[AIP-01] Add stETH as Collateral to AQ1

Abstract AIP-01 proposes to add Lido Staked Ether (stETH) to the composition of AQ1 Vault, making the backed floor price of AQ1 collateralized mostly by stETH.

Summary AQ1 Vault is currently composed of ETH, WETH, and Blur Pool. This AIP proposes to implement stETH as collateral to AQ1 by swapping to ETH the entire AQ1 Vault's balance of WETH and Blur Pool, and then, adding it with the AQ1 Vault's balance of ETH to stake the resulting total amount of ETH on Lido. As a result, the interest earned by AQ1 Vault over its ETH staking becomes reflected on the backed floor price of AQ1 - with the yielding of the backed floor price of AQ1 occurring paired with the rebase events of AQ1 Vault's ETH staking.

Motivation This AIP seeks to implement a low-risk and simple strategy to yield the AQ1 Vault, which will directly reflect on yielding the backed floor price of AQ1.

Implementation This AIP requires a simple implementation, on which the Blur Pool amount held at AQ1 Vault becomes swapped to ETH (via Blur), and the WETH amount held at AQ1 Vault becomes swapped to ETH (via Uniswap), on which both amounts are added with the current ETH balance of AQ1 Vault. Then, the resulting total amount of ETH becomes staked on Lido.

AQ1 Dashboard’s interface will have added stETH to its gauges.

As a result, this AIP materializes Aliquo V2.2. Changes from V2.1 (current version) incurred by AIP-01 will be included in the Aliquo V2.2 Whitepaper and the Aliquo V2.2 Documentation.

Operation

The management of AQ1 Vault (swap and stake) will occur (1) every 28 days, or (2) until the AQ1 Vault's balance of ETH, WETH, and Blur Pool reaches the minimum amount of 5 ETH (when adding ETH, WETH, and Blur Pool as ETH-only). This means, if 5 ETH were accrued in 7 days, the vault will stay accumulating for 21 days until reaching the vault's epoch (28 days). On the other hand, if 4 ETH were accrued in 28 days, the vault's epoch becomes extended until reaching the minimum amount of 5 ETH accrued.

Rationale By becoming collateralized mostly by stETH, the backed floor price of AQ1 is expected to compound (by capturing royalties over secondary sales as backed floor price) and yield (by staking such royalties over secondary sales).

The result of implementing this AIP makes the AQ1 Vault accrues automatically the interest earned over its ETH staking, which is reflected on the backed floor price of AQ1 at the time a rebase event occurs, as described by Lido: ‘‘stETH is a rebasable ERC-20 token. Normally, the stETH token balances get recalculated daily when the Lido oracle reports Beacon chain ether balance update. The stETH balance update happens automatically on all the addresses holding stETH at the moment of rebase. The rebase mechanics have been implemented via shares’’.

Currently, AQ1 Vault’s balance sheet equals 35.555 ETH (if measured ETH, WETH, and Blur Pool as ETH-only):

• 31.91512 ETH
• 1.20021 WETH
• 2.44055 Blur Pool AQ1 Vault Address: 0x18c1ea679aad89e495ca0fae3a7092c239d755d3
• 35.555 ETH (AQ1 Vault's current total ETH balance) staked on Lido currently generates 0.144 ETH of monthly interest – based on the current 4.8% APR provided by Lido (or 1.698 ETH).

References stETH/wstETH Integration Guide