Hi Everyone,
Please see Part 3 of 3.
[ARFC] Acquire BB-A-USD and deposit 50% into both Balancer and Aura Finance
title: [ARFC] Acquire BB-A-USD and deposit 50% into both Balancer and Aura Finance
discussions: [ARFC] Deploy Ethereum Collector Contract
shortDescription: Acquire Aave v3 BB-A-USD and deposit 50% into both Balancer and Aura Finance
author: @llamaxyz - @TokenLogic
created: 2023-05-13
Summary
This publication proposes Aave DAO acquires BB-A-USD and deposit equally amounts into Balancer and Aura Finance contracts to earn yield.
Abstract
This publication presents Aave DAO ability to acquire BB-A-USD via Cowswap with MEV protection and with defined price impact conditions. The BB-A-USD token is to be deposited 50% directly into the Balancer gauge and 50% into Aura Finance’s contract.
Aave DAO will earn BAL, AURA, swap fees and yield from Aave v3 via the linear pools. $3M is to be allocated to this strategy and the expected yield is around 9.3% without any boost from Aave’s future veBAL holding.
Aave DAO will also gain the ability to create a BB-A-USD/GHO pool using BB-A-USD acquired by this proposal.
Motivation
The current aethUSDC, aethDAI and aethUSDT holdings are shown below:
The below shows the amount of DAI and USDT being migrated from Aave v2 to v3.
| Network | Instance | Token | Quantity | Value (USD) |
|---|---|---|---|---|
| Ethereum | Aave V2 | USDT | 3,119,535.51 | $3,119,535.51 |
| Ethereum | Aave V2 | DAI | 2,894,904.40 | $2,894,904.40 |
| $6,014,439.91 |
The table below shows the Aave v3 holdings after Part 2 of 3 has been implemented.
| Network | Instance | Token | Quantity | Value (USD) |
|---|---|---|---|---|
| Ethereum | Aave V3 | aethUSDT | 3,155,411.89 | $3,155,411.89 |
| Ethereum | Aave V3 | aethDAI | 2,903,799.83 | $2,903,799.83 |
| Ethereum | Aave V3 | aethUSDC | 58,173.59 | $58,173.59 |
| $6,117,385.31 |
After allocating $3.00M to BB-A-USD, Aave will have the following v3 holdings.
| Network | Instance | Token | Quantity | Value (USD) |
|---|---|---|---|---|
| Ethereum | Aave V3 | aethUSDT | 1,655,411.89 | $1,655,411.89 |
| Ethereum | Aave V3 | aethDAI | 1,403,799.83 | $1,403,799.83 |
| Ethereum | Aave V3 | aethUSDC | 58,173.59 | $58,173.59 |
| $3,117,385.31 |
The aethUSDC is to remain deposited in Aave v3 and accumulate over time to facilitate any future Service Providers request for payment.
Aave also holds 4.5M of aUSDC on Aave v2 from Part 1 of 3 asset consolidation.
With the new Aave v3 Boosted Pool created, gauge contract deployed and Aura Finance integration complete, Aave DAO can now proceed attain the BB-A-USD and use it to earn yield.
At the time of writing, routing a swap from stable coin to BB-A-USD incurs positive slippage. This is true for using all three stable coins. When setting the parameters for acquiring the BB-A-USD token, a maximum price impact of 0.20% will be used.
The methodology used for acquiring BB-A-USD will be the same approach used to acquire BB-80BAL-20WETH.
It has taken months to create a reusable approach that prevents MEV attacks and provides the ability to limit the price impact incurred when performing a swap. The methodology has been reviewed by Cowswap and Bored Ghost Developing.
Upon receiving the BB-A-USD token, 50% is to be deposited into the Aura Finance contract and 50% is to be deposited directly into the Balancer gauge.
Specification
The following asset holdings are to be redeemed and used for acquiring BB-A-USD.
| Network | Instance | Token | Quantity | Value (USD) |
|---|---|---|---|---|
| Ethereum | Aave V3 | aethUSDT | 1,500,000 | $1,500,000 |
| Ethereum | Aave V3 | aethDAI | 1,500,000 | $1,500,000 |
Detailed execution details will be provided in the comments prior to submitting the AIP. This will enable Llama and Bored Ghost Developing to optimise the execution methodology.
Copyright
Copyright and related rights waived via CC0.