Simple Summary

Lyra is in a unique position to grow its user base and boost awareness with Lyra Chain launching soon. As an OP Stack Chain, Lyra stands to benefit by engaging with protocols and users on the growing Base ecosystem. As part of this journey Lyra can leverage Aerodrome to bootstrap $LYRA token liquidity on Base.

Abstract

Aerodrome is the central trading and liquidity marketplace on Base. As a sister protocol of Velodrome - one of the largest protocols on Optimism by TVL and users - it can deliver a similar value proposition for Lyra by serving as its primary liquidity hub on the Base ecosystem.

Aerodrome streams $AERO emissions to liquidity pools based on weekly veAERO (vote-escrow AERO) votes. Lyra can use voter incentives (bribes) to attract veAERO votes and AERO emissions to build liquidity on Base in a capital-efficient way.

Motivation

Protocols incentivising on Aerodrome have been achieving an efficiency ratio of 2-3X. In other words, for every dollar in voter incentives, protocols are currently directing between $2-3 worth of AERO emissions towards their pools. Lyra can leverage this high efficiency to attract deep liquidity at a low cost.

Specification

1. Lyra will enable bridging of LYRA to Base and create a LYRA/WETH pool on Aerodrome
2. Lyra will deposit $2K worth of $LYRA tokens as weekly incentives for the LYRA/WETH pool
3. LYRA incentives will run for a period of 16 weeks
4. The Velodrome team will conduct a review at the end of the program and provide recommended optimizations to its strategy based on the performance of this pilot program and DAO priorities

Rationale

Deploying $2K in weekly incentives can allow Lyra to attract up to $1M of TVL at 22% APR for LYRA/WETH. This is about ⅔ of Lyra’s current liquidity on Optimism.

The effectiveness of the voting flywheel is highlighted by Lyra’s ability to sustain $1.5M TVL at 22% APR for its LYRA/WETH pool on Velodrome using Protocol Owned Votepower.

Test Cases

N/A

Copyright Waiver

Copyright and related rights waived via CC0