Summary
January was another strong month for biz dev and partnership activity as we focused on accelerating the initial progress of v3 from December and began turning our attention to v3’s L2 expansion.
For reference, the BDSP funding proposal and associated initiatives can be found here.
Initiative 1: Foster the Growth of the Balancer v2 Protocol
- Liquidity: As mentioned, while the general focus continues to shift towards v3, there were still instances where deploying on v2 made sense for certain partners (e.g. v3 not live on L2s yet). While there were multiple, one such example of a new v2 pool on Arbitrum in January was sUSDx / USDx which reached a monthly high of $14m in TVL and was one of the top fee generating pools for Balancer in January.
- Partnerships: Our pipeline from v2 is extremely strong and we are steering those conversations towards v3. There’s too many to list from January but it ranges from defi protocols, new chains, lending markets, yield vault strategy platforms, AIFI projects, and more.
- New metas: As a continuation of the BTCfi push on Mode, Balancer’s TVL of BTCfi assets hit a monthly high of ~$40m in January, up from $28m in December. We also started making a push into AIFI to explore how Balancer can potentially tap into this opportunity.
Initiative 2: Support and Execute the Launch of Balancer v3
- Launch Preparation:
- While mainnet and Gnosis launched in December, we prioritized getting things ready for Base and Arbitrum including working with the Arbitrum Foundation to author this BIP requesting v3 on ARB.
- We have also coordinated tightly with the Base and Arbitrum teams to ensure amplification of marketing announcements once promotion begin for the new chains
- We have several pools on Base and Arbitrum ready for launch including multiple AAVE boosted pools on both chains and sUSDS / seamlessUSDC on Base leveraging Morpho.
- We also have several other pools lined up once the liquidity router and stablesurge hook are deployed in February. These pools will be the first adopters of these new Balancer features.
- In coordination with the Maxis and the Morpho team, we prepped new partners to onboard to Morpho v1.1 vs. Morpho v1.0 given better compatibility with boosted pools on v1.1.
- Initial Liquidity and Boosted Pools:
- At launch in December, v3 had ~8k ETH of TVL. By the end of January, this increased to 12k ETH, a ~50% increase. Source
- As you can see here, the new Coinshift and Mellow pools were major drivers of the growth.
- As of writing there were 31 boosted pools on v3. V3 itself has generated $100m in incremental volume during January vs. December, and $135m total as of writing.
- We are onboarding other lending markets such as Euler and Seamless with a handful of others in various stages of diligence.
- Dinero shifted their incentives from their v2 pool to the v3 pool
- Additionally, the BDSP collaborated with multiple partners to apply for the 7500 eth Arbitrum Treasury RFP in an attempt to partner with Arbitrum for depositing into v3 pools (and v2 pools as a fallback)
- Application 1 = AAVE + Treehouse + Etherfi
- Application 2 = AAVE + Lido
- Application 3 = Rocketpool (with AAVE-wETH)
- Incentive Strategy: An incentive strategy has been crafted for new and existing chains using a combo of USDC and BAL/AURA. Gauges for Base / ARB initial pools are being wired up the week of Feb 10th.
- Pipeline Development: Our pipeline is robust across protocols, lending markets, risk curators, and chains ranging in the dozens of potential high impact partners. There are too many to list but we are actively working through the pipeline to onboard as many as possible. We are also developing meaningful relationships with various risk curators such as Gauntlet, Steakhouse, Apostro, re7, Block Analitica, etc. We expect L2s to capture meaningful share given lower gas causes less friction with boosted pools and has other advantages.
- Aggregator Integrations: All aggregators have been made aware of v3 launching on Base and Arbitrum in advance of our full deployment. Aggregators have been given info on the initial pools as well as potential estimates of scope / size to encourage integration. Of course the real credit for actually getting things integrated goes to BLabs.
Initiative 3: Partner Support
As mentioned previously, this continues to be a competitive differentiator for Balancer. With @zendragon heavy involvement, the BDSP and Maxis continue to exceed expectations with supporting partners across a variety of needs and do so in an expedient manner. This is also manifesting with the growth of v3 and opportunities coming our way given the relationships and responsiveness we’ve realized due to our partner support efforts.
Financial Breakdown
Discretionary Spending: $0 (budget is $4k total for the 6-month funding period)
USDC: $12,000 per month (same as budget)
BAL: 1,462 per month (same as budget)
Conclusion
January was another foundational month as we continued the adoption of Balancer v3 and set ourselves up for L2 expansion. With the release of new features (stablesurge hook, liquidity router, etc.) and presence on new chains, the BDSP is looking forward to continuing to capture opportunity in February.