Add a Balancer+Aura strategy with a max rETH allocation

SUMMARY

Build and deploy a yield-earning strategy utilizing Balancer Meta Stable pools as an initial entry into the Balancer ecosystem. Boost the rewards by staking with Aura.

BACKGROUND

Balancer is the third largest decentralized exchange on Ethereum with a TVL over $500 million. Since the initial launch of OUSD in 2020, we've always intended to integrate Balancer but never quite agreed to prioritize it. AMMs have proven to be a safe and reliable yield source, as both OUSD and OETH have earned substantial yield from Curve strategies without any loss of funds. Now with the launch of OETH, it makes sense to expand to Balancer where we can tap into a variety of LST pools.

Aura is the meta-governance layer for Balancer as Convex is to Curve. When liquidity providers stake their Balancer pool tokens with Aura, they earn trading fees, boosted BAL rewards, and AURA incentives. Aura has a TVL of around $300 million and a veBAL share of 38.34%.

OETH's current rETH strategy is to simply hold it. We don't currently have any way to put it to work without swapping it for something else. As a result, two prior proposals have been approved to convert rETH into WETH and deposit it into Curve.

• Swap one third (1/3) of rETH for WETH
• Swap one half (1/2) of rETH for WETH

OVERVIEW

If approved, this proposal would signal the community's support for two next steps:

• Deploy a yield-earning strategy involving the Balancer rETH+WETH pool (+ Aura staking)
• Allocate 100% of the protocol's rETH holding to this new strategy along with up to a matching amount of WETH

Note that the allocation of rETH and WETH to the strategy will be gradual. At the discretion of the Strategists, the allocation will ramp up from 0 to approximately $13 million over the course of two weeks.

ANALYSIS

rETH amount held	4,215.957
USD value	$6,998,573
Current APY from holding rETH	3.21%
Current APY on ETH over-allocated to Curve	1.57%
Projected strategy APY	5.07%
Projected OETH APY 𝚫*	+54bp

* See OETH Math

DISCLAIMER

🤞🏼 APY on any pool can change quickly and does so regularly. The rETH+WETH pool on Balancer is no different. With this entry into the Balancer ecosystem, we’re betting that over the long term, there will be a variety of compelling pools we can use to generate yield from time to time.