Aurora

A Decentralized Financial
Institution Utilizing Distributed
Computing and the Ethereum Network

Aurora is a collection of Ethereum applications and protocols that together create a decentralized banking and finance platform. Inspired by free banking, Aurora provides customers with an advanced, open, and stable financial network available to anyone in the world regardless of geographic location or class status. Aurora’s own stable currency, the boreal, is backed by a combination of cryptocurrency reserves and debt, and is available to customers via loans based on their digital economic reputation. Traders on IDEX, the network’s decentralized smart contract exchange, can utilize the boreal as payment for trading fees or as a stable base currency.

A decentralized bank is revolutionary in part because it’s the first example of a financial system that exists outside of the traditional market and credit system. However, this same power also increases the threat of loan defaults from customers. We expect that at first it will be difficult to accurately gauge who is worthy of loans, but as the system grows and on chain identity tools advance, Decentralized Capital will see a steady decline in the default rate. To keep the bank truly decentralized and open to customers from anywhere in the world, it is crucial that the bank has additional revenue sources to offset and weather any unexpected string of loan defaults. This additional revenue source will be generated by IDEX.

AURA Token
IDEX will be the first exchange to operate on the Snowglobe network, transitioning from a semidecentralized to a fully decentralized exchange. All fees from IDEX are remitted to the Aurora reserves. As the reserves grow Aurora can increase the value of outstanding loans, generating additional revenue for the Aurora network. Fees from the Aurora banking system will then flow back to those who stake the AURA token and provide the economic foundation that holds Aurora and Snowglobe together. Similar to other blockchain networks, Snowglobe requires a well-designed incentive structure to ensure that the integrity of the order book and transaction sequence are not compromised. Aurora has its own native network token, AURA, that aligns the interests of Aurora and the Snowglobe operators. All of the revenue from Aurora is used to compensate those who stake their AURA and provide security for the Snowglobe network. AURA staking aligns the economic interests of the operators with the health of the network, and makes it extremely costly for any would be attacker to disrupt operations. Prior to the launch of Snowglobe, all revenue from IDEX will be deposited into the boreal reserves. This revenue will be collected for future use in aligning economic incentives with AURA holders after the Snowglobe protocol is live. In the event that there is not enough revenue from Aurora to provide sufficient security for the platform, fees from IDEX may be used directly to enforce security in the system, bypassing the remittance to Aurora reserves.

Supplemental Information