Understanding Aura Finance in one article: The biggest winner of Shanghai's upgraded LSD track?
Original author:X, DeFi researcher
Original author:
, DeFi researcher0x MakiOriginal Compilation: Leo, Blockbeats
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With Ethereum's upcoming Shanghai upgrade, the LSD token may continue to prove to be one of the best crypto narratives in 2023. Even so, I still believe that the biggest winner of the upgrade environment backed by Shanghai will not be the LSD agreement, but Aura Finance. The reasons are as follows:
Shanghai’s upgraded staking withdrawals will prompt LSD to incentivize their LPs to neutralize the increased preference for single-side staking. And Aura Finance is the perfect agreement to achieve this goal. It promotes more efficient liquidity supply by incentivizing Balancer voting.
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Aura Finance in action
It is worth noting that Aura Finance has quietly established partnerships with almost all major LSD protocols, including Lido, Rocketpool, Frax, Swell, Stakewise, Stader, Ankr, and StaFi, all of which will be available during the Shanghai upgrade phase incentives. In addition, expect more other projects (EtherFi, Diva, Swell) to follow.
Unlike the Lido protocol, the only way to distinguish other LSD track protocols is through the ultra-high yield rate. Frax's sfrxETH is a good example. By providing a yield rate of up to 40%, Frax succeeded in 4 months Occupying 1.5% of the ETH staking market share.
For other protocols, in order to compete with the leaders of stETH and cbETH and gain market share, smaller participants need to be encouraged to vote and obtain:
- higher yield
-increased mobility
-Integrate DeFi
Rocketpool is considered the first project to realize the potential of AURA. Since the incentivization started 3 months ago, the liquidity of rETH-WETH has increased by 6 times, resulting in a substantial increase in transaction volume and fees. Currently, RPL is still the largest participation on Aura Finance one of them.
Better liquidity enables more DeFi integrations, Aave, Pendle and other protocols are now looking to join rETH, all only possible through Aura Finance.
The RPL approach gives examples for basic LSD growth:
Paying voting rewards - increasing liquidity and TVL - integrated to build a secure and differentiated product. Judging from the results, it is only a matter of time before other cooperative agreements follow suit and start injecting funds.
Figures show that for every $1 spent generating $2.35 in emissions, Aura Finance is 64% more capital efficient than Convex.
The battle for ETH staking market share will drive all boats up AURA as every LSD protocol from Lido to Frax wants to join.
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Catalytic AURA's other important projects
OlympusDAO bought $200,000 and will buy another $800,000 in the next 4 months, and recently deposited ~$70 million worth of BPT in Aura. Additionally, they sold their CVX position to buy AURA.
Frax Finance is also looking to accumulate AURA, as hinted by its founder Sam, Frax is discussing a pilot voting incentive program for an enhanced FRAX pool.
Synapse Protocol also proposes to migrate SYN liquidity to Balancer and start providing voting incentives on Aura. Voting rewards of approximately $100,000 per round will increase vlAURA revenue by approximately 30%.
The Redacted cartel will launch its LSD-backed stable DINERO after the Shanghai upgrade, and will likely incentivize liquidity through its vlAURA holdings.
Stargate Finance, a major stakeholder in Aura, also recently offered $210,000 in incentives, the largest amount of incentive money it has committed to Aura to date.
Aave's incentive plan has also been put on the agenda recently. It will promote the proposal to lock veBAL in the next few days, and it can also motivate GHO liquidity through Aura.
Alchemixfi has transferred the liquidity of its ALCX to Balancer, and will use the funds held by its TOKE to purchase AURA. Future Alchemix assets may be integrated, and discussions on providing voting incentives are already underway.
Speaking of Arbitrum, once cross-chain is possible, we may see many Arbitrum projects enter its Aura ecosystem. Like, what happens when MAGIC, JONES, GMX, GNS, DOPEX, VSTA, etc. all start incentivizing vlAURA voting with LSD?
The cooperation with Aura continues, and new partners include Ribbon, Liquity, Pendle, Gearbox, Euler, etc.
-0x AA 857 dDCe 7 b 5 b 9 cB 17296 c 790 CB 40 e 8 C 11 A 3D 4 F 0
-0x 19 ae 63358648795 aaf 29 E 36733 f 04 FCef 683 Aa 69
-0x BB 19053 E 031 D 9 B 2B 364351 B 21 a 8 ed 3568 b 21399 b
-0x 4281 E 53938 C 3 B 1 C 1 D 3 e 8 AFD 2 1c0 2 C E 851 2 C Dbc 93
70-80% of the most recently unlocked vlAURAs have been relocked, with almost no sales. Big players like Gnosis, Badger, and Messi are long term holders accumulating AURA locked every few weeks.ArcaBalancer core team members and seed round investors are also consistent (the following are their addresses, both hold a large amount of BAL and AURA):
Through the accumulation of Nansen smart money in the past month, the number of tokens has increased by 5 times.
Also bought heavily in the past month:
Aura Finance has grown so far, not even including Aura's Balancer-based expansion plans, 0 x Maki and other contributors have hinted at plans to integrate other veTokens.
