TLDR: Deposit $2m into the Badger/rETH 50:50 balancer gauge (and then into aura) with the intention of farming yield and increasing on-chain liquidity for the Badger token.
Rocket pool is a decentralized Ethereum staking pool with nearly 300,000 ETH staked at the time of writing. With the move to proof of stake being a success, having exposure to staked ETH in the Badger treasury is more important than ever. The rETH product by rocket pool can be paired with BADGER tokens on Balancer/AURA to earn fees, BAL and AURA rewards. A gauge has been approved by the Balancer governance and can now be voted on with veBAL, vlAURA or bribed through hidden hands. This deposit will also create a significant amount of liquidity for the pool to be arb’d against the existing wBTC pools.
Deposit $2m BADGER/rETH into the balancer gauge and move into aura to allow for voting and bribing on the LP.
This deposit will remain indefinitely until a better source of yield is found for the ETH or in the case it is needed for operational expenses.
- Protocol risk (0 - 10): Likelihood of a smart contract or a system of smart contracts (protocol) is exploited or funds are lost
4: This puts funds at risk to Balancer, Aura and rocket pool, all have been audited and have a strong track record.
- Liquidity risk (0 - 10): Liquidity risk refers to how easily an asset can be bought or sold in the market.
0: There is no liquidity risk as this is an LP position.
- Market risk (0 - 10): Market risk is the risk that arises from movements in stock prices, interest rates, exchange rates, and commodity prices. Metrics to consider : VaR, skew, sharpe.
5: There market risk here comes from Impermanent Loss which is only an issue if the funds are needed prematurely or in an emergency.
- Execution risk (0-10): How long will it take to execute, how many signers on a Multisig or queue of things that must be signed first.
3: Will need to be scripted but can be done in one single tx.