This proposal aims to receive community support for whitelisting Yearn’s yBAL locker/voter contract on Ethereum, to lock B-80BAL-20WETH for veBAL.
Motivation
Yearn is building yBAL, a new veBAL liquid wrapper (based on our successful yCRV product) designed to tokenize the different benefits of Yearn’s veBAL position. This system will be comprised of a base token (yBAL) as well as three “activated” yBAL tokens.
yBAL can be minted by locking B-80BAL-20WETH into Yearn’s veBAL position (a permanent one-way “forever” lock). This operation mints yBAL to the user at a 1:1 rate. yBAL carries no yield itself but allows users to enter or exit the yBAL ecosystem. It will be soft-pegged to B-80BAL-20WETH via a Balancer pool.
Yearn passes the benefits from its veBAL position to the three activated yBAL tokens:
1. st-yBAL (staking rewards):
st-yBAL will be a yVault that holds yBAL and receives yield from…
100% of the admin fees from Yearn’s total veBAL position
Gauge voting bribes (any yBAL inside st-yBAL earns yield by voting for gauges with bribes).
All profit will be swapped for more yBAL which will be deposited back into the strategy.
2. lp-yBAL (liquidity pool rewards):
lp-yBAL will be a yVault for the B-80BAL-20WETH/yBAL Balancer pool.
It will earn yield by auto-compounding BAL emissions and trading fees into more B-80BAL-20WETH/yBAL BPTs.
3. vl-yBAL (gauge voting power):
vl-yBAL will be a contract that accepts yBAL and offers holders liquid on-chain veBAL gauge weight voting.
Broader Balancer DAO/gov votes will not be extended to vl-yBAL holders.
vl-yBAL holders receive no yield, only 100% of their respective veBAL gauge voting power.
Users can choose to move between activated tokens at any time depending on which benefits they want, except for vl-yBAL which will have time lock restrictions varying from 14 to 28 days.
Technical implementation:
Yearn’s yBAL locker/voter has now been deployed…
0xBA11E7024cbEB1dd2B401C70A83E0d964144686C
We propose adding it to the allowlisted addresses in the SmartWalletChecker (0x7869296Efd0a76872fEE62A058C8fBca5c1c826C) so that we can launch the yBAL ecosystem and begin locking B-80BAL-20WETH for veBAL.
Hello. What an exciting proposal. There’s been some differences in understanding with wrapper governance in the past, so just a few questions/points of clarification:
Is this system dependent on a gauge for this pool? Do you have any more information about how you intend to manage this pool in terms the amplification factor and attempting to maintain some form of balance?
Are broader BalancerDAO/gov votes somehow otherwise passed through? If not, by what system or process will yBAL determine how to vote on Balancer governance?
Otherwise everything is super clear. Thank you for a well written proposal.
Yes, Yearn will be looking to get a gauge for our yBAL Balancer pool in due course so that it can receive BAL emissions. Any yBAL in the liquidity pool itself will be used to vote to direct BAL to the yBAL gauge (using its respective veBAL balance). Also, 10% of the yBAL/veBAL in our st-yBAL product will vote for the yBAL gauge. We haven’t yet made a final decision on amplification, but it will be in line with that of similar pools (such as auraBAL and sdBAL). Ultimately, it’s strong demand for the yBAL token that will ensure the pool remains balanced.
We have no plans to pass through non-gauge votes to yBAL users. These votes will be handled by Yearn’s main multi-sig (yChad). As the original veCRV liquid wrapper, Yearn has an extensive Curve DAO voting history that demonstrates an active and responsible voting pattern. We are keen to join the “Balancer stakeholders” and we believe whitelisting our yBAL voter/locker contract will only help to expand and protect the Balancer ecosystem.
Very much in favor. I’m a big fan of the Yearn team (too many bright people to call out by the name here) and all they done for DeFi. It suffices to look back to the early days when YFI got started on Balancer v1 using 98/2 pools to see how important of a Balancer partner Yearn has been and will hopefully continue to be.
IMO this is also healthy for the whole veBAL derivatives ecosystem: this is not a zero-sum game and hopefully Aura, Tetu, Stake DAO can become stronger with Yearn joining the group.
On behalf of Aura and its contributors, we warmly welcome you to the Balancer ecosystem!
On behalf of the Aura delegates, perhaps you could speak in a bit more detail about the following, and I’ll pass along your responses. 1. What do you envision Yearn contributing to this space (other than the current yBAL product)? 2. What do you see as the differentiation between yBAL and StakeDAO’s offering, i.e. what is your unique value proposition. 3. Do you have any thoughts on how Yearn and Aura can work together going forward?
And on behalf of myself, looking forward to working together–ping me anytime if you need anything.
Aside from the yBAL product, we are almost ready to add Balancer to our vault factory (Yearn Vaults) which will allow for permissionless yVault creation for BPTs. This will bring Yearn’s integrations with the Balancer ecosystem up to that of Curve. Thich should “nudge” some Curve yVault and yCRV users to also explore the whole Balancer/Aura ecosystem - especially if the yields are higher!
yBAL is certainly similar to sdBAL. The main differences are the lack of any additional pvp boost (veSDT) and the fact that Yearn products are auto-compounding/set-and-forget. This makes for an overall simpler product that is more appealing to Yearn’s existing user base and partners.
We’re very much in favour of collaboration and have a good relationship with Convex within the Curve ecosystem. We’re definitely keen to explore ways Yearn and Aura can work together moving forward.
Hi, Gary, the Aura delegates have two follow up questions:
What happens if there’s slippage when exiting a vault?
Who’s on the Yearn team/who’s building this product?
I’ve also been asked to drop a note here regarding the standard 2% cap for new gauges, which will apply to the upcoming Yearn gauge as well. I believe all parties understand and have agreed to this provision. This won’t affect the present vote–just preserving a note for the record.
I’m not exactly sure what you mean by the first question, but there isn’t slippage exiting a yVault. The only strategies with potential slippage are single-sided Curve and single-sided Balancer but that isn’t what I was referring to here.
The core devs building yBAL are the same as those that built yCRV in 2022. But as with all major yearn products, it’s a team effort with many contributors chipping in to offer their particular skills.
Noted. I can’t imagine we’d need more than 2% on the gauge. We’re still only receiving 1.05% of Curve’s gauge weight.
Is this move to no-slippage strategies recent? If I remember well, Yearn stable vaults were farming on Stargate and Balancer a few weeks ago, and those pools bear slippage unless I’m wrong.
The issue of slippage upon exiting a single asset vault (like USDC) is not relevant here. This would be relevant if this proposal was the yearn boosted pool which would deposit into vaults like the USDC one.
The vaults Gary describes would take Balancer BPT’s, just like the many vaults on yearn which take Curve LP’s. Because the deposit token is the BPT it is not possible to incur slippage upon exiting.
Obviously Yearn has very few Balancer BPT vaults at this time. Whitelisting yBAL would allow them to roll out more of these products which means more TVL for Balancer, more fees, more bribes made with those fees (which Aura benefits significantly from).
