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Understanding jAURA

What is jAURA?

jAURA is an auto-compounding strategy on Ethereum Mainnet that allows depositors to earn yield on their AURA tokens. Over time, each jAURA token will become backed by more underlying vlAURA.
jAURA works by utilizing 3 separate protocols:
  • Aura Finance
  • Balancer
  • Redacted Cartel’s Hidden Hand.
These integrations allow users to collect yield automatically, without the hassle of having to sell tokens, lock positions, or vote in bribe rounds themselves.
The purpose of jAURA? Give Jonesies the easiest, most effective way to grow their AURA balance.

Structure of jAURA

Dual Vault System

jAURA consists of two vaults:
  1. 1.
    A non-tokenized auto compounder
  2. 2.
    A tokenized liquid staking derivative (LSD)
The non-tokenized auto compounder will have higher yield on average because it is not subject to liquidity incentives, but at the cost of no composability features.
The tokenized LSD will give you the receipt token jAURA once you have deposited. This vault is subject to liquidity incentives, which may lead to slightly lower yield than the non-tokenized strategy. However, jAURA tokens have the innate benefit of being fully composable.

Deposit Options

Upon deposit, a user will be prompted to choose between the two vault types:
  • Non-tokenized - Deposited tokens will be remain in the protocol for 2 week epochs
  • Tokenized - Will always remain liquid via liquidity pools.

Strategy Mechanisms

Rewards Collection & Distribution

Bribes
Thanks to Hidden Hand, the management of bribes have become automatic.
  • Users no longer have to deal with the hassle of deciding which protocol to delegate votes
  • The jAURA strategy will use Hidden Hand to best optimize bribes.
Every bribe round, the voting engine will optimize votes to achieve the maximum yield, sell any rewards collected except for AURA, and distribute tokens per the waterfall distribution system.
Here is the equation for determining bribe amounts (only applicable to wjAURA):
bribe=(pool/total)∗0.25bribe = (pool / total) * 0.25
Where:
bribe = The total bribe amount
pool = wjAURA in the pool
total = total wjAURA
Auto Compounding
Auto compounding is the main perk for AURA depositors using jAURA.
After the 2 weeks long bribe rounds occur, all rewards collected (including Balancer gauge rewards) are autocompounded to enhance returns to depositors.

Waterfall Distribution

Rewards will have a staggered system in place, with a hierarchy dictating their flow. All rewards recieved are immediately converted to AURA.
After rewards are collected, they are distributed in the following order:
  1. 1.
    Protocol incentives: A portion of the tokens accrued by the protocol will be distributed between the Jones treasury and Aura treasury. This guarantees both the sustainability of the jAURA strategy and the growth of the Aura ecosystem as a whole. For further details, check the "Incentives" section of this documentation.
  2. 2.
    Liquidity incentives: A portion of the tokens accrued by the protocol is then used as incentives for the liquidity pool through bribes on HiddenHand. This only affects the wjAURA users. The amount will be defined by the following equation: (LSD jAURA In Pool) / (Total LSD jAURA) * 25% = Reward Incentive
  3. 3.
    Withdrawal queue: If needed, any remaining tokens will be converted in AURA and fed into a unified queue for users who have previously requested withdrawal & burned their tokens. This step can be conditional based on withdrawal requests.
  4. 4.
    Vault yield: A portion of the tokens accrued by the protocol will be converted in AURA and accrued proportionally to users auto compounding positions and locked for more vlAURA.

Withdrawal Methods

Users will be able to withdraw using two different methods: 1. A liquidity pool swap at the prevailing market rate, at the time of their choosing
  • Only available for wjAURA.
2. A token burn
  • Available for both the jAURA Vault and the LSD wjAURA Vault.
The latter option will allow users to withdraw from the next epoch’s available liquid AURA inside of the vault, with one epoch being 2 weeks.
This system is on a first-come, first-serve basis.
Once a user burns their tokens, it is up to them to make sure they withdraw promptly, or they may have to wait until additional liquidity becomes available at the next unlock. This means a user could potentially face a prolonged period where they are not able to withdraw, despite having burned their tokens.

Rehypothecation

If a user has already burned their token and is in the waiting queue, a rehypothecation option can allow them to re-enter the vault again without having to wait to receive AURA tokens. If a user selects this option, they will exit the waiting queue and be given LSD Vault tokens.
They will then be able to exit via the LP pools immediately at the prevailing market rate. This mechanism will allow users who need to get their Aura back right away to exit at their convenience through the liquidity pool.
To avoid gaming the system from the act of moving from an illiquid token to a liquid one, a rehypothecation incentive will be charged that goes directly to the liquidity pool. This means that no user can abuse this mechanism in order to avoid the costs associated with the liquidity pool.