Aera Pilot Thread

With the successful Compound vote, the funds have been successfully transferred in and the execution out of ZRX and BAT has commenced!

You can monitor the vault at

We will consolidate all updates and progress in this thread and we welcome questions from the community.

Some initial results:

The vault is currently valued at $500k, and 3.7% of the Vault holdings ($23.7k) has been moved into wstETH and USDc.

The wstETH is currently earning 4.06% yield

Note that the holdings for wstETH, wETH and USDC are currently in the allocation targeting the 15% portfolio volatility, but that the chart on the dashboard will take a few days to accurately show the volatility target (needs 15 days of data to generate)


Exciting to see this pilot program get off the ground! It’s nice to see reserves being diversified into a yield-bearing asset like wstETH.

I think this experiment opens up the discussion for how the DAO could optimize its other non-yield-bearing reserves. Specifically, stablecoins like USDC can provide decent returns if put to work in this high-rate environment. I notice the Aera vault has already diversified into a small amount USDC.

Curious if Aera or the community has thoughts on either moving the USDC into a yield-bearing venue like Compound v3 (cUSDCv3) or diversifying into other yield-bearing stables?


Hi Kevin, thanks for your feedback. Since the pilot is utilizing a portion of Compound’s reserves, reallocating the reserve funds in that manner may put them at risk in a way that Compound finds unacceptable. Generally speaking, though, Aera supports ERC4626-compatible sources of stablecoin yield, and we’re evaluating alternative yield sources.

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Hi folks, wanted to provide a quick update on the progress of the Aera pilot with Compound. Overall the pilot has been going well, the vault is currently valued at $780k up from an initial allocation of $500k. This is mostly due to a run up in price from ZRX.

As this has been happening we have been successfully selling out of ZRX, of which the vault is now holding $213k of USDC and $109k of wstETH. This is all while achieving <0.5% slippage and no market impact on the price of ZRX. Note though, the runup in price on ZRX and relatively flat onchain liquidity conditions will extend the time required to fully diversify out off ZRX.

We have been successfully targeting 15% volatility via our methodology. As a reminder we use 90-day historical vol as an estimator for future volatility and adjust weights of the vault accordingly to target the 15% level selected by the DAO.

We wanted to give a bit more context on volatility targeting and why its useful. Volatility Targeting can be thought of as an approach to balancing the treasury’s asset mix to avoid too much unpredictability.

The guardian regularly monitors how much the current portfolio’s value is going up or down. If the prices are fluctuating a lot (high volatility), it indicates higher risk. In response, the guardian might shift the allocation from ETH to stablecoins to reduce the overall risk.

Conversely, if the overall portfolio value is very stable and shows little change in value (low volatility), the guardian might take on a bit more risk by increasing the allocation to ETH, thereby creating a higher potential for growth (but also more price fluctuation).

The goal is keep the overall risk level of the portfolio in line with the treasury’s stated risk tolerance (a volatility of 15%). The guardian will dynamically adjust the allocations as market conditions change. This helps in managing the potential for both gains and losses in a controlled manner.

As described in the pilot, we are generating yield on the vault via wstETH, however, we are not generating yield on the USDC due to concerns we outlined in our initial post. However per @kevins comment above, we would be willing to explore depositing into compound v3 if there is broader community interest in doing so.

Lastly, onchain liquidity conditions for BAT are severely impaired, only allowing for around $300-$500 of BAT to be traded per day while still achieving the 0.5% slippage bound we initially set out. We are exploring alternative ways of diversifying out of the BAT token, including using milkman to leverage offchain liquidity. We will report back on the forums with next steps.

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Providing another update on the vault. Diversifcation of ZRX has been going well, while BAT continues to prove problematic due to onchain liquidity conditions. The vault is currently valued at 749k primarily due to a run up in ZRX.

We have continued to sell out of ZRX and BAT with <0.5% slippage and no measurable price impact. As a result the vault is currently holding only 7.7% of its total notional in ZRX, down from 44% in our last update! As a result the vault is now holding 55% USDC ($413k) 24% wstETH ($180k), 12% BAT ($91k) and 7.7% ZRX ($58k).

Volatility of the vault has creeped up over the past few weeks, and we expect the vault to continue allocating more into USDc to offset this.

We are continuing to explore integrating with offchain/onchain hybrids like Milkman to help get out of the BAT position and are in the process of exploring the implementation there.

Would be happy to hear any feedback, and feel free to take a look at the aera app itself for more details on the vault!

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Despite that i generally don’t like idea of playing with reserves, i’d say at the very least pilot looks like doing decent job of clearing reserves from tokens that aren’t really qualify for longterm holding by protocol.

It makes not much sence for me though, that usdc procured isn’t put back into protocol as cUSDCv3, as that would not only contribute to reserve growth but also contribute to growth of protocol itself by increasing available liquidity.

Aside of that, i would like to mention, that considering that you are doing pretty much daily transactions with low amounts <10000$ value, just the network fees create 0.5-1% fee, It might be reasonable to abstain from transacting at periods of gas fees of 50 and higher and possibly increase the amount of transaction with possibly higher slippage at a times of particulary low network fees. That is just a general observation, but maybe worth looking into when optimising your dca strategy.

Overall it is interesting to follow progress of your piliot so far, and i wish you all the best to prove it to be worthile for protocol.


Please correct me if I’m wrong about this @Aera, but the gas fees are not directly incurred by the vault. Since arbitrageurs are paying the gas fees, high gas fees would hurt the profitability of arbitrageurs and make rebalancing less frequent, which is the real cost to the vault.

Thanks for the feedback @Sirokko.
The idea of putting funds into cUSDCv3 has come up a few times, so good to hear some alignment there. We will temp check delegates and gauge appetite for this.

Re network costs; It’s a good callout, definitely a tradeoff for some of these low liquidity assets. As @kevin mentioned, Compound nor the Aera Vault is paying any of the gas/network costs for these transactions (the Guardian is), and so the Vault is not losing any value to gas costs. Once we have milkman integrated the vault should be able to transact more notional of these low liquidity assets.

BAT Update

Simple Summary

We are excited to provide an update on Compounds Aera vault. We’ve successfully diversified out of the remaining BAT tokens within the vault. This was facilitated by our integration with CoWSwap’s Milkman contract, which significantly increased our access to liquidity and improved the execution prices for our BAT holdings. This move was aimed at circumventing the liquidity conditions for BAT onchain by leveraging offchain liquidity solutions.

Operational Success

Using CoWSwap’s Milkman, Aera was able to execute BAT trades with favorable rates and low slippage.

Trade 1: 63.5% of the lot at 81bps slippage

Trade 2: 36.5% of the lot at 42bps slippage

A total of ~101,570 BAT was sold for 8.44 WETH

The total balance of BAT is now 0.

Impact on the Aera Vault

This successful transaction has diversified the vault, reducing exposure to BAT and aligning with the strategy to manage the proceeds within a volatility-targeted framework. The current composition of the vault reflects:

The vault can be viewed here for additional details:

Ongoing Operations

The Aera vault is now fully diversified and will continue to leverage the volatility targeting strategy initially configured, now with the addition of cUSDCv3. The Aera team is here to handle any additional vaults that need to be spun up or changes in the existing vaults. We’re excited about the Compound x Aera partnership, and we’ll continue to drive value through our vaults and strategies!

-Aera Team

cUSDCV3 Update

Simple Summary

Compound’s Aera vault previously held USDC, not using the USDC for any yield or liquidity provisioning. We have officially moved the USDC in the Aera vault to supply the cUSDCV3 pool.

By using the USDC in Compound, the vault now:

  1. Provides additional USDC liquidity to the Compound III ETH comet
  2. Generates yield on an otherwise idle asset in the vault

Operational Success

Aera Vault now reflects 100% of the USD holdings in cUSDCV3 and 0% of the holdings in USDC.

Impact on the Aera Vault

Switching to cUSDCV3 provides USDC borrowers additional liquidity while providing Compound Treasury with earnings on its’ USDC holdings.

Current Compound USDC rates are 11.9% APR

The “APY by Token” section does not yet reflect the cUSDCV3 yield. We’ll add this in as soon as possible so that you will be able to track both wstETH and cUSDCV3 yields.

Next steps the APY will show here in Aera:

The vault can be viewed here for additional details:

If you have any questions, don’t hesitate to reach out.

-Aera Team

Compound Community,

The Aera Team would like to provide a quick update on the current state of your Aera Vault. As of May 6, 2024, the vault is holding the following assets:

  • wstETH: $188,327 (22.6% of vault)
  • cUSDCv3: $645,457 (77.4% of vault)
  • USDC: $95.51 (0.01% of vault)
  • COMP: $0 (0% of vault)
  • ZRX: $0 (0% of vault)
  • BAT: $0 (0% of vault)
  • Total $833,879

In terms of volatility performance metrics:

  • Target Volatility: 15.00%
  • 90 Day Realized Volatility: 16.88%
  • 15 Day Realized Volatility: 11.81%
  • 5 Day Realized Volatility: 16.19%

The yield-bearing assets in the vault are currently are:

  • wstETH producing 2.93% APY
  • cUSDCv3 producing 6.94%

Please let us know if you have any questions or if there’s anything else we can assist with regarding the Aera Vault V2 or Compound treasury management. We appreciate your ongoing support and engagement.

You can view your vault here:

-Aera Team