Aera, a rewards-based treasury management system for decentralized autonomous organizations (DAO), is coming to Polygon to let projects leverage the power of on-chain finance.
For DAOs to achieve their goals, they need to adopt nimble and risk-aware approaches to treasury management and make the most of the tools made available by decentralized finance (DeFi). That’s particularly true during a market downturn, when the treasury fund is needed most even as its value drops.
Aera, which derives its name from the Latin word for Rome’s public treasury, helps projects increase capital efficiency, save on operating costs and minimize governance intervention. The protocol does this by aligning treasury management incentives in a decentralized way to reward profitable decisions and penalize those that result in losses. Here is how it works.
A DAO places a portion of its funds in an Aera vault, making the DAO a client protocol. Every rebalancing proposal in Aera requires funds at stake, and the results create a public track record for participants. A Vault Guardian is responsible for submitting the parameters that define the vault's asset allocation and bears financial risk by staking assets. Arbitrageurs execute the rebalancing by trading assets with the vault and are incentivized to continuously hit the vault’s target allocation as determined by the guardian.
Polygon offers a low-cost environment that allows for rapid iteration and experimentation while the network’s EVM compatibility will make it possible for Aera to become multichain in the future. Polygon’s thriving ecosystem, home to tens of thousands of decentralized apps, also includes key DeFi players like Balancer V2.
The partnership with Polygon will help raise awareness for DAO communities and potential Aera agents by educating marketing decision-makers and traders. The Aera team can also identify and fix potential gaps in infrastructure or tooling that would hinder participation.
Aera is still in the alpha stage of development, with one test vault funded and operated by Gauntlet. Beta participants and their guardians will have the chance to sign up in the first quarter of next year.
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