[BIP - 134] Enable BRZ-jBRL - bb-am-usd 50/50 Pool Gauge with a 2% cap (Polygon)

Hi all!

Summary:

Enable a Balancer gauge for the 2brl - bb-am-usd on Polygon.

Following our first proposal ([BIP - 133] Enable BRZ-jBRL Stable Pool Gauge with a 2% cap (Polygon)) and after the first feedback, I am also proposing another proposal to add a gauge to the 2brl-bb-am-usd pool as well. (2brl = name of the BRZ-jBRL Stable Pool).

BRZ and jBRL are both Brazilian Real stablecoins. BRZ is backed 1:1 by Brazilian Real (BRL) and issued by Transfero. jBRL is backed by various collateral types (BRZ, USDC, etc.).

Jarvis Network and Transfero co-write the proposal.

References/Useful links:

Jarvis Network:

Link to:

Transfero:

Link to:

Protocol Description:

Jarvis Network

Jarvis Network is an ecosystem of protocols and applications to bring decentralized finance to real use cases. Its first protocol, Synthereum, allows borrowing and exchanging synthetic fiat currencies (jFIATs) on multiple EVM-compatible networks.

The Synthereum protocol has four modules:

  • Liquidity Pools: exchange jFIATs back and forth for USD-stablecoins or other jFIATs without price impact at the Chainlink price feed.
  • Credit Lines: borrow jFIATs against various collateral types.
  • Wrappers: convert non-USD stablecoins for their jFIATs equivalent at a 1:1 ratio.
  • Printers: mint uncollateralized jFIATs for flash loans, seeding money markets, or liquidity pools.

Most jFIATs have a direct or indirect fiat on and off-ramp (Mt Pelerin, Suarmi, Monerium, PayTrie etc.), can be lent or borrowed on money markets (Midas), can be used for on-chain and off-chain payment (Request, Superfluid, Mt Pelerin) or for earning yield (Beefy).

Transfero

Transfero Group is an international financial solutions company based on blockchain technology in the Crypto Valley, Switzerland. Its objective is to connect emerging countries to the global market through a platform of financial solutions based on blockchain infrastructure, providing greater efficiency, flexibility, and access for people and businesses.

Transfero also developed BRZ, a stablecoin backed 1:1 by Brazilian real (BRL), to give South Americans a reliable asset to the blockchain industry. The BRZ token is live on Algorand, Binance Smart Chain, Ethereum, Solana, Polygon, and Stellar. BRZ was featured in a World Economic Forum panel in 2020.

BRZ is integrated with fiat on and off-ramp (BityPreco) and crypto-card solutions (Wirex) and can be borrowed and lent on money markets (Midas).

Motivation:

The role of this pool is to connect the 2brl pool, and therefore both jBRL and BRZ to the rest of the Balancer liquidity and to route all the “external” swaps through the bb-am-usd pool to increase its natural yield.

This will help us improve the capital efficiency of our whole “on-chain Forex infrastructure”, which is composed of our protocol (Liquidity Pools and Wrappers) and of all the secondary markets’ liquidity pools. The pool allows to do not have to launch a jBRL-USD and a BRZ-USD pool for example!

Eventually, this pool can bring us a step closer to the “real yield” narrative, since it will generate value for the LPs through multiple sources:

  • fees from the 2brl pool
  • fees and interest from the bb-am-usd pool
  • and of course fees from the jBRL <> USD and BRZ <> USD swaps

Additionally, we have deployed a WETH-jBRL pool, so multiple arbitrages will happen between all these pools.

A few notes:

  • This is our second proposal to add a gauge to pool containing jBRL and BRZ; we would prefer having two gauges for these two pools (the 2brl pool and the 2brl-bb-am-usd pool) to give LPs the chance to decide whether or not they want to have exposure to USD.
  • Jarvis LTD has started building a position in BAL and AURA. The Jarvis Network treasury (governed by the JRT token, which will soon be revamped using the ve-model, a new token called JARVIS, and an 80/20 JARVIS-ETH pool) is planning on building the same position.
  • Jarvis LTD and the Jarvis Network treasury will both supply liquidity in the Synthereum Liquidity Pool. They will use up to 50% of the fees generated through the Liquidity Pools to bribe veBAL voters (we have already done this successfully for a few months now on BNB Chain with Ellipsis / DotDot).
  • Moving forward, we will deploy a boosted pool using Midas whenever possible to avoid fragmenting the liquidity between AMM and money markets and earn higher real yield; this means that we may need to deploy two new gauges in the future, for a new 2brl boosted pool as well as a 2brl-boosted-bb-am-usd pool.
  • This proposal is the first of many, as Jarvis Network is moving all their liquidity pools from Curve (stable pools) and Uniswap/Sushiswap/Kyber (volatile pools) to Balancer.
  • Eventually, we have asked Midas to add the bb-am-usd BPT as collateral to borrow jBRL (an other jFIATs) against it: this would allow the Balancer LPs in this pool to borrow jBRL against it while earning staking rewards (Midas enables to deploy the LP token into staking contract), as well as adding the BPT of the 2brl and 2brl-bb-am-usd pools as collateral.
  • Jarvis will launch a JARVIS-ETH 80/20 pool (our new token) tans use it for our veJARVIS token, as well as a rLBP for our buy back module. We will also launch various smart pool consisting of many different currencies to launch some indexes.

Specifications:

  1. Governance:
  • Jarvis: no on-chain governance (vote via snapshot) and decisions are executed through a ⅝ multi-sig (only one team member in the signers).
    • Polygon: 0x2709fa6FA31BD336455d4F96DdFC505b3ACA5A68
    • Ethereum: 0x2CA74be68f0A0e053F030D143C1376806BaBEdc9
    • Gnosis Chain: 0xaE1026699f47B1fC572D65E1784b12c3A2574A25
    • BSC: 0x38329F26a075D53324EFd6e5F53869354Fa1cfBc
    • Avalanche: 0x2507A0d8E2aBe9464Ba2d9ddcA38A5ee5e60A434
    • Optimism: 0x40bd131fA9933D592344783E38f0c0F27767d9FA
  • Transfero: centralised entity.
  1. Oracles: jBRL uses BRLUSD Chainlink price feed; BRZ token does not have a price feed
  2. Audits:
  1. Centralizing vector: jBRL is mainly collateralized by USDC; BRZ is a fiat-backed stablecoin issued by a centralized entity.
  2. Market history: jBRL has been live since February 2022 (on the BNB Chain); it has traded a bit off its peg during the FTX crisis due to a too-high supply of jBRL on a money market vs. a too-low number of jBRL minted through the Liquidity Pool (the number of jBRL that you can sell in the Liquidity Pool = the number of jBRL that people has bought; so people borrow a lot of jBRLs from the Credit Line or which have been minted through the Printer, and sell them all through the Liquidity Pool, it can prevent other jBRL holders from selling jBRLs through the pool, preventing any arbitrages from happening). We have solved the issue by withdrawing jBRL from the money market, forcing users to repay their loans by buying jBRL from the Liquidity Pool. At the same time, BRZ had an issue with its peg because its primary off-chain market was on FTX, and the pool used a wrapped BRZ from Solana. Besides last week’s event, both stablecoins have maintained their peg since the pool launch (on the BNB). We have learned how to prevent these situations from happening again or fix them quickly. Two other rare cases can prevent users from buying jBRL from the Liquidity Pools (again leading to preventing arbitrages from happening), and we also know how to mitigate them (currently working on it as we speak).
  3. Value:
  • The 2brl-bb-am-usd pool will act as the main secondary liquidity source for BRZ and jBRL.
  • It will produce a higher natural yield for its LP since the 2brl is also a Balancer pool that act as the main route for arbitrages and the use cases mentioned above (on-chain liquidity, credit without FX risks, etc.).
  • It will be our first step toward moving our ecosystem to Balancer’s.

Contracts

  • 2brl Balancer Pool (Polygon): 0xE22483774bd8611bE2Ad2F4194078DaC9159F4bA (AMP 200 because both tokens are redeemable).
  • 2brl-bb-am-usd Balancer pool (Polygon): 0x4A0b73f0D13fF6d43e304a174697e3d5CFd310a4
  • jBRL token (Polygon): 0xf2f77FE7b8e66571E0fca7104c4d670BF1C8d722
  • jBRL (Polygon Synthereum Liquidity Pool): 0x30e97dc680ee97ff65b5188d34fb4ea20b38d710
  • BRZ token (Polygon): 0xf2f77FE7b8e66571E0fca7104c4d670BF1C8d722
  • 2brl-bb-am-usd Gauge: 0xE77239359CE4D445Fed27C17Da23B8024d35e456

Thanks for posting this proposal as suggested in the other proposal thread. If there are no objections I think you guys are ready for the next voting cycle on 15th of December.

1 Like

Awesome!

Is there a procedure to be added to the next voting cycle?

1 Like

Vote queued: https://snapshot.org/#/balancer.eth/proposal/0xe52f25650ecfe921e6c4ce474c4a1ef512075d8f0d967b6d88f76056b1f3d09e