Summary Redeem 7,175 WAR to LP WAR-ETH with PoL and direct our vlAURA emissions towards this pool
Context
Paladin owns 14,354 WAR coming from its CVX deposit. It is currently yielding an average of 45% APR in ETH (equating to close to 12,000$ in ETH yearly).
Rationale
While this is a good deal, a lot of stakeholders have underlined the importance of creating liquidity for fast exit or entry into WAR. This is something we were waiting Balancer v3 to launch, but with the multiple quarters of delay we believe launching on v2 will be opportune.
Other than enabling fast exit, liquidity will also enable the possibility of lending (if liquidity is large enough) and the LP will raise the stkWAR yield. Effectively, all WAR in the LP will be giving their WAR in exchange of LP rewards.
Since WAR is yielding around 45% ETH yield, we can expect the LP to be attractive starting at 50% APR. Our current 70,000 vlAURA stack should enable us to drive 18,000$ of emissions per year, hence host an expected 36,000$ of LP (containing 15,000 WAR). By owning ourselves 22,000$ of this liquidity we will likely raise our yield generation and raise all of our user’s yield while making the product more attractive.
Means:
Redeem 7,175 WAR
LP the ETH earned from redemption with the rest of WAR
With current liquidity of 67k, if we adds 14,354 $WAR worth 18660$. We will capture about 28% of the emissions. The current APR might be high (170%) but it should greatly decrease as 60% of the votes for the gauge were from an OTC deal.
Overall it would means our WAR LP position would earn us 19% APR which is far lower than the 40% APR we should get next week with warlord and that should stabilize.
I propose then that we don’t enter in this LP with our WAR’s.
If you have any feedback, feel free to express yourselves as I don’t really know if there is a better option
vlAURA (& vlLIQ) votes should be delegated to the autovoter to accumulate stablecoins imo, especially if not worth adding liquidity as 0xTekGrinder said
Liquid is on pause for now / dead and has barely any incentives anymore, so hard to get anything in there. As for vlAURA, do you feel getting 2000$ of additional revenue is better than having liquidity for Warlord? (honest question, I literally have no strong opinion on the matter for now)
For Liquis better to get small yield than nothing ig, but yeah if bribes are low & since it seems they removed all liqLIT liquidity & part of the yield, the DAO is rekt on this one.
For Aura, didn’t check the maths but there’s already $73K liquidity with a decent yield on Balancer atm, so if we’d earn less in LP as 0xTekGrinder said, better to accumulate stables with the vlAURA to handle op costs & keep earning ETH on Warlord holdings imo.
Oh ok so there was OTC bribes + DAO voting power, got it
Well, according to Aura front there are only 3 LPs & all time volume is below $3K on the pool so doesn’t look much used anyway. I’d still rather use the vlAURA votes to grow the stable treasury
