[BIP-147] Enable RBN / USDC 50/50 Gauge [Ethereum]

BAL Gauges
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Summary:

Proposal to add a gauge for the RBN / USDC pool on Ethereum.

Ribbon Finance intends to mass migrate liquidity from the primary RBN-USDC Uniswap v2/v3 pools to the RBN/USDC 50/50 Balancer pool. If the gauge is added, the Ribbon DAO will provide 25,000 RBN bi-weekly as voting incentives for the first two months. Aura Finance will match any incentives provided by Ribbon to help bootstrap liquidity.

I propose that this gauge also be entered as a “core pool” under BIP-19 because this will be the primary on-chain RBN liquidity, Ribbon is heavily incentivizing, and the RBN circulating mcap is ~$100M. The pool will most likely be generating significant swap fees.

References/Useful links:

Link to:
• Website
• Documentation
• Github Page
• Communities

Protocol Description:

RBN is the governance token for the Ribbon Finance protocol. Ribbon is the first and largest DOV (decentralized options vaults) product. We make it easy to sell options on BTC, ETH, and alts. TVL is ~$60M. Similar to Balancer, Ribbon also has a ve mechanism in which holders can lock RBN to accrue protocol revenue from the options vaults.

Motivation:

The fees and volume are partially driven by Balancer’s automated voting weight for Core Pools from Balancer Improvement Proposal 19. Furthermore, if the LP is approved for a gauge and receiving automatic voting weight, liquidity providers can earn additional yield through Aura Finance’s ability to boost BAL emissions and supplement with AURA emissions too.

Voting incentives for Aura holders has hovered around 2x in capital efficiency (Source on Llama airforce) over the last month. Meaning, if RBN or other rewards were provided to help bootstrap the liquidity it would be more capital efficient than typical liquidity mining.

Specifications:

  1. Governance: Ribbon governance info can be seen here and their snapshot here. Ribbon Finance DAO multisig.

  2. Oracles: The protocol relies on chainlink oracles on BTC, ETH, AAVE, and other assets to calculate the spot prices when determining options payouts in the DOV’s.

  3. Audits: We have Ribbon V2 vaults audits:

  1. Centralization vectors: Protocol assets are not accessible by any entity by design. Options payouts to the users and market makers are wholly determined via smart contracts and use of chainlink oracles. Protocol uses keepers to roll options over on a weekly basis.

  2. Market History: RBN price. Balancer pool is recently launched.

  1. Value: This pool is intended to be the primary source of liquidity for the RBN token.
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This is a bit tricky since the issue Balancer announced last week has changed things significantly.

Goes without saying I’m in full support of the spirit of this proposal of course.

bbaUSD is no longer paying protocol fees (including not paying yield fee). To remedy this a migration will have to occur at some unknown time in the future. Putting this aside, the yield on bbaUSD is very small and that won’t likely change.

Because this will be the primary source of RBN liquidity I think it makes sense for this pool to participate in BIP-19 as a core pool, even in the absence of a yield fee. I’d suggest remaking this as RBN/USDC and simply going with that - safe bet this will see more volume than RBN/bbaUSD because it will be easier for arbitragers to see and trade with (plus easier for some aggregators).

This does break the precedent of only yield bearing pools being core pools but it’s kinda long past time the program was expanded beyond only yield pools. This will be the primary on-chain RBN liquidity, RBN is heavily incentivizing, plus RBN circulating mcap is $100M. I expect the pool should have no problem generating swap fees. Fully support granting core pool status.

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@solarcurve Edited the proposal!

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Multisig Payload PR:

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https://snapshot.org/#/balancer.eth/proposal/0x58a74223c1ea38048956969ff0cbaea2167f3a9ed69907a95187c6c222201149