Summary: Aura Finance is a protocol that is built on top of the Balancer Ecosystem that provides boosted incentives to Balancer liquidity providers. The platform allows users to stake Balancer LP tokens on Aura Finance to earn rewards in the form of AURA tokens. The rewards are generated through a series of smart contracts that redistribute fees from Balancer trades.

The dynamic of Aura Finance and Balancer is similar to how Convex and Curve Finance interact, with AURA being the parallel to Convex. The advantage of Aura over Convex is their speed to deploy cross-chain and ability to attract liquidity and high yields on different networks.

Aura Finance - Key Highlights 🔑

Platform Highlights

  • Deposit & stake Balancer LP tokens to earn boosted AURA & BAL rewards.
  • Aura Finance is like Convex Finance for Curve Finance, but for the Balancer ecosystem.
  • Over $400m in Total Value Locked from BAL LP deposits.
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Table of Contents

How Does Aura Finance Work?

Aura Finance works by redistributing fees derived from Balancer trades. When a user provides liquidity to a pool on Balancer, they receive BAL tokens in return as compensation. This BAL is then used to cover the costs of trading and any fees are distributed to Aura holders.

Aura Finance

The AURA tokens are then used as rewards for liquidity providers. When a user deposits their Balancer LP tokens to the Aura platform, they will receive AURA tokens in return which can be redeemed for more BAL or other assets.

Overall, the dynamic between Balancer and Aura creates a positive loop of incentives where liquidity providers can earn both BAL and AURA tokens for their efforts.

What Assets can I Deposit on Aura Finance?

Users of Aura Finance can only deposit Balancer LP tokens to take advantage of the boosted incentives. LP tokens are minted when a user provides liquidity to a pool of assets on Balancer, and they represent their stake in that pool.

Some of the most popular LPs on Aura and Balancer are the wstETH/WETH Pool at $175m TVL and the rETH/WETH Pool at $36m TVL.

Top 10 BAL LP deposits on Aura Finance.

Protocol Fee Structure

Aura Finance charges a flat fee of 25% of total revenue generated from Balancer LPs. The fee is then distributed to different network stakeholders as follows:

  • 20.5% goes to auraBALstakers. This is paid out as BAL.
  • 4% goes to AURA lockers. This is paid out as auraBAL.
  • 0.5% goes to the harvest caller. This is paid out as BAL.

Aura Finance Token Emissions

he Aura Protocol token emission and distribution was initially planned with 50% for Balancer LP rewards, 10% for StableSwap, 2% for bootstrapping liquidity, 3% for an AURA/ETH LP, 17.5% for the Treasury vested over 4 years, 2.5% for bootstrapping token holder base, 1% for future incentives, 2% for BAL treasury, 2% for veBAL bootstrapping incentives, and 10% for Aura contributors over 2 years.

However, some changes were made to the pre-launch schedule, resulting in an additional 2.82 million AURA being added to the community Treasury, bringing the total supply to 2.82%. The token distribution was fair launched without any VC or seed investors.

Aura Token Emission.
Aura Token Emission.

Is Aura Finance Safe?

Aura Finance has been thoroughly audited by multiple security firms and is considered to be secure and trustworthy. The platform also relies on the same core technology as Balancer which adds to its security. In addition, Aura’s smart contracts are open-source and can be viewed in their GitHub repository for full transparency.

Final Thoughts

Aura Finance is a promising platform that serves to provide enhanced rewards and incentives to Balancer liquidity providers. The platform is secure, transparent, and easy to use, making it an attractive option for users looking to get the most out of their assets on Balancer. In addition, Aura’s dynamic with Balancer ensures that both platforms benefit from the interaction and help to create a positive loop of incentives for liquidity providers.  If you’re interested in taking advantage of boosted rewards on Balancer, Aura Finance is worth looking into.

I hope this article has helped you better understand how Aura Finance works and what it can offer its users.

Co-Founder & former Investment Banker (Finance MBA) turned Full-Time analyst and Head of Research at Buy Bitcoin Bank. Left traditional finance to pursue my interest in digital assets and decentralized finance.