Now that the governance vote on Moonwell Apollo to kick off an Aera pilot has passed, we will provide regular updates going forward using this thread as a continuation of our prior proposal thread.
For our first update we would like to share that we have successfully funded the Aera Vault! We carried out the steps as described here. To repeat for clarity we:
Now that the vault is funded we will now be submitting weights against the vault on a daily basis. In the next couple of days we will be releasing a dashboard for the community to monitor and see key statistics on the vault.
Here is a sneak peek of the dashboard from the funds that were just deposited into the vault:
We want to give the community a sense of how the vault is performing relative to alternatives, specifically a vault of all WETH and a vault of all USDC. We visualize the performance relative to these vaults below:
Next you will see the ongoing execution costs that the vault experiences as a result of maintaining the portfolio weights, specifically the arbitrage loss/gain from keeping the vault in line with the weights Gauntlet is setting against the vault on a daily basis. Note that lower is better, but that Arbitrage is important to the ongoing functioning of the vault.
Lastly we include a chart of the vault weights over time and all the transactions that have been executed against the vault. The most common transaction you will see here is updateWeightsGradually, which is simply Gauntlet’s daily weight update executed in order to target the 15% volatility.
It has been about 2 weeks since the Aera vault kicked off and wanted to provide a quick update. The vault has been operating normally for the past 2 weeks and Gauntlet has been successfully submitting weights to the vault every day since. As a reminder you can see the dashboard at https://app.aera.finance/137/vault/v1/0x3c14801DC6402E0560D69083F2b238b4C4b4DAfe
The vault is currently valued at $250,433, and is in a distribution of 69.65% USDC and 30.34% WETH.
Note that while the realized volatility chart is showing that volatility is lower than the target, this is due to not having a clean 15 day data set for the chart, rather than the volatility actually increasing. As such while it looks like volatility has been increasing up to the 15% mark, the initial allocation of 71% USDC 29% ETH already targeted this volatility level. This chart will have a full 15d window in the next few days.
Over the past few weeks ETH has swung in price and you can see below that the Aera vault weathered the downturn better than a portfolio of all ETH. Now the vault is up above the initial amount of $250k.
As you can see these price swings are reflected by the higher and increasing volatiltiy of ETH, on the flipside the Aera vault has successfully targeted 15% Volatility target decided by the DAO. Currently the volatility is at 14.6%.
Thank you for the comprehensive update on the vault’s performance. It’s reassuring to see that it has managed to stay resilient during the recent fluctuations in ETH price.
Giving another round of updates on the Aera vault for Moonwell Apollo DAO. The vault is currently valued
at $251k and is sitting on a distribution of 65.2% USDC and 34.8% WETH. As a reminder, the USDC sitting in the Aera vault is USDC on polygon and not USDC.multi. As such the Aera vault was not exposed to any price deviation of USDC resulting from the Multichain breakdown.
Volatility has similarly remained around the target level of 15% and Gauntlet has successfully submitted weight updates on a daily basis over the course of the pilot.
Hi, seems the balance of the vault 0x3c14801DC6402E0560D69083F2b238b4C4b4DAfe has been static. It only calls updateWeightsGradually while not executing any on-chain transaction. Wonder if my understanding is correct.
Thanks for the question @MoonWellHolder! Your understanding is correct in that the Guardian only calls updateWeightsGradually. This is the mechanism by which the vault rebalances to the target weights.
This initial version of Aera is built on top of a Balancer Managed Pool, it holds a portion of the assets in wETH and USDC. That proportion is defined by the Vault weights (currently sitting at 60.5% USDC/39.5% ETH). The Guardian changes the vault weights on a daily basis (by calling updateWeightsGradually). This slowly moves the weights to the target specified by the Guardian. What is happening as part of normal market activity is that Arbitrageurs are trading against the vault to rebalance it to the target weights specified by the Guardian. This is akin to to how a Uniswap V2 pool relies on arbitrageurs to keep the pool in line with market prices.
What you don’t see on the app, are the swaps that are getting routed into this balancer pool either by arbitrageurs or other market participants that are actually rebalancing or trading through the vault. This is all happening under the hood and is the mechanism that lets the vault achieve the 15% Volatility Target specified by the Moonwell Apollo DAO. The Vault value is largely flat due to the price of ETH remaining flat over the past 3 months, however the vault has moved from 70/30 USDC/ETH to 60.5/39.5 USDC/ETH.
Appreciate the question! Please let me know if you have any others.
Here is an example arbitrage transaction that routes through our vault.
Bear in mind - Balancer uses a shared pool for all its assets and just routes through the relevant pools to help save on gas. This means that parsing out our pool is a little tough to immediately see via logs, but I will walk through how you can find it.
We wanted to confirm Aera is not affected by this vulnerability. The Balancer team has confirmed that our pool is not affected. We will keep a close eye on the situation.
Another round of updates on the Aera vault for Moonwell Apollo DAO. The vault is currently valued
at $242k and is sitting on a distribution of 64.9% USDC and 35.1% WETH.
As a reminder, the USDC sitting in the Aera vault is USDC on polygon and not USDC.multi. As such the Aera vault was not exposed to any price deviation of USDC resulting from the Multichain breakdown. The vault has weathered the recent eth volatility + drawdown well and is worth more than a portfolio of all ETH (as indicated by the black line).
There has been a drawdown in ETH liquidity over the month of September, and is still currently greater than a portfolio of all ETH (as indicated by the black line)
The vault value is approximately the same as a vault of all USDC or all ETH (slightly over-performing all ETH, and slightly under-performing all USDC).
In January we will be posting in the forums about migrating the vault to our V2 version of Aera which enables the vault to access yield bearing instruments and express more robust strategies. Stay tuned for that forum post.
As always, feel free to reach to reach out with any questions!
It’s great to see that Moonwell’s Aera vault was able to capture some of the upside from the recent market rally. Very hyped for a potential Aera v2 migration in 2024!
