Jonesies, the days of asking “wen” have come to a close - jAURA is here. In this article we’ll be exploring jAURA, how it's designed, and why you, an esteemed member of our community, should be using it. Let’s get into it.
What is jAURA?
jAURA is an auto-compounding vault strategy that allows users to earn automatic yield on their vlAURA holdings.
The auto-compounding mechanism makes use of three protocols:
- Aura Finance
- Redacted Cartel’s Hidden Hand
Over time, jAURA generates more underlying vlAURA, which means users can collect yield without having to manage advanced strategies on the backend.
The purpose of jAURA? Give Jonesies the easiest, most effective way to grow their AURA balance.
jAURA consists of two vaults:
- Non-tokenized auto compounder called jAURA
- Liquid staking derivative (LSD) vault with a receipt token called wjAURA.
The LSD vault redirects a percentage of its collected rewards to incentivize liquidity, while the non-tokenized auto compounder does not give any liquidity incentives and thus has a higher APY. When depositing into the overall vault strategy, users will choose between the liquid wrapper or the locked position that maximizes yield.
It's important to optimize the performance of any vault that is built for maximum jeenis growth. This is why we have partnered with Redacted Cartel & Balancer to bring two huge upgrades to our jAURA strategy.
With Hidden Hand integrated into jAURA, bribes are made automatic and efficient. No longer will you have to spend any time considering votes, it is done in the most optimized way for you, Jeenius approved.
Further - those interested in the LSD wrapper token wjAURA will be able to earn extra liquidity incentives by activating LP on Balancer. A proposal is passing through governance to turn on a gauge, which will pass $BAL rewards along to liquidity providers.
Mechanisms: Rewards Collection & Distribution
Autocompounding is the most important mechanism that jAURA offers to Jonesies. After bribe rounds occur, all rewards collected (including Balancer gauge rewards) are autocompounded to enhance returns to depositors.
jAURA uses Hidden Hand (by Redacted) to automatically handle bribe payouts and rewards. Users do not need to deal with the hassle of deciding on vote delegation to maximize rewards. Throughout each bribe round, the voting engine will optimize votes to achieve maximum yields and distribute the rewards to users. It's all handled jAutomatically.
Waterfall Reward Distribution
After rewards are collected, they’re distributed in the following order:
- Protocol Incentives: A portion of the tokens accrued by the protocol will be converted to ETH and distributed between the Jones DAO Treasury and Aura Finance Treasury. This guarantees both the sustainability of the jAURA strategy and the growth of the Aura ecosystem as a whole.
- Liquidity Incentives: A portion of the tokens accrued by the protocol are then converted into ETH and used as incentives for the liquidity pool. The amount will be defined by the following equation: (LSD jAURA In Pool) / (Total LSD jAURA) * 25% = Reward Incentive
- Withdrawal Queue: If required, any remaining tokens will be converted to AURA and fed into a unified queue for users who have previously requested withdrawal & burned their tokens. This step is designed to be conditional and can be tied to withdrawal requests to maximize efficiency.
- Vault Yield: Next, a portion of the tokens accrued by the protocol will be converted to AURA and accrued proportionally to users positions.
- Autocompound vlAURA: Any remaining tokens accrued by the protocol will be converted to AURA through a TWAP and locked for more vlAURA.
Withdrawals & Rehypothecation
Jonesies looking to withdraw from the jAURA system will have two methods available to them.
First, users can use a liquidity pool to swap at the prevailing market rate at the time of their choosing (only available for wjAURA).
The second option, which is available for both the jAURA Vault and the liquid wjAURA Vault, is a token burn. This second option allows for withdrawal from the next AURA epoch’s available liquid AURA. This method coincides with the two-week epoch time and is available on a first-come, first-serve basis.
If you opt to burn your tokens, its up to you to make sure you withdraw them promptly. If you wait too long, there’s a chance you have to wait until the next epoch for available liquidity. Remember, your tokens aren’t lost or going anywhere, there’s just the chance you have to wait a bit longer to get them if you don’t follow through on your withdrawal right away.
Oh, you’ve heard of the mysterious third option, rehypothecation? 🔮
Users can opt for rehypothecation and re-enter the vault if they’ve already burned their tokens and are in the AURA token queue. If a user chooses this option, they will exit the waiting queue and be given liquid LSD vault tokens. This ultimately allows users who need AURA right back right away to exit at their convenience via the liquidity pool (at the prevailing rate).
There are several benefits to using jAURA over other DeFi platforms:
- Automatic Yield: jAURA provides set and forget AURA yield. The auto-compounding feature eliminates the need to handle the complex backend strategies.
- Dual Token Model: jAURA employs a dual token model, allowing users to choose between a liquid wrapper or a locked position that maximizes yield upon deposit.
- Sticky Capital: jAURA rewards long-term capital and incentivizes users to hold their tokens for an extended period.
- Efficiency & Rewards: jAURA has a lower incentive than graviAURA, resulting in a higher effective yield relative to graviAURA. The 80/20 jAURA/AURA pool provides stronger capital efficiency than Badger’s 33/33/33 pool.
jAURA offers the best way to earn yield on their vlAURA holdings automatically. We’re very excited to be working with the Aura Finance and Redacted teams so closely on this vault and we can’t wait for the Jones community to start using it.
jAURA is yet another powerful tool that makes DeFi strategies simple for our users. If you have any questions about jAURA or what it unlocks, be sure to join our community on Discord.
None of this article is to be interpreted as financial advice.
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