This proposal would grant the Music Directors the discretion to swap current and future auraBAL holdings for AURA and/or B-80BAL-20WETH, to be staked as vlAURA or veBAL respectively.

=========== MOTIVATION

WIth the upcoming launch of Aura Finance and Balancer Boost on Optimism, Beethoven-X has an opportunity to lean into our Optimism deployment and the prospect of increased total value of AURA and BAL emissions for gauge enabled pools on the chain. One way through which we can do this is by directing emissions using our DAO Treasury veBAL and vlAURA holdings.

In November 2022, as a result of BIP-28, Beethoven-X DAO Treasury acquired equal valuations of veBAL, auraBAL, and vlAURA through market purchase (and staking) of each using treasury stablecoin funds. We have continued to build our vlAURA and veBAL positions with a share of protocol revenue, and each of these are used to collect bribes to compound back into the position or direct emissions to pools on Optimism.

The DAO Treasury currently holds ~2,021 auraBAL which are staked with Aura, as well as ~20.3 auraBAL as pending rewards from our vlAURA position. The staked auraBAL earns a variable APR but carries no gauge voting rights and so does not aid us in directing emissions.

vlAURA and veBAL do carry voting power in their respective gauges, with each position able to earn from gauge bribes while directing emissions to pools of our choosing.

By exchanging the current auraBAL holdings (and future auraBAL earnings) in order to build our existing positions in vlAURA and/or veBAL, we would increase our vlAURA/veBAL gauge voting power with the aim of directing a greater value of total liquidity mining incentives to pools on Optimism. We expect this would help increase TVL and earnings from our Optimism deployment.

=========== IMPACTS

This proposal would alter the DAO Treasury asset allocation, reducing auraBAL exposure while increasing vlAURA and/or veBAL exposure. This change increases our ability to direct BAL/AURA emissions to pools on our Optimism co-deployment so is expected to aid in our goal of increasing TVL and revenue from the chain.

There is no anticipated negative impact for the team, contractors, treasury, tokenomics, Music Directors, the Guide Tones, or other committee recognised by the DAO.

=========== RISK ASSESSMENT

Risks of this proposal include: i) Changing asset allocation of Treasury carries risk of greater or lesser total returns, however this risk is to be weighed against the abovementioned potential for attracting liquidity and hence revenue for the protocol. ii) The change in asset allocation also alters Treasury exposure to smart contract risk, with reduced exposure to technical elements of auraBAL iii) Both vlAURA & veBAL are locked positions and so this proposal increases illiquidity of a portion of Treasury assets that would otherwise be held as auraBAL iv) There is no significant expected risk of greater centralisation risk, since auraBAL and vlAURA mechanics are both alterable by Aura Finance contributors.

=========== SPECIFICATION

This proposal would grant Music Directors the discretion to sell current and future Beethoven-X DAO Treasury holdings of auraBAL in order to increase DAO Treasury holdings of vlAURA and / or veBAL.

=========== EXECUTION PLAN

Following successful vote, the Beethoven-X Music Directors would sell current DAO Treasury auraBAL, and use the proceeds to purchase AURA and then lock this as vlAURA on Aura Finance. The exact swap routing will be at Music Director discretion but will aim to maximise return from the transactions while accounting for gas costs.

Any and all future earnings of auraBAL will be sold in order to increase veBAL and/or vlAURA holdings, with the timing to be at discretion of Music Directors while maintaining an aim for maximal return from the transactions.

The DAO Treasury address on Ethereum Mainnet is 0xea06e1b4259730724885a39ce3ca670efb020e26, all sales of auraBAL would be from this address and result in increased holdings of veBAL or vlAURA for this address.

=========== Discord Discussion Channel

https://discord.com/channels/885764705526882335/1121360266010050641