PR with Payload
Enable Gauge for Stable Swap kaiAURA / AURA (Ethereum)
Updated Summary
This proposal requests the approval of a secondary stable swap gauge for the pool kaiAURA / AURA on Ethereum. This pool will continue to enhance liquidity and yield opportunities for AURA holders while also supporting the movement of larger whales in and out of the kai ecosystem with reduced price impact.
There has been community feedback requesting the ability to transfer larger sizes through the kaiAURA-AURA pool with smaller slippage. While there is concern for peg deviations, robust growth mechanisms are necessary. A proposed solution addresses both concerns. The DAO finds it best to keep both pools, kaiAURA-AURA Volatile Pool and kaiAURA-AURA Stable Pool, running and incentivized. It is recommended that members use an aggregator (Balancer UI, Odos) when swapping to provide the best swaps across both pools.
The general thought is that for 1:1 trades, better execution will occur on the stable swap until a certain point, at which it should pull from the volatile pool. However, deviations of even a few percentage points can further unbalance the pool, making the volatile pool essential for liquidity in extreme cases.
kaiAURA DAO emphasizes substantial kaiAURA liquidity and showcasing it for on-chain tooling.
Pool Details
- Pool: Liquidity Pool (v3) - Stable kaiAURA / AURA
Balancer Pool - Pool Contract:
0x2A2C4CBa6f46a10C1FCAB96bA2AC88E4642a929f Gauge Address 5% (Ethereum):0x26a8296eb7e288fc5e5ddde46c1730ccacddb946- Gauge Address 2% (Ethereum) Updated:
0x7a59aF3a8650Edc8ebE6d79162A2Aa97f2B98AAC
References / Useful Links
- Website: kaiAura.finance
- Documentation: kai Docs
- Communities: Discord, X
- Dapp: app.kaiaura.finance
- Dune Analytics: kaiAuraDAO Dashboard
Protocol Description
- AURA is the governance token of Aura Finance, built to maximize rewards for liquidity providers and veBAL stakers. AURA holders can lock tokens for vlAURA to earn rewards and participate in governance.
- kaiAURA is a tokenized wrapper of AURA from kai, designed to amplify rewards for stakers as staked kaiAURA receives yield.
- kai is a DeFi protocol built to optimize and amplify rewards for AURA stakers. Users can convert AURA into kaiAURA, a tokenized wrapper providing enhanced yield opportunities. Rewards include real-time USDC payouts (additional Aura, Pal, and WETH pending governance) and additional rewards via the $KAI token.
Shortly after launch, kai became a top 27 vlAURA holder with over $900,000 TVL, demonstrating strong community interest and its potential to grow liquidity across the Aura and Balancer ecosystem.
Motivation
The kaiAURA / AURA gauge is strategically important for several reasons:
- Incentivized Bribes: kai has allocated $15,000 USDC for bribe emissions for Paladin Quest voting emissions. If used within the first three months, kai would be among the top 8 apps based on historical voting incentives.
- Support AURA Holders: This pool enables AURA holders to access kai’s amplified yield opportunities, including real-time yield rewards, governance utility, and new staking options.
- Strengthen Balancer Liquidity: By pairing kaiAURA with AURA, this pool increases Balancer’s TVL and trading volume, driving value back to the protocol treasury through fees.
- Boost Ecosystem Collaboration: Balancer benefits from kai’s integrations, improving liquidity efficiency and attracting new users.
- Enable Sustainable Growth: The pool fosters the broader adoption of kaiAURA and AURA, creating a cycle of increased liquidity, yield, and governance participation.
In short, this proposal benefits kai, Aura, and Balancer, reinforcing Balancer’s position as a leader in community-driven DeFi liquidity solutions.
Specifications
Governance
- Governed by kai DAO, with community-driven governance initiatives.
- kaiDAO Address: Debank Profile
Oracles
- No external oracles required.
Audits
- Open Source Code: kai Contracts GitHub
- Audit Status: Currently unaudited, with plans for Phase III audit.
- The code is built from Aura contracts with slight modifications for enhanced rewards.
Centralization Vectors
- Non-custodial and decentralized protocol with strong community engagement and ecosystem collaboration.
- Three early contributors with a total of 7 contributors.
Market History
- kaiAURA stakers earn 2x what a typical vlAURA holder earns, due to not all kaiAURA being staked.
- Users add liquidity to the kaiAURA-AURA pool for trading fees and gauge rewards.
- Pool Strategy: Initially set to volatile, as a stable swap pool previously caused peg deviations.
- Liquidity & Gauge Rewards: The presence of strong liquidity and active gauge rewards will benefit the community and help maintain peg stability.
Value Proposition
The kaiAURA ecosystem provides added functionality for AURA:
- Users can convert AURA to kaiAURA either 1:1 or at a discounted market rate.
- Users gain access to amplified staking rewards.
- Additional Pal rewards from staked Paladin Loot.
- Additional kai emissions.
- No lock-up & no fees.
The kaiAURA / AURA pool will:
- Serve as a key liquidity hub for AURA and kaiAURA, enhancing trading efficiency and volume.
- Increase protocol revenues for Balancer through trading fees and liquidity mining incentives.
- Attract new participants and strengthen the DeFi ecosystem.
By combining kai’s innovative yield strategies, Aura’s governance model, and Balancer’s robust infrastructure, this pool represents a major step forward in DeFi liquidity management.
Special Note
- The pool is a standard Balancer v3 pool, with customizable fees.
- The DAO has the ability to modify fees.
- Initial fee: 0.3%, with adjustments over time to benefit the ecosystem.
Gauge Address
Gauge Address 5% (Ethereum):0x26a8296eb7e288fc5e5ddde46c1730ccacddb946- Gauge Address 2% (Ethereum) Updated:
0x7a59aF3a8650Edc8ebE6d79162A2Aa97f2B98AAC - Gauge Type:
Ethereum
We invite the Balancer community to review and support this proposal. Feedback and discussions are welcome to refine this submission further. Thank you! 