[ARFC] Treasury Management - vlAURA

Governance
1

title: [ARFC] Treasury Management - vlAURA
author: @TokenLogic - @MatthewGraham, @defiJesus & @efecarranza
created: 2023-11-03

Summary

This publication proposes locking the AURA holding in vlAURA via the Strategic Asset Manager and delegating managing the position to the GHO Liquidity Committee.

Motivation

The Aave DAO holds a substantial amount of AURA, and the GHO Liquidity Committee (GLC) is actively executing this proposal by swapping 400,000 USDC worth of AURA on the market.

The next step in implementing the strategy is for the DAO to lock the AURA holdings. This publication proposes sending the AURA to the Strategic Asset Manager (SAM) contract. From here, the full amount of AURA should be locked using Function 9 for vlAURA. The voting rights are to be delegated to the GLC using Function 5.

The Guardian role on the SAM contract is already configured to the GLC SAFE address. This can be verified using the Read as Proxy Function 10. The Aave v3 Protocol shortExecutor is set up as the Owner of the SAM contract, as seen via Function 12. This means the DAO’s on-chain governance process can interact with the SAM and, more importantly, retrieve the DAO’s funds if anything were to happen to the GLC.

Only the Owner can transfer funds from the SAM, meaning the Guardian (multisig) cannot transfer funds, and the funds can only be transferred to the Treasury, which is hardcoded into the contract. This means the auraBAL yield (2.38%) from vlAURA must be transferred to the Treasury before being transferred to another address where it can be managed.

The one missing piece of functionality in the SAM is the ability to sell the vlAURA voting rights by participating in Quests on Paladin. This functionality will only take a few days to create before being sent to @bgdlabs for review as part of the normal payload review process.

With the AURA locked in the SAM contract, the GLC is then responsible for managing the DAO’s holdings in the best interest of the DAO/GHO. This entails voting on Aura Finance gauges, governance votes in Aave DAO’s best interest, and selling vlAURA votes via Paladin when it makes sense to do so.

Specification

The below details the key steps to be implemented:

  • Strategic Assets Manager upgraded to support selling vlAURA voting rights on Paladin
  • AURA is transferred to the Strategic Assets Manager contract
  • AURA is locked for vlAURA
  • Voting rights of vlAURA are to be delegated to the GLC
  • GLC is to manage the vlAURA holding

Next Steps

  1. Gather community feedback on this ARFC.
  2. In 5 days scalate this proposal to the Snapshot ARFC stage.
  3. If the snapshot outcome is YAE, escalate the proposal to AIP stage.

Disclaimer

TokenLogic receives no compensation beyond Aave protocol for the creation of this proposal. TokenLogic is a delegate within the Aave ecosystem.

Copyright

Copyright and related rights waived via CC0.

6 Likes
2

In favor.
Are you planning to make a similar proposal for CRV’s allocation?

3

In favour, thanks @TokenLogic!

1 Like
4

Hi @ApuMallku,

Yes - we do intend to propose other assets like auraBAL and whatever the DAO decides to do with the CRV holding, be managed in a similar manner. There are some new products coming to market soon that may determine how the DAO uses the CRV position. In the mean time, auraBAL will be our next focus.

1 Like
5

Cool, thanks @TokenLogic all the idle assets that the DAO possesses in its treasury should be focused on the GHO’s strategy for restoring the peg. Each day that the peg has not been restored it hurts the perception of the product.

6

We are in support of this proposal which leverages the Aave DAO’s AURA to power the GLC’s efforts, we look forward to seeing this kind of proposal replicated with the DAO’s other strategic assets.

7

From what I can tell this is definitely needed for the adoption of the Sam contract or protocol

8

What happened with this proposal? Why is taking so much time to activate a plan for the idle assets (CRV included)? GHO’s peg is not going to be recovered with this poor management

1 Like
9

It seems to have taken a very long time to get things set up and running, but looking on chain it looks to be ready.

It would be a shame to miss this week’s voting cycle, so would suggest the GLC figures out the voting plan before it ends tomorrow.

1 Like
10

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