Hey everyone!
I’m Daniel, the lead dev working on Beethoven X. It is truly humbling and inspiring to be considered in these conversations. We continue to be extremely motivated to execute on our vision of making Balancer V2 the premier DEX and source of liquidity on Fantom.
First of all, I would like to preface this entire discussion with the statement that the Beethoven X team has and will continue to pursue a partnership with the Balancer community for as long as it’s an option.
Followthechain presented a very well thought out proposal around how BAL governance can engage with “Friendly Forks” now and into the future, but we would like to present an alternative path that is modeled around the experience we’ve had until now.
A bit of backstory to provide some initial context:
- Upon announcing our soft launch, Fernando reached out to us on Twitter and started a very friendly and open conversation around what our plans were.
- Immediately after, Fernando introduced several Ballers to the conversation so that our two communities could start to get to know each other.
- In the initial conversations, the idea was mentioned to us that if we were successful, there might be an opportunity for a BAL governance vote that could identify us as the “official fork” on Fantom.
- In the following weeks, the Ballers provided invaluable input around tokenomics, community, and many other topics.
We believe that this hands off approach provided us with enough guidance to ensure that our general construction would allow for a BAL governance vote, if that day ever came. Additionally, it created an opportunity for both sides to get to know each other. More specifically, the Ballers had time to evaluate if we were a team that was competent and capable of executing on our vision. From our side, it has provided us with the space to show that we are serious about the project and are capable of achieving some form of success without an official endorsement from BAL governance.
These points could form the basis of a strategy on how to engage with current and future forks that we believe would allow BAL governance to better identify and support teams with the highest chance of success.
Ideas on how to engage with “Friendly Forks”
- Produce a general set of guidelines that every team must abide by to be eligible for a future BAL governance vote (Expansion of this in the next section).
- Provide a mechanism for forking teams to identify themselves to the community early, ideally prior to launching a token.
- If the team has met the general guidelines, allow Ballers to volunteer to be unofficial advisors in the early stages of the project.
- Allow the forking team a period of time to succeed or fail on their own. Every side chain has its own independent community and ecosystem. For the long term success of the protocol, it is incredibly important that the team is either part of the community or is able to successfully integrate into it. We are of the opinion that it is much better that the community on the host chain decides which fork to support, not BAL governance.
- Only if the forking team has achieved some sort of traction, either through predetermined KPIs or general consensus, would they be eligible to submit a proposal to be recognized as the official fork on the chain.
Although this path would require more effort from the side of the Balancer community, we strongly believe that it would produce significantly better outcomes. In this way, BAL governance is not enforcing their opinion on a chain where they might not understand the intricacies of the community, instead they allow the market and host community to decide which, if any, fork to support.
We can speak from personal experience when saying that it is not an easy task to successfully launch the Balancer V2 protocol on another chain. The sheer difficulty serves as a barrier to entry that immediately eliminates most teams that would act in bad faith. We would suggest that you allow those teams the opportunity to prove that they have the capacity to achieve traction on their host chain prior to officially supporting them.
Ideas on general guidelines that every team must abide by
- Teams should adhere to some loose code of conduct that is in line with the core values of the Balancer community.
- We 100% Agree that all Balancer V2 core contracts should be deployed without any changes.
- A diff check could be performed to ensure the integrity of the deployment
- The Balancer community or Balancer Labs could do an overview of security measures put in place to ensure the safety of the protocol.
Tokenomics
The topic of token, tokenomics, and token distribution is, of course, the most difficult. Below are just a few of our opinions and ideas around how a partnership could look like that could benefit both communities in the long run.
- BAL governance should issue broad guidelines on tokenomics that the forking project needs to adhere to even be considered as an approved fork. The guidelines should allow for some degree of flexibility and creativity by the implementing team.
- A token treasury exchange for aligned incentives. This makes significantly more sense for projects that have already proven that they can achieve some sort of success without an official endorsement from Balancer. The contribution from the forking team would obviously be substantially more, but some amount of BAL tokens contributed to the treasury of the fork project would help align the communities around shared success.
- Tokens should be vested on both sides, with a clause that in the instance that the approval is revoked within a certain period of time, the tokens are returned to their respective treasuries.
- In the proposal from followthechain, BAL treasury tokens would unlock after 6 months, but team funds have a 1 year cliff. We believe this creates an undesirable and dangerous setup for any forking team. On one hand, with no team tokens unlocked for a year, any forking team would need a minimum of 12 months runway to even attempt spinning up a project. It would be reasonably challenging for a team to continue to scale to meet the demands of building a sustainable project without access to some amount of team tokens. Additionally, having such a large amount of a project’s tokens unlocked and in the control of the BAL treasury poses a risk to any potential investor interested in participating in the project.
- Incentivized BAL pools on the forking platform could serve as a mechanism for token distribution in addition to a standard airdrop. This would provide additional opportunities for BAL holders to earn yield with their existing assets as well as prevent the usual dumps that happen from large amounts of tokens being released into the supply.
We feel the overall numbers presented by followthechain are on the higher end, but we obviously have a very strong bias there, so we’re not entirely sure it’s our place to comment on it. For us, we would want to ensure that any program introduced represented both the Beethoven X community on Fantom as well as the Balancer community.
Once again, we’re incredibly honored to be included in these discussions and hope that we can continue to work towards some sort of collaboration between the Balancer and Beethoven X communities.