# balFactor: incentivizing BAL liquidity on Balancer

**URL:** <https://forum.balancer.fi/t/balfactor-incentivizing-bal-liquidity-on-balancer/102>\
**Category:** Liquidity Mining \[deprecated\]\
**Created:** [July 17, 2020, 7:13pm UTC](https://forum.balancer.fi/t/balfactor-incentivizing-bal-liquidity-on-balancer/102 "2020-07-17T19:13:13Z")\
**Posts on this page:** 1\
**Showing post:** 4

<div class="post-metadata">

**Author:** ![followthechain](https://yyz1.discourse-cdn.com/flex027/user_avatar/forum.balancer.fi/followthechain/32/17_2.png) [@followthechain](https://forum.balancer.fi/u/followthechain)\
**Post date:** [July 27, 2020, 8:25pm UTC](https://forum.balancer.fi/t/balfactor-incentivizing-bal-liquidity-on-balancer/102/4 "2020-07-27T20:25:15Z")

</div>

This is an amendment to the balFactor proposal, in an attempt to specify how to calculate this factor.

Throughout discussions on Discord and the original post for this proposal, the spirit of the balFactor was to increase in 50% (by applying a 1.5 factor) the adjusted liquidity of the _pairs_ in which BAL is included. So for instance a 50/50 BAL/WETH pool would have:  
`adjusted_liquidity = actual_liquidity * all_other_factors * 1.5`.

> [@followthechain](#):
>
> apply a `balFactor = 1.5` to the liquidity of every “useful BAL pair”

> [@followthechain](#):
>
> a balFactor of 1.5 is applied to every pair of type `{BAL & uncapped_token}`

Unfortunately, upon closer inspection this simple rule revealed itself a bit too vague.

For instance, it would be clearly unfair if these pools got the same 1.5 balFactor:

- a `50/50 BAL/WETH` and a `10/90 BAL/WETH`;
- a `90/10 BAL/WETH` and a `10/90 BAL/WETH`;
- a `25/25/25/25 BAL/WETH/cappedTokenA/cappedTokenB` and a `25/25/25/25 BAL/WETH/DAI/WBTC`.

It then became clear what we need is just a modification on the calculation of the ratioFactor, in which it gets applied a balFactor proportional to the weight of BAL in  
each pair of the pool, so that the `newRatioFactor` (that is, `balFactor * ratioFactor`) of a 50/50 BAL/WETH would go from 1 to 1.5.

The solution proposed by @rabmarut to achieve this result is to have a `balMultiplier = 2` applied _only to the BAL side of the pair_ during the ratioFactor calculation. Code by @mike available at [https://github.com/balancer-labs/bal-mining-scripts/blob/master/index.js#L32-L91](https://github.com/balancer-labs/bal-mining-scripts/blob/master/index.js#L32-L91)

 ![image](https://canada1.discourse-cdn.com/flex027/uploads/balancer/original/1X/ac6d63c86a9401bf68e47bf9a19d5fa41b1d3045.png)

Some examples of results in the format  
`[tokens] | [weights] : ratioFactor => newRatioFactor`:

```auto
['WETH', 'USDC', 'BAL', 'ABC', 'BCD', 'CDE', 'DEF', 'EFG'] | [0.125, 0.125, 0.125, 0.125, 0.125, 0.125, 0.125, 0.125] : 1.00 => 1.04
['WETH', 'USDC', 'BAL'] | [0.49, 0.49, 0.02] : 0.94 => 0.94
['WETH', 'BAL'] | [0.8, 0.2] : 0.64 => 0.77
['WETH', 'BAL'] | [0.7, 0.3] : 0.84 => 1.09
['WETH', 'BAL'] | [0.6, 0.4] : 0.96 => 1.34
['WETH', 'BAL'] | [0.5, 0.5] : 1.00 => 1.50
['WETH', 'BAL'] | [0.49, 0.51] : 1.00 => 1.51
['WETH', 'BAL'] | [0.48, 0.52] : 1.00 => 1.52
['WETH', 'BAL'] | [0.47, 0.53] : 1.00 => 1.52
['WETH', 'BAL'] | [0.46, 0.54] : 0.99 => 1.53
['WETH', 'BAL'] | [0.45, 0.55] : 0.99 => 1.53
['WETH', 'BAL'] | [0.44, 0.56] : 0.99 => 1.54
['WETH', 'BAL'] | [0.43, 0.57] : 0.98 => 1.54
['WETH', 'BAL'] | [0.42, 0.58] : 0.97 => 1.54
['WETH', 'BAL'] | [0.41, 0.59] : 0.97 => 1.54
['WETH', 'BAL'] | [0.4, 0.6] : 0.96 => 1.54
['WETH', 'BAL'] | [0.39, 0.61] : 0.95 => 1.53
['WETH', 'BAL'] | [0.38, 0.62] : 0.94 => 1.53
['WETH', 'BAL'] | [0.37, 0.63] : 0.93 => 1.52
['WETH', 'BAL'] | [0.36, 0.64] : 0.92 => 1.51
['WETH', 'BAL'] | [0.35, 0.65] : 0.91 => 1.50
['WETH', 'BAL'] | [0.34, 0.66] : 0.90 => 1.49
['WETH', 'BAL'] | [0.33, 0.67] : 0.88 => 1.48
['WETH', 'BAL'] | [0.32, 0.68] : 0.87 => 1.46
['WETH', 'BAL'] | [0.31, 0.69] : 0.86 => 1.45
['WETH', 'BAL'] | [0.3, 0.7] : 0.84 => 1.43
['WETH', 'BAL'] | [0.2, 0.8] : 0.64 => 1.15

```

For the 2-tokens pool of type BAL/uncappedToken, this is the effect of the `newRatioFactor` as a function of BAL weight:

 ![image](https://canada1.discourse-cdn.com/flex027/uploads/balancer/original/1X/29d14a1f50c0ab4c7b77f5c210a75bba24eb543b.png)

Finally, the community members discussing the matter widely agreed this method did not insert unwanted complexity, and the results yielded were very well aligned with the spirit of the original proposal.

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_[View the full topic](https://forum.balancer.fi/t/balfactor-incentivizing-bal-liquidity-on-balancer/102)._