Aera’s initial use case was as a treasury management solution for DAOs, but the flexibility of Aera’s configurable, non-custodial vaults has provided fertile ground for the emergence of other new and innovative use cases.

Recently, Puffer Finance and Swell, two of the largest liquid restaking protocols (dubbed LRTs as they issue liquid restaking tokens), have begun pioneering the use of Aera vaults within the restaking ecosystem, where they, as well as other LRTs and Operators, are facing the challenge of managing large inflows of restaking rewards they anticipate receiving in the form of native network tokens. One of their primary concerns? How to handle large, ongoing volumes of token conversions in the most capital-efficient way possible.

Aera vaults offer a simple, elegant solution to this problem.

What to Do With Restaking Rewards?

Restakers have deposited more than $12 billion into EigenLayer and Symbiotic, the two largest restaking protocols, according to DefiLlama. In theory, LRTs and Operators (i.e., node operators that are delegated restaked assets to deploy) will be looking to earn yield on that $12 billion by spreading it across the dozens of projects that reward restakers for help securing their decentralized networks (known as AVSs on EigenLayer and Networks on Symbiotic).

That’s millions worth of rewards flowing back to these LRTs and Operators, and any other ecosystem participants in a position to receive AVS or Network rewards. It’s expected a large amount of those rewards will arrive in the form of native network tokens.

This expectation has LRT and Operator teams considering questions like:

• Do they want to be long-term holders of every AVS/Network token they receive?

• Will the qualified custodians of our institutional restakers use support native tokens?

• Should they distribute a hodgepodge mix of these native tokens to their restakers?

• Should they converts all these native tokens to a base asset like WETH before distributing them?

• If they convert them, how will they manage converting large volumes of native tokens in such a way that minimizes slippage, doesn’t crash the native token’s price, but maximizes the value they receive?

Questions like these are what led Puffer Finance (behind the pufETH LRT) and Swell (behind rswETH and swBTC) to explore using Aera vaults to manage the flow of their restaking rewards, including automating the claim process; the conversion of native token rewards for base assets like WETH, WBTC or major liquid staking token; and the restaking of rewards for dual staking.

To understand how Aera enables this functionality, we need to explore Aera vaults in more depth.

The Aera Solution

Aera offers non-custodial vaults that can be configured to handle several automated operations while remaining highly responsive to real-time market conditions.

An Aera vault owner can select from a growing number of off-the-shelf treasury management strategies designed to help achieve various goals, such as optimizing yield via levered ETH staking or stablecoin lending, or providing dynamic liquidity provisioning for a protocol’s native token. The vault owner maintains an allowlist containing specific tokens and protocols with which the vault contract can interact. Actions like reallocations can be triggered by recommendations from a third-party “Guardian,” but are limited by the parameters set by the vault owner. (For a deep dive into how Aera works, visit our docs).

Back to restaking rewards. One of Aera’s off-the-shelf strategies is low-liquidity asset reallocation. This strategy was originally designed to enable DAOs to diversify their treasuries out of their native asset with minimal slippage and impact on the native asset’s market price.

By configuring Aera vaults with the low-liquidity asset reallocation strategy, Puffer and Swell can integrate such capabilities within their LRT infrastructure and automate the claim and sale of native AVS and Network token rewards in a capital-efficient way that minimizes slippage and price impact.

Here’s an illustrative diagram of the flow using EigenLayer as an example.

Aera’s Value Goes Beyond Restaking Rewards Management

Aera’s flexibility has the potential to provide utility within the restaking ecosystem beyond an LRT or Operator using an Aera vault to manage rewards. In fact, Swell plans to also use an Aera vault within its recently announced Bitcoin LRT to manage allocations of restaked assets across Networks on Symbiotic.

Anywhere in a system’s architecture where tokens must be managed in such a way to optimize for specific needs and goals, an Aera vault can help reduce the hassle and overhead.

Stay tuned for more as these additional use cases develop.

Set Up an Aera Vault for Your LRT

Aera vaults are shaping up to be a game-changer for managing restaking rewards within the DeFi ecosystem. With their configurable, autonomous, and non-custodial design, Aera vaults enable LRTs and Operators to minimize the complexity of managing restaking rewards while optimizing their portfolios of token holdings.

If you’re interested in learning more about how Aera vaults can provide a streamlined solution to efficiently and effectively manage your restaking rewards, please get in touch.