[SIP5.18] Aerodrome Metagovernance

[MasterMojo]

Overview

We propose acquiring a veAERO position of at least 100,000 veAERO (with a goal to reach 200,000 in veAERO by compounding rewards) to enable direct metagovernance on Aerodrome Finance. This allows the Lazy Summer DAO to consistently direct AERO emissions toward $SUMR liquidity pools, reducing reliance on external voter incentives while building Protocol Owned Liquidity (POL) through Flight School rewards and emissions.

The DAO will fund the acquisition primarily through purchasing discounted veAERO positions on Vexy.fi (typically 10-14% discount on locked value) and/or via open market purchases of AERO (followed by locking) if necessary. A 3/5 multisig wallet, managed by a small delegated team (MasterMojo, Sixty, and three Labs Co team members), will handle epoch-by-epoch voting, prioritizing $SUMR LP pools. The team will provide periodic transparency reports to the Lazy Summer DAO, while staying up to date with Aerodrome protocol developments, and will receive a stipend for continued maintenance and compounding of the veAERO position.

This approach complements or serves as a sustainable alternative to one-time ignition incentive spends, providing long-term control and yield on treasury assets. This approach has also been recommended by Aerodrome team members to accelerate sustainability.

RFC Link: https://forum.summer.fi/t/rfc-aerodrome-metagovernance/626

Motivation

The successful SIP to fund Aerodrome ignition incentives highlights the need for strong emissions support for $SUMR liquidity on Aerodrome at launch and beyond. While direct incentives can secure initial vote share, they represent a recurring or upfront cost in $SUMR without building lasting DAO-owned influence.

Acquiring veAERO enables metagovernance: the DAO directly controls meaningful voting power, ensuring consistent emissions to $SUMR pools without ongoing external bribes. Additionally:

• Flight School distributes bonus veAERO proportionally to qualifying holders (typically ~0.11–0.15 veAERO rewarded per veAERO held per 4-week flight, with potential protocol boosts). Recent data shows positions in the 100k–200k range earning 12,000–30,000+ bonus veAERO per flight (see Dune dashboard).

• These rewards can be compounded (relocked) to grow voting power over time or used to seed POL in $SUMR-AERO pools.

• Self-directed votes provide a sustainable “flywheel” for deep, efficient liquidity on Base.

Historical yields for max-lock (“Maxi”) veAERO holders have been highly competitive, as shown in this tracking query: https://dune.com/queries/5775166?sidebar=none

A modeling calculator further illustrates the veAERO position sizes needed to achieve yields equivalent to current top Relay APR benchmarks: https://www.desmos.com/calculator/hrxyv4arj1

These resources underscore the strong return potential and capital efficiency of a ~200k+ veAERO position. This creates a capital-efficient path to long-term liquidity strength and treasury yield.

Specification

1. Acquisition Target

   • Minimum: 100,000 veAERO position (200,000 was recommended by Aerodrome for consistent Flight School participation and impact; we will work towards this number).

   • Method:

     • Acquire existing locked veAERO positions via Vexy.fi marketplace at prevailing discounts (historically 10–35%, commonly 10–14% for mid-sized positions). This reduces the effective cost basis significantly.

     • OR Purchase AERO on the open market and lock for maximum duration (typically 4 years for max veAERO multiplier).

   • Funding Source: Lazy Summer DAO treasury (stablecoins or appropriate assets) and/or Summer Foundation. The exact amount of veAERO acquired depends on market conditions and the chosen acquisition method, with target cost-efficient execution.

2. Governance & Voting Operations

   • A 3/5 multisig wallet will hold and manage the veAERO position(s).

   • Signers: @MasterMojo, @Sixty, and three Labs Co team members (@chrisb, @halaprix, @jensei).

   • Mandate: Execute any/all necessary swap and bridge transactions to end up with $80,000 USDC on Base to purchase veAERO. Vote every epoch to direct maximum emissions to $SUMR liquidity pools/gauges.

   • Transparency: Monthly (or per-flight) on-chain and forum reports detailing votes cast, emissions received, Flight School rewards earned, and position status.

   • Compensation: Multisig signers receive a modest stipend for ongoing operations

3. Flight School Participation

   • Details available at: https://aerodrome.finance/flight-school

   • Weekly/flight tracking: https://dune.com/x_drome_analytics/veaero-rewards-program

   • Rewards earned will be treated as POL, prioritized for compounding voting power or seeding $SUMR liquidity.

4. Budget Request

   • $80,000 USD (~176,000 veAERO), from the Lazy Summer DAO Treasury. In the light of efficiency we hereby instruct the Lazy Summer Foundation to execute the following transactions:

     • transfer 8 ETH on Ethereum;

     • transfer 11,790 USDC on Arbitrum;

     • transfer 11,710 USDS on Ethereum;

     • transfer 11,410 USD₮0 on Arbitrum;

     • transfer 10,000 USDT on Ethereum

to `0x95e346c0c8405C0996bb3d5f51264c92345d68BC` (multisig) upon successful execution of this SIP.

• The onchain proposal will include execution of 4 transactions on Base network:

  • approve & transfer 7,360 USDC on Base

  • approve & transfer 4,010 EURC on Base.

> *Any unused funds will be returned back to the DAO treasury, upon the purchase of the veAERO tokens.*

• We are requesting a mandate from the DAO to include a monthly payment of ~$1,000 of SUMR per signer, paid as part of delegate rewards distribution on a monthly basis per signer (ex: at FDV of $250M (4,000 SUMR) . The abovementioned Labs Co team members has confirmed waiver of their stipend - therefore, the DAO spending will be 8,000 SUMR/month.

Risk Assessment

• Price Volatility: AERO price exposure on treasury assets. Mitigation: veAERO locking provides a yield buffer; long-term liquidity benefits are expected to outweigh.

• Lock-up Illiquidity: veAERO positions are time-locked. Mitigation: If the DAO ever wishes to exit or access liquidity, the position can be resold on the Vexy.fi secondary market.

• Alternatively, the veAERO can be used as collateral on 40 Acres Finance (https://40acres.finance/ | @40acres_Finance on X) for a self-repaying, non-liquidating, interest-free loan where weekly emissions and rewards automatically repay the borrowed stablecoins (typically USDC) while retaining full upside from the position. This provides meaningful exit flexibility and liquidity options despite the underlying lock-up.

• Operational Risk: Multisig centralization. Mitigation: 3/5 threshold with mixed community/core team signers; transparent reporting.

• Opportunity Cost: Capital deployed vs. other treasury uses. Mitigation: Expected Flight School yield (~50–60%+ annualized based on recent rates) plus emissions flywheel.

Voting
If YES - Approve transfer of $80,000 in treasury assets to a specified multisig, while giving authority to the Aerodrome Metagov team to acquire $80,000 worth of veAERO for direct metagovernance of SUMR/USDC pool on Aerodrome.

If NO - Do not transfer funds at this time; continue with further discussion.

Authors: @MasterMojo @Sixty

Reviewed by: @jensei

[jensei]

VOTE:

Tally | Lazy Summer DAO (Official) - V2 | SIP5.18: Aerodrome Metagovernance

[Sixty]

Updates on this SIP can be found in the following post:

Aerodrome Metagovernance - Transaprency Reporting Thread

[jensei]

thank you for creating this thread @Sixty! I have moved this thread into a working group, where it would make more sense in terms of category/sub-category on this forum.

[jensei]

Hello @Sixty @MasterMojo and @Recognized_Delegates. The original mandate under this SIP assumed a more active operational burden to establish the metagovernance process. Since then, execution has standardized significantly, at this stage it’s largely periodic voting + reward claiming (~every 10 days) & transparency reporting.

At the same time, Aerodrome Flight School rewards are not being awarded (due to acquiring locked veAERO on a secondary market - rather than locking AERO tokens ourselves; as well as incoming sunset of the programme), so the current compensation isn’t being offset as initially expected. Given this, I would propose proceeding with the March payment as planned but reducing compensation by ~50% starting April 2026. I think this will better reflect the current effort required while staying mindful of DAO budget efficiency. We can always revisit again if scope or workload meaningfully changes.

[Sixty]

Hey @jensei, I fully agree with the points raised. The most operationally intensive part of the initiative is done now, and the reduction in budget directed towards Aero metagovernance makes sense.