Aera
While writing this article, I experienced the comments coming to the proposal in Arbitrum DAO as if I were witnessing a parliamentary fight. Did I internalize it too much? The reason why the article took so long to come out was actually the tabs that were open for days and read repeatedly, not being able to decide where and with which topic to start, finally drawing an outline and trying to push the tabs to disappear again in half a day as a deadline, finally giving up and wanting to focus on a different, shorter and niche topic and at least publish that. And and and after a month.. finally, the article is here, enjoy reading.
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Projects that has yield-optimized stablecoins and DAOs ought to determine the treasury management of itself. While i was scanning the sources for protocol-owned-liquidity article, I have came across with Aera and wanted to mention about it in a complete other article.
Aera is a project of Gaunlet.xyz, so far, team achieved great milestones and below, I will be mentioning the logic, how Arbitrum DAO treasury management planned with Aera and so on.
Introducing Aera: Revolutionizing DAO Treasury Management
With billions of dollars sitting in DAO treasuries, managing these assets effectively isn’t just important—it’s essential. In today’s challenging market conditions, DAOs need to think smarter about how they handle their funds. This means using strategies like targeting risk-adjusted yields, keeping enough reserves to stay agile, improving liquidity for their native tokens, and steering clear of overly volatile assets.
Tools like DeepDAO show just how massive and intricate these treasuries can be, making it clear that DAOs need solutions that are not just advanced but also tailored to their unique needs and goals.
Aera, the world's first autonomous treasury management protocol for Decentralized Autonomous Organizations (DAOs), marks a pivotal moment in decentralized finance with its general availability launch. Backed by a successful $8 million token sale led by Bain Capital Crypto, Aera is designed by the team behind Gauntlet, a renowned firm specializing in DeFi economic risk management.
>>At its core, Aera empowers DAOs by offering noncustodial treasury management through secure "vaults" that maintain organizational control and flexibility. These vaults allow DAOs to define long-term strategic targets, such as risk-adjusted yield optimization, liquidity deepening, or asset diversification.
Why Aera Matters: Strategic Benefits for DAOs
Aera simplifies treasury management for crypto-native organizations with advanced features like continuous autonomous rebalancing, real-time performance dashboards, and customizable allow-lists for managing approved assets and protocols. These tools help DAOs achieve their financial objectives while maintaining full control over their assets, and the ability to withdraw funds without penalties provides essential operational flexibility. With over $4.3 million in DAO treasuries already managed, Aera demonstrates its value in optimizing idle assets, mitigating volatility, and enhancing liquidity—all with minimal governance overhead. As Tarun Chitra, CEO and co-founder of Gauntlet, highlights, “DAOs with clear focus and smart operations were the winners in the last market cycle, and Aera was built to enable focused and efficient treasury operations.”
This commitment to balancing complexity with responsibility sets Aera apart. DAOs can use the platform to autonomously manage treasury portfolios with minimal governance intervention, enabling them to respond swiftly to market conditions without the delays and inefficiencies of frequent voting.
Features of Aera:
Protocol-Owned Execution Strategy:
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Optimized with Off-Chain Logic: Monitors liquidity and plans buy-sell operations by modeling price impacts.
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Active and Passive Execution Strategies: Facilitates conversions by positioning ARB tokens in liquidity pools or through direct trading operations.
Automation and Adaptability:
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Aera Vault’s Adaptive Strategies: Tailored to meet the needs of the DAO. For example, ARB-USDC conversion is designed to minimize market impact.
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Dynamic Adjustments: The Vault adjusts transaction volumes based on liquidity and continuously updates parameters according to market conditions.
Innovation in Treasury Management:
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Customizable Vaults: Provides tailored vaults for stablecoins, DAO-owned tokens, and other crypto assets.
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Optimized Decisions: Vault parameters are optimized based on market conditions and aligned with the DAO's risk tolerance.
ARB to USDC Conversion Process
Aera Vault’s Operational Principles:
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Conversion Strategy:
>Speed and Efficiency: Converts ARB tokens to USDC within a maximum of one week.
>Liquidity Management: Transactions are executed using Odos (DEX aggregator) and Bebop (proprietary execution solution).
>Price Impact Modeling: Minimizes the likelihood of market price disruptions caused by transaction volumes.
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Data-Driven Decisions:
>Slippage Monitoring: Measures price slippage during and after transactions.
>Short and Medium-Term Price Impact Analysis: Assesses hourly and daily market effects of transactions, updating parameters when necessary.
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Payment Flow:
> Payouts via LlamaPay: After ARB is converted to USDC, regular payments are made to DAO members through LlamaPay. Payments are spread over six months, totaling 360,000 USDC.
>> Additionally, you can review the following illustration to better understand the Arbitrum treasury allocation
According to the proposal concluded in October 2024, the following can be said about the indispensable role of ADPC in Aera and Arbitrum processes:
The strategic procurement framework developed by ADPC for Arbitrum DAO aligns perfectly with Aera's features of automation and transparency in treasury management. The service providers whitelisted by ADPC are easily integrated with Aera Vaults, accelerating financial decision-making processes within the Arbitrum ecosystem.
By ADPC, we mean the Arbitrum DAO Procurement Committee, a committee established to transparently, efficiently, and strategically manage the service providers needed by projects in the Arbitrum ecosystem. The primary goal of ADPC is to enhance the DAO's operational efficiency by creating a procurement framework that provides predefined rules and cost advantages in critical service verticals like security. This framework aims to ensure the fair distribution and efficient use of the subsidy funds provided by the DAO for security services across ecosystem projects.
Strategic Procurement Framework:
The Strategic Procurement Framework developed by ADPC, a first in the industry, is a system that allows service providers (vendors) and buyers (project owners) to interact under a certain market order and pre-approved contract terms. This outline requires both buyers and sellers to comply with two main criteria:
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Legal Documents: These include conditions that all parties must adhere to throughout the process:
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Head Terms: Terms covering the conditions all parties are obligated to follow during the process.
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Work Order Terms: Specific conditions related to the service delivery.
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Mandatory Waivers: An additional layer of assurance requiring both parties to waive specific legal liabilities during the application process.
To Sum up and Last Words..
Strategic Advantages for Arbitrum DAO and Final Thoughts
Arbitrum DAO has taken a major leap forward in operational efficiency thanks to Aera’s automation and protocol-owned execution strategy. The Aera Vault made it possible to convert ARB tokens into $414,000 worth of USDC in just one week, all while keeping market impact to a minimum. By using advanced liquidity modeling and slippage forecasting, Arbitrum DAO was able to cut through bureaucratic hurdles, speeding up treasury management processes. For example, instead of running separate bidding rounds for crucial services like security audits or RPC providers, Aera’s "whitelist" solution allowed the DAO to quickly and seamlessly onboard key service providers. This not only saved time but also helped Arbitrum hit its strategic goals faster.
From a cost perspective, Aera’s tools for modeling price impacts and its execution strategies brought substantial savings, benefiting both the DAO and its ecosystem projects. During the ARB token conversion, platforms like Odos and Bebop optimized transactions while keeping slippage rates exceptionally low, ensuring the DAO’s resources were used effectively. On top of that, the combination of transparency, community involvement, and Aera Vault’s automation raised the bar for professionalism in fund management. Payments to DAO members have been structured over six months via LlamaPay, covering $360,000, with an additional $54,000 allocated for operational needs.
This partnership hasn’t just helped Arbitrum meet its immediate goals—it’s also set the stage for a bigger transition toward a more complex operational company (OpCo) model. By embracing innovation, Arbitrum and Aera have not only created a new benchmark within the DAO ecosystem but also provided a clear roadmap for other DAOs aiming to scale their operations effectively.
Since you've made it to the sources, you're either one of those who skim through quickly or, like me, you're genuinely curious about treasury and yield areas in the blockchain world. Keep doing what you believe in and love. :)
Remember: 1 is greater than 0 :)
with love, Mel
Sources
Even though it’s an older piece, and does not mentioned on this article, I’d like to include the link to Karpatkey's research, which I thoroughly analyzed and enjoyed reading during my studies: Karpatkey's Research
Illustration: Proposal on Tally
Explore Aera’s features in more detail:
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Treasury Management in DeFi: Low Liquidity Asset Diversification
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Driving Long-Term Protocol Growth Through Liquidity Mining and Protocol-Owned Liquidity (POL)
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Arbitrum's Rise as the Crypto Hub for Stablecoin Yields (Gauntlet)
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Results and Analysis: Arbitrum Liquidity Mining Program (Gauntlet)
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Arbitrum as a Crypto Hub for Stablecoin Yields (OneSafe Blog)
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Challenges in TVL Growth and Incentives on Arbitrum (OneSafe Blog)
Tally, why don’t you have any filter or search options for DAO proposals?
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Illustrations with Examples by Paul: ADPC Framework Forum Post
