# Asset Onboarding Report Template

## Factual Presentation

### Yield Generating Position

**What is the liquidity of the position?**
[0, Yearn Vault](https://yearn.finance/#/vault/0xc5F3D11580c41cD07104e9AF154Fc6428bb93c73)
- New Vault
- User deposits on Yearn are equivalent to deposits in the Element pool of the onboarded asset

**What is the liquidity of the underlying strategy?**
bb-a-usd(Balancer): [~$150m TVL, ~$370m 90day Volume](https://app.balancer.fi/#/pool/0xa13a9247ea42d743238089903570127dda72fe4400000000000000000000035d)
bb-a-usd(Aura): [~\$86m TVL](https://app.aura.finance/)

**What are the financial risks associated with each underlying strategy ?**
Smart Contract Risk

Core Contracts:
[Yearn Vault Contract](https://etherscan.io/address/0xc5F3D11580c41cD07104e9AF154Fc6428bb93c73)
[Balancer Pool Contract](https://etherscan.io/address/0xa13a9247ea42d743238089903570127dda72fe44)

Other Contracts:
[Strategy Contract](https://etherscan.io/address/0x33e1086881F3664406Bba42Dcae038C5CD26F184)
Strategy Manager has control over the following
- Amount of BAL to be locked in Yearn's veBAL voter per harvest, default is 10%
- Setting to claim rewards on withdrawal (not currently enabled)
- Manually harvest rewards with a keeper

[Balancer Vault Contract](https://etherscan.io/address/0xBA12222222228d8Ba445958a75a0704d566BF2C8)

~~**How does the position’s liquidity compare to the underlying assets’ circulating supply?**
Position's liquidity is not an overly-large proportion of any underlyings' circulating supply~~
- [ ] This is somewhat subjective and should be discussed in conclusion since all necessary info is presented

**How do users interact with the position? Characterize these interactions and profile these users.**

Step One:

- User may obtain underlying asset bb-a-usd by [swap using the Balancer interface.](https://app.balancer.fi/#/trade)
- OR
- User may obtain bb-a-usd by depositing stablecoin(s) USDC, USDT, and or DAI to their respective balancer boosted pool (e.g. bb-a-DAI) to then deposit that asset to the bb-a-usd pool to receive final underlying asset.

Step Two:

- User deposits bb-a-usd balance directly into the Element yvbb-a-usd vault to receive ptyvbb-a-usd & ytyvbb-a-usd (variable yield)
- OR
- No need to deposit any asset, user may purchase ptyvbb-a-usd at a discount from the yvbb-a-usd Element vault (fixed rate)

[Balancer bb-a-usd pool](https://app.balancer.fi/#/pool/0xa13a9247ea42d743238089903570127dda72fe4400000000000000000000035d) is currently deployed and enabled. Users can interact by swapping USDC, DAI, or USDT for their respective balancer-boosted counterparts, and invest those in the pool to receive BPTs. The BPTs can then be staked in [Aura Finance](https://app.aura.finance/) to earn additional rewards from Aura.

Core Contracts:
[Yearn Vault Contract](https://etherscan.io/address/0xc5F3D11580c41cD07104e9AF154Fc6428bb93c73)
[Balancer Pool Contract](https://etherscan.io/address/0xa13a9247ea42d743238089903570127dda72fe44)

Strategy Contracts:
[Strategy Contract](https://etherscan.io/address/0x33e1086881F3664406Bba42Dcae038C5CD26F184)
[Balancer Vault Contract](https://etherscan.io/address/0xBA12222222228d8Ba445958a75a0704d566BF2C8)

For user breakup, approximately 1/4 of liquidity provider transactions are new users [Dune](https://dune.com/queries/31285/63056)

**Are there any restrictions in place on usage of the position by protocols or individuals?**

[USDT Banned Addresses](https://dune.com/phabc/usdt---banned-addresses)
[USDC Banned Addresses](https://dune.com/phabc/usdc-banned-addresses)
[Balancer TRM Sanctioned Wallets](https://github.com/balancer-labs/frontend-v2/pull/2017)

**What governance processes are in place for the position? What is the scope of governance changes?**

[Gauge Voting](https://docs.balancer.fi/ecosystem/vebal-and-gauges/gauges/how-gauges-work): Affects incentives allocated to the underlying pool which in turn affects the overal return.

[Aura Governance](https://docs.aura.finance/aura/governance): Controls fee rates, gauge voting, and treasury spend

~~**Are there any legal entities responsible for the position? Where are they based? How are they structured? What jurisdictions do they fall under?**~~

### Underlying Assets

**What are the tokenomics of these assets?**
USDT - Centralized fiat-backed stablecoin [Tether's reserves](https://tether.to/en/transparency/)
USDC - Centralized fiat-backed stablecoin [Circle's reserves](https://www.centre.io/hubfs/USDC%202022_Circle%20Examination%20Report%20Sept%202022-1.pdf?hsLang=en)
DAI - Decentralized overcollateralized stablecoin [Dai Collatoral](https://dune.com/queries/58495/116320)
bb-a-(usdc,usdt,dai) - Pool token that is comprised of both base stable assets and AAVE deposit reciepts pegged 1:1 with the stable asset, minted and burned upon deposit/withdrawal [AToken](https://docs.aave.com/developers/tokens/atoken)
BAL - Governance token for Balancer [BAL tokenomics](https://www.coingecko.com/en/coins/balancer/tokenomics)
AURA - Governance token for Aura Finance distributed primarily through Balancer LP Rewards [AURA tokenomics](https://mirror.xyz/0xfEE0Bbe31345a7c27368534fEf45a57133FF3A86/kdpuZ9Zz1ghP9Gch1HrggfpGRhqB4Qox4Vg2CoqVOIY)

**What is the liquidity of these assets? Where is this liquidity?**
USDT - [Abundant across many exchanges](https://www.coingecko.com/en/coins/tether#markets)
USDC - [Abundant across many exchanges](https://www.coingecko.com/en/coins/usd-coin#markets)
DAI - [Abundant across many exchanges](https://www.coingecko.com/en/coins/dai#markets)
bb-a-(usdc,usdt,dai,usd) - [~\$30m in pool value for base stables, and ~\$10-20m in ATokens, approximately ~\$500k in +/- 2% depth](https://app.balancer.fi/#/pool/0xa13a9247ea42d743238089903570127dda72fe4400000000000000000000035d)
BAL - [Very high across many exchanges](https://www.coingecko.com/en/coins/balancer#markets)
AURA - [Mostly on Balancer with $153k +/-2% depth, small amounts on Uniswap](https://www.coingecko.com/en/coins/aura-finance#markets)

~~**How does the circulating supply compare to the float? Are there any lockup or staking mechanisms in place?**~~
- [ ] removing the above question due to redundancy

**What drives the demand of these assets?**
USDT,USDC,DAI - Widely-used and highly-liquid stablecoins
bb-a-(usdc,usdt,dai) - Holders obtain rewards from lending in addition to swap fees in the case of bb-a-usd
BAL - Governance and liquidity incentives
AURA - Governance and liquidity incentives

**Have any assets been depegged or experienced extreme volatility over the past year?**
- [ ] TODO: Update these for 1y chart (used all time)
USDT - [2 sustained periods with >5% depegs](https://www.coingecko.com/en/coins/tether)
USDC - [No sustained periods with >1% depegs](https://www.coingecko.com/en/coins/usd-coin)
DAI - [1 sustained period with >5% depeg](https://www.coingecko.com/en/coins/dai)
bb-a-(usdc,usdt,dai,usd) - [Multiple periods with >5% depeg, none lasting longer than 5 days](https://www.coingecko.com/en/coins/balancer-booster-aave-usd)
BAL - [Volatility appears to align with market-wide movements](https://www.coingecko.com/en/coins/balancer)
AURA - [Volatility appears to align with market-wide movements](https://www.coingecko.com/en/coins/aura-finance)

~~**What is the distribution of these assets? How were they initially distributed?**~~
- [ ] Removing the above questions b/c redundant with tokenomics question

~~**Where is this asset used in the ecosystem? What protocols are involved?**~~
- [ ] Removing this question, redundant with liquidity

**Are there any restrictions in place on usage of the position by protocols or individuals?**
[USDT Banned Addresses](https://dune.com/phabc/usdt---banned-addresses)
[USDC Banned Addresses](https://dune.com/phabc/usdc-banned-addresses)
[Balancer TRM Sanctioned Wallets](https://github.com/balancer-labs/frontend-v2/pull/2017)

**Are there any legal entities responsible for the underlying assets? Where are they based? How are they structured? What jurisdictions do they fall under?**
Circle - USA
Tether - USA
Aura Finance - Anon AFAWK

### Economics

**What does the historical return profile look like?**
[Using Aura Finance's metrics...](https://app.aura.finance/#/)

Current APR is 4.20%
- Swap Fees: 0.12%
- bb-a-USD: 1.06%
- BAL: 1.23%
- AURA: 1.79%

Projected APR is 3.00%
- Swap Fees: 0.12%
- bb-a-USD: 1.06%
- BAL: 0.74%
- AURA: 1.07%

**How are these returns affected by additional liquidity?**
Additional liquidity will cause APR to decrease and approach bb-a-usd + swap fee rate if more BAL and AURA incentives are not distributed.

**How are returns affected by changes in the underlying asset?**
- Returns will increase/decrease with AAVE supply rates
- Returns will increase/decrease with BAL and AURA prices

**Enumerate potential loss scenarios**
- AAVE insolvency cascading into Balancer pool insolvency

### Stakeholders

**Who are the key stakeholders?**
[AURA Finance](https://twitter.com/AuraFinance)
[FIAT DAO](https://twitter.com/fiatdao)

**Are they anon or doxxed?**
AURA Finance - Anon
FIAT DAO - Mixed

**Do they have any previous projects/experience? What are they?**
AURA Finance - Has many other staking pools for Balancer. The wstETH/ETH pool has ~$237m TVL.
FIAT DAO - Collateral partners with Element Finance, Notional Finance, and Yield Protocol.

### Communication

**What forms of communication does the protocol use?**
AURA Finance - Active on both [Twitter](https://twitter.com/AuraFinance) and [Discord](https://discord.com/invite/aurafinance)
FIAT DAO - Active on [Twitter](https://twitter.com/fiatdao), Discord link invalid

~~**How long have they been in use?**~~

~~**What frequency are communications sent out?**~~

**How have issues been communicated in the past? How long did it take for the issues to be communicated? Are they followed up on?**
No major issues have come up.

~~**How active is the community in each form of communication?**~~

~~**How does the community interact on these communication platforms? With what frequency? Are these typically surface-level (wen moon) or deeper technical questions? Characterize the interactions.**~~

## Conclusion

Below is a summary of findings for each of the relevant topics:

**Yield Generating Position**
The liquidity and TVL for the Balancer boosted pools as well as the Aura staking vault is sufficient compared to Element's existing assets. The smart contracts associated are also widely used and trusted across defi. Usage currently requires a multi-step process which could be made easier through the introduction of zaps on the Element frontend. No unusual restrictions or controls by governance were noticed.

**Underlying Assets**
The underlying assets that are critical to the safety and continued performance of the proposed yield bearing asset are widely-used and/or well-regarded. While \$BAL is comparitively volatile, and \$AURA has relatively low liquidity, these assets both act as rewards and are not resposible for the base mechanism of yield generation (organic yield from AAVE stablecoin lending positions). It is highly unlikely that extreme events with these tokens would result in loss for funds for users or the protocol.

**Economics**
Current yield for the underlying position is competitive. Going forward, the position has the ability to remain competitive so long as gauge rewards increase with demand. The potential loss scenarios are incredibly unlikely (defi armageddon) and not unique to the underlying position.

Given the information presented in [EGP-14](https://forum.element.fi/discussion/7119-egp14-onboard-yvbalancerboostedaaveusd) as well as the research above, it is reccommended that Element move forward with the onboarding of yvbb-a-usd to increase the TVL of the protocol and diversify yield source offerings.

***Disclaimer: This report embodies the informed opinion of a group of individuals and none of the information presented or conclusions drawn are to be taken as financial advice***