[BIP-200] Enable veLIT Gauge on Ethereum w/2% emissions cap

BAL Gauges
1

PR with multisig payload

Summary:
Proposal to add a gauge for Timeless’ veLIT token on Ethereum, one of the first ve8020 based on the popular veBAL model.

This proposal is a first step aiming to align with the key strategic objective of Balancer, described in the [BIP-146].

References/Useful links:

Description:
veLIT stands for vote-escrowed Liquidity Incentive Token, it is simply LIT locked for a period of time. veLIT is the core component of Timeless’ liquidity engine, Bunni.pro. This engine is designed to maximize liquidity on Uniswap v3 by creating complex incentivization schemes. Timeless hopes that by launching LIT, other projects will be able to incentivize their token liquidity at a much higher level of efficiency on Uni v3. Additionally, Timeless use LIT and Bunni to bootstrap liquidity in its own yield token markets.

How does Timeless work?
Timeless is a yield tokenization protocol. You can provide assets to Timeless (e.g. 100 USDC) and mint PYT and NYT (e.g. 100 PYT and 100 NYT). The assets will be deposited into a farm, and the yield earned can be claimed by the PYT holders. By holding either only PYT or only NYT, you can build either a long position or short position on yield rates such as stETH or aUSDC.

How does Bunni work?
Bunni is a liquidity engine that was built on top of Uniswap v3. It was initially released in October 2022 as a public utility that represents Uniswap v3 liquidity positions as fungible ERC-20 tokens instead of NFTs. This allows for more complex incentivization schemes to be created for Uniswap v3 liquidity. Since its initial release, Timeless has continued to improve and develop Bunni, turning it into a full-fledged liquidity engine, with improvements to its tokenomics inspired by protocols such as Curve and Balancer. These improvements aim to:

  • Encourage the longevity of the protocol by disincentivizing farming-and-dumping and aligning the interests of liquidity providers and LIT holders
  • Provide the protocol with a large treasury to fund growth and reduce LIT price volatility
  • Maintain a high level of liquidity for LIT

For more information about the tokenomics, please see FOO: Fungible Ownership Optimization:` FOO: Fungible Ownership Optimization | Timeless Finance

Motivation:
Timeless is a steadfast advocate of Balancer technology and will maintain its utilization in the long term. By incorporating a veLIT gauge, Balancer highlights the capabilities of the ve8020 model to a wide array of DeFi projects considering their tokenomics strategy. If LIT succeeds in becoming the CRV of Uni v3, both Timeless and Balancer will reap the benefits. This mutually beneficial outcome increases visibility for our respective ecosystems. The potential increase in liquidity, trades, and fees generated by the 80/20 LIT/WETH pool could result in significant revenue for the Balancer protocol and its LPs.

Specifications:

  1. Governance:

  1. Oracles: NA

  2. Audits:

  1. Centralization vectors:
    LIT and veLIT don’t rely on any centralized component in order to operate.
    The implementation of Timeless Improvement proposals submitted and voted by the community must be implemented by the genesis team. Cf governance process Commonwealth

  2. Market History:

  1. Value:
    The implementation of the ve8020 model makes de facto this pool the primary and unique source of liquidity for LIT. Since its inception, the pool generated substantial fees for Balancer and its LPs, totalling $115,686 in less than a month. As Timeless and Bunni grow their users base, Balancer will directly profit from this with increased fees through the usage of veLIT and its underlying 8020 LIT/WETH pool.

Specification

#1
The DAO Multisig 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f will initiate a transaction to the Authorizer 0xA331D84eC860Bf466b4CdCcFb4aC09a1B43F3aE6 calling grantRole with the following arguments:

role: 0xf49d7ffb5922642adc9f29cfb52b2214e81e0b0e54e9cd1e9f70439f0011f368

This corresponds with the role for calling add_gauge on the gaugeController as seen here.

account: 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f

This allows the DAO Multisig to directly add gauges to the controller.

#2

The DAO Multisig 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f will interact with the AuthorizerAdaptor at 0x8F42aDBbA1B16EaAE3BB5754915E0D06059aDd75 and call performAction with the GaugeController at 0xC128468b7Ce63eA702C1f104D55A2566b13D3ABD for the target(address) argument and using 0x3a04f900 followed by the gauge address 0x56124eb16441A1eF12A4CCAeAbDD3421281b795A and the corresponding gauge type for the data(bytes) argument.

data(bytes) : 0x3a04f90000000000000000000000000056124eb16441a1ef12a4ccaeabdd3421281b795a0000000000000000000000000000000000000000000000000000000000000002

#3
The DAO Multisig 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f will initiate a transaction to the Authorizer 0xA331D84eC860Bf466b4CdCcFb4aC09a1B43F3aE6 calling renounceRole with the following arguments:

role: 0xf49d7ffb5922642adc9f29cfb52b2214e81e0b0e54e9cd1e9f70439f0011f368

This corresponds with the role for calling add_gauge on the gaugeController as seen here.

account: 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f

This removes the ability for the DAO Multisig to directly add gauges to the controller.

9 Likes
3

Awesome to see this; more incentives to stake is a big win. The 80/20 pool is nice too.

1 Like
4

Thanks for drafting this BIP. I’m an early fan -community member- of the permissionless baseplate built by these Defi OG @ timeless.

_
What’s already alive between the two communities

  • The choice of using an LBP for price discovery
  • The ve8020 $LIT locker that Balancer pioneered as a way to increasse the POL
  • The indirect exposure to an under-served market : “tight range liquidity pool”

_
Benefits for the Balancer community to vote for :

  • onboarding a skilled, thoughtful and complementary project in the ecosystem
  • a first class access to plug Balancer’s liquidity on the yield market built by Timeless
  • an indirect exposure to the uniswap liquidity engine as an hedge against its competitor : the traction on $LIT = a traction on the ve8020
  • an exposure to the under-served niche market : tight range liquidity pool

And last, the two communities share the same strong ethos in building permissionless & composable core pieces of infrastructures for DeFi.

2 Likes
5

Big fan of this proposal

6

edits: revised the motivation section by eliminating the AURA incentives component (incompatible with the Balancer veLIT gauge) and rephrased it for improved readability while maintaining its essential meaning.

1 Like
7

This would be awesome!

8

https://snapshot.org/#/balancer.eth/proposal/0x600de437385921a7fe87d5b301403fcaed550b2ec52dbfe59c985a59921f67f8

2 Likes
9

This is not a usual gauge but a single recipient gauge. This is the kind used by the veBAL gauge. It has been upgraded with an additional capability to call depositToken when transferring BAL to the recipient. This is useful in the case that a ve8020 system copies the veBAL feeDistributor which has this deposit function. This removes the need for any intermediary contract, i.e. the BALTokenHolder that veBAL uses.

veLIT has implemented the same feeDistributor as veBAL, thus this gauge uses the upgraded functionality. Very cool overall!

This marks a momentous occasion - the first ve8020 gauge other than veBAL!

3 Likes
10

Hey, brother, welcome to the Balancer ecosystem!

One quick comment from the Aura delegates–this should be a capped gauge per the gauge framework. If we can agree to it here for the record, then revision/re-vote won’t be necessary.

1 Like
11

ah I’ll make that correction now. this is a capped gauge, just did not update the title to reflect that

12

All good, all good, no problems on our end then!

2 Likes