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Aera Finance: Institutional Report

3 min readResearch

Aera Finance: Institutional Report

Aera Finance: Abbreviated Introduction

As decentralized finance (DeFi) continues its growth trajectory, valued at over $42 billion in assets locked in smart contracts, it is reasonable to ask what primitives are needed to reach a multi-trillion-dollar market size. One increasingly common way to improve capital efficiency in on-chain protocols is to have insurance funds that cover deemed shortfall events. Aave and Synthetix, for example, rely on these stake-based insurance funds to ensure that borrowing or trading risky assets are safe for capital providers. However, in times of extreme duress, these treasury reserve funds are likely to run into failure conditions as they have to cover their liabilities in a depreciating asset (e.g., the native governance token).

Aera Finance is a mechanism that offers decentralized autonomous, risk-aware treasury management to decentralized treasury reserve funds. It allows treasury reserve funds to automatically decorrelate assets utilized to pay insurance liabilities from the protocol’s native token.

The protocol is claimed to have automatic rebalancing, which allows the treasury to be managed efficiently in both bull and bear markets. This feature allows for the timely management of the portfolio.

Aera’s terms are governed by the laws of the State of New York, which is the first state to instate a temporary two-year moratorium on some cryptocurrency mining operations.

Gauntlet, the project’s parent company, has achieved unicorn status after having secured a series B funding round. Aera has an impressive team of experts with backgrounds in top universities and companies. A notable list of advisors further supports the team.

Currently, the project is in the alpha stage of development. A key goal is to implement a complete staking system.


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