benefit from changes from AIP-42 by increasing the holdings comfortably above the quorum amount and slightly accelerate the loan repayment.
No changes proposed on swapping BAL for AURA locked for vlAURA.
1. auraBAL staked on Aura Finance:
The auraBAL position was initiated one year ago by depositing 2832 BAL in the 80/20 swapped for auraBAL. It was first deposited on Llama Union before withdrawing for classic staking allowing the DAO to increase the strategic assets accumulation.
If we were to swap back the auraBAL for BAL now, we’d receive 3585 BAL.
Moreover, acquiring 1$ of AURA equals to 1,16$ of veBAL voting power.
Proposed actions:
- Sell 67% of auraBAL for AURA locked in vlAURA
- Sell 33% to USDC for early repayment
This split would currently acquire 8,8k vlAURA (generating ~ 230$/round atm) and ~ 5.1k USDC for early repayment.
2. veTETU position:
Unlike the auraBAL position, this one is bearing a loss compared to the initial investment: The veTETU acquisition was initiated early January 2023.
- Amount invested: 1324 BAL sold for 9147$ (6,90$/BAL)
- Current value in $: 4000$ (- 57%)
- Current value in BAL: 934 BAL (- 30%)
The options are either to relock it and wait (leading to another period to decay), or exit with and swap for AURA to remain exposed to the Balancer ecosystem. Swapping 100% for AURA would acquire an additional 3,4k vlAURA (generating ~ 85$/round atm)
Proposed actions:
- Sell for AURA locked in vlAURA
Considering that the DAO holds 34k vlAURA, this proposal and next month protocol fees & BAL farmed & sold for AURA would lead to ~ 48/50k vlAURA, which is higher than the quorum needed for one gauge.
For this reason, another proposal to change the voting strategy might be posted at a later stage, but until then the strategy proposed remains unchanged:
Delegate to paladin-voter.eth & claim USDC monthly to pay the loan interests.
As a reminder, the remaining loan amount is 200k$ with 15% interest rate, so 2,5k$ interests/month. If this proposal is approved, the estimated vlAURA holdings should cover the quasi totality of the interest costs.
Means:
Coordination with multisig signers to execute updates if approved
Technical implementation:
- Unlock veTETU & withdraw from LP 80/20
- Sell all TETU LP for USDC on Polygon
- Bridge USDC on mainnet on main msig & sell for AURA
- Unstake auraBAL from classic staking
- Transfer auraBAL to main msig
- Sell 70% for AURA & 30% for USDC
- Transfer AURA back to locked msig
- Approve & lock AURA for vlAURA
Voting options:
- Yes, sell auraBAL + veTETU for AURA & USDC
- No, rework proposal
- Abstain
- Yes, sell auraBAL & veTETU for AURA & USDC
- No, rework proposal
- Abstain
