[BIP-159] Activate BAL Emissions for Mainnet EURS:USDC “FX Pool” w/2% emissions cap

Thanks for the good and thoughtful questions/responses @solarcurve @Tritium , this is helpful for all of us.

Yes, we could very easily set that 50% revenue share right now. We’ll be back in a matter of day(s) for both pools with a transaction showing that the Balancer fee collector address is now the set recipient of that %. I suppose after that, then we can proceed with a vote for this EURS:USDC gauge

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Thanks for your patience as well. Custom pools and veBAL are a new concept, maybe also the future of France, so it’s important to work through good governance processes around them.

While you are at it, this is really going back to the fact that Xave has admin rights over these pools.

Could you perhaps include a full report(spreadsheet) of all the admin settable settings for each pool and what they are set to and include a statement int his governance that you will post notice here on the balancer forum of any changes to these settings you make in the future within 24 hours of doing so?

Thank you.

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@Tritium sure we can do that while we are admin over the pools (with the stated goal that we will relinquish admin rights after a proposed period also to be listed in the doc we’ll share detailing the admin settable settings). Will revert on this

Though before that - over the new year we set the protocol fee parameters as discussed above and let some fees accrue. We’ll be triggering some fee distribution txs and are preparing a short walkthrough doc to show the sequences live for everyone here

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Pls see this Fee Split Walkthrough that addresses the discussion around implementing fee splits between Balancer and Xave for the XSGD:USDC Polygon FXPool and the new EURS:USDC Ethereum mainnet FXPool. Open to any feedback as always.

Thanks again everyone here, esp @Tritium and @solarcurve, for the good point outs.

Re admin settable settings documentation, we’ll post a separate Notion page here soon as well

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This is better, but it appears you are sending less than 50%(18.5%) of the total fees collected to Balancer. Is there a reason why Xave custom pools should pay a lower rate of fees than any other pools while still receiving BAL emissions? I really don’t know the answers here.

This is one of the first custom pools requesting a gauge, so we just have to figure out what the rules are. Boosted pools currently send 25% of the DAO fees as bribes (also to veBAL hodlers but in payment for more emissions). It seems like it would be reasonable to take 25% of the 50% BAL fee (12.5% of total fees) and use it to bribe for rewards on the same pool (like boosted pools).

If Balancer still takes 50% of fees, which we likely should if there’s a gauge with emissions flowing, I’m not quite sure how Xave makes money. Clearly you need some share, but should that come out of the 50% normally paid to Balancer or out of the remaining 50% usually shared with LPs. In the end, at least for now, it seems LPs will be getting a lot more value from the emissions than they would from the fees.

Everyone else pays 50% of swap fees to the DAO.

Interested in feedback here from Xave, as well as from anyone at Balancer who is working on BD around custom pools. Certainly don’t want to derail an important strategic direction for Balancer, just make sure things are clear, fair, and beneficial, or at least not detrimental, to token holders.

Anyone from the Balancer community have any thoughts here?

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bit tricky but thank you for illuminating this as a discussion topic since it is important.

I think the key factor when a custom pool is applying for a gauge is that Balancer’s cut is = to the project’s cut. which it is in this case.

If we insist on Balancer taking 50% of revenue as we do in other pools it would become untenable for projects making custom pools to get gauges. Ultimately we want to encourage custom pools to be created so I think it’s prudent to be pragmatic on this point.

That said, the fact is emissions to custom pools where Balancer takes less than 50% of total revenue will be less efficient for generating protocol revenue than regular pools. Thus we need to control the total emissions custom pools can get to avoid an outsized impact on protocol revenue.

So two rules for custom pool gauges:

  • Whatever protocol fee is applied to the pool, Balancer takes half of it and the project gets half. There must be some fee applied to get a gauge.

  • Custom pools where the project has a cut are capped at 2% of total emissions regardless of underlying tokens

This sounds good to me and reasonable.

I agree, we need to give custom pool providers a way to make some money, and LPs should see some earnings other than BAL emissions and whatever else those entail.

FXPool admin callable functions listed here along with statement to turn over admin role over these functions https://www.notion.so/xave-finance/FX-Pool-Admin-Settings-c8be5db5106146a084ab71d15beca51e

If all looks good here to everyone, there would be nothing left pending on Xave side to address re discussion points above

added into the OP a gauge with 2% emissions cap. clear for a vote

https://snapshot.org/#/balancer.eth/proposal/0x7b16a1e03240e33ebbfc933068e04411443bd0726a02a00e8fd3f3f05be9836a