Proposal to Launch Arbitrum Aura Fed

Forum: https://forum.inverse.finance/t/launch-arbiaura-fed/274

Summary

This proposal aims to launch the ArbiAura Fed, an AMM DOLA Fed that will be connected to the new DOLA/USDC Balancer pool on Arbirum, with the LP token staked on Aura. This liquidity will earn AURA, BAL and ARB rewards.

Background

The Fed Chair currently operates AMM Fed’s on Convex and Aura on Ethereum, and Velodrome on Optimism. These Feds can expand (and then contract) DOLAs directly into AMM liquidity pools, allowing for quick response to shifts in DOLA demand. Please read our docs for more information about AMM Feds.

Objective

This proposal seeks to launch an AMM Fed on Arbitrum Balancer. While DOLA has been on Balancer for the majority of 2023, it has struggled so far to maintain deep liquidity on a DEX. With the launch of Aura on Arbitrum, the opportunity arose to launch a cross-chain fed, just like Velo Fed, farming on this new deployment. This will allow the DAO to build very deep, sticky DOLA liquidity on Arbitrum, which will be important in the instance of a future deployment of the FiRM protocol to Arbitrum L2. In addition to this, the expectation is that with ARB rewards also being farmed, the vote incentivization efficiency will be high, allowing for rewards to be recycled to susbsidize future liquidity costs.