[BIP-23] graviAURA ecosystem gauges (3)

BAL Gauges
1

Summary:

This Forum post requests 3 gauges for pools that introduce our new graviAURA wrapper, that should each be run under a separate snapshot:

AURA/ETH/graviAURA (33/33/33)

To support deeper AURA liquidity for traders seeking to buy/deposit into graviAURA.

auraBAL/ETH/graviAURA (33/33/33)

To support both auraBAL and graviAURA liquidity and utility and to provide swapping auraBAL with industry standard routing over ETH.

BADGER/graviAURA (80/20)

To drive value to BADGER

Here is the multisig ticket around seeding initial liquidity in these pools:https://github.com/Badger-Finance/badger-multisig/issues/580

Governance Process Request:

As this is the first gauge vote that AURA voters can vote on. BadgerDAO requests that the snapshot for these gauges be extended to last 5 to 7 days in length in order to give the parties involved time to educate their user-bases about how to engage in this governance.

References/Useful links:

Badger Websitehttps://badger.com/gravity

Aura Website:https://www.aura.finance

Badger Documentationhttps://docs.badger.com

Aura Documentation:https://docs.aura.finance/

Badger Github Pagehttps://github.com/Badger-Finance/vested-aura

Badger Communityhttps://discord.gg/bfcYzbqeKC

Governance Forum:https://forum.badger.finance

Governance Snapshot:https://snapshot.org/#/badgerdao.eth

Protocol Description:

BadgerDAO is launching a new set of products focused on ve ecosystems under a new Product Division called Gravity. The first Gravity product isgraviAURA.

1600Ă—1077 306 KB

graviAURA is a wrapped vlAURA token with bribe harvesting features similar tobveCVX, Badger’s liquid vlCVX token, which has been live and managing upwards of 2m CVX/vlCVX for the past 9 months. bveCVX is a well established DeFi product, with a 9 month history of successfully managing locking, unlocking, liquidity and orderly withdrawals. The new graviAURA product is a fork of bveCVX, extended with new balancer specific features designed to allow DAOs and other token based projects and communities to create and sustain liquidity. This feature can be described in one sentence as follows:

The vote weight from graviAURA tokens in a Balancer pool with a gauge is used to vote for the pool the tokens are in.

This solves the free rider problem. By including graviAURA in a pool, all depositors in said pool are voting for it equally. You cannot siphon yield from the pool by depositing and not voting. graviAURA automates locking of tokens, locking on a weekly cadence. Deposited tokens, as well as any unlocked tokens from a given week, can be withdrawn until the next lock. Additionally, gauges will provide limited liquidity when there is no AURA available for withdrawal.

Motivation:

graviAURA is designed to help DAO’s create liquidity. Part of the bootstrapping plan for graviAURA involves supporting an ecosystem pool for at least the first 3 months. We would like to launch the ecosystem pools, as well as a BADGER pool, as our first graviAURA gauges.

We expect each of these pools to maintain a base natural yield even without external voting, due to the fixed weight of graviAURA(and hence underlying vlAURA) in each of the pools that will consistently vote for them. Note that some external driver will be required to bootstrap pools with initial self-voting capital or incentivize an increase in the size of the pool.

As soon as these gauges are up, BADGER will make the following changes to our voting and farming strategies around balancer:

  • All free votes controlled by the BadgerDAO Treasury will initially be split between these 3 pools.
  • All POL farming BAL will be moved from the BADGER/WBTC pool to the BADGER/graviAURA pool. (assuming all 3 gauges pass)
  • Any fucoolture bribes will be directed only to graviAURA pools, and if possible offered on an Aura focused bribe market.

Specifications:

Governance:
BadgerDAO has a hierarchy of different multisig accounts that handle operations within the DAO. These have specific use cases and are outlined in detail in the repo linked here:Badger Multisigs.The highest risk operations are controlled by a timelock address which needs to be triggered and has a 2 day time delay to perform any actions.

The Badger Multisig maintains governance over the contract, and can redelegate the votes to a new EOA should the wallet be compromised. The potential risk of this centralized element of the system is therefore the misdirection of all graviAURA votes for 1 voting round.

Oracles:

Badger does not rely on any external oracles

Audits and review:

Vaults 1.5 Quantstap audit:https://github.com/Badger-Finance/badger-vaults-1.5/blob/main/security/audits/Badger%20Vaults%201.5%20-%20Quantstamp%20-%20Jan%202022.pdf

C4 contest for graviAURA strategy:https://code4rena.com/contests/2022-06-badger-vested-aura-contest [public results pending cool off period]

C4 contest results for bveCVX strategy (upstream repo of graviAURA):https://code4rena.com/reports/2021-09-bvecvx/

Additional audit results can be found on badger.com underSecurity & Audits.

Centralization vectors:

Badger utilizes upgradeable contracts for many of the products we offer. Badger upgradeable contracts are protected by a 2 day timelock… Our API and frontend are hosted by centralized entities, but we are developing a fully permissionless IPFS hosted access point primarily intended for strategy development.

**Note:**Due to the snapshot voting element of AURA and the requirement to automatically calculate and regularly re-vote during rounds, voting is currently controlled by an EOA. This EOA sits in a secure keystore that is only accessible to 2 senior members of the Badger team and the bot which runs the voting script. Badger will work with Aura over time to decentralize snapshot voting as much as possible, and has an active workstream focused on removing centralization risks around automated snapshot based voting.

Market History:

AURA, graviAURA and auraBAL are all new tokens focused on the balancer ecosystem and currently do not have significant liquidity or trading history. The purpose of these gauges is to help build that. Eth is a well known token with proven market history that is easy to find.

Badger: Is the governance token of BadgerDAO. It has currently been trading in an 80/20 BADGER/WBTC balancer pool that can be found here: BADGER/wBTC 80/20 Pool. The treasury maintains additional Protocol owned liquidity on both Curve and Uniswap V3, and BADGER is well traded across a number of centralized exchanges, including FTX, Binance and Coinbase.

33auraBAL-33graviAURA-33WETH gauge

0x2e79d6f631177f8e7f08fbd5110e893e1b1d790a

33graviAURA-33WETH-33AURA gauge

0x7598a96271700f20a542fa69857f0b59d6c162e4

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We have voted against auraBal & TetuBal gauge proposals,they are a direct tokenizinaion of veBAL,AURA a diluted derivative having voting rights of backed Vebal, thus rewarding any such tokens would be at detriment and exclusion of native balancer Vebal holders, moreover circumventing the 10% cap reward imposed on VeBal. Any gauges proposal containing such tokens will be voted against by us.
We welcome competition and wish Aura success in achieving increased TVL acquisition to Balancer albeit through non-backed veBal derivatives.

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Just wondering. Would you be more amiable to such wrappers if they allowed you to delegate your boost to them in exchange for some sort of reward?

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This is a convenient way for pool depositors to vote for their own pools and reduce the free rider problem of some pool depositors voting for it but others not. We really think it can bring a lot of TVL and interest to Balancer. Instead of managing your voting+deposit positions manually, they can be naturally balanced in the pools.

Is it any pool that also includes auraBAL the main problem here or do you have concerns about regular graviAURA pools (like the badger/graviAURA or if there was a 40-wbtc/40-eth/20-graviAURA request for example) as well?

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My main concern here is the 80% BADGER pool. We will likely be preparing a proposal in the near future to tighten up requirements for new gauges, one new requirement being an 80/20 pool must be the primary liquidity pool for the 80 token.

This is recognizing that trading efficiency is lost when using an 80/20 pool and we need to ensure all gauges can benefit the protocol (earn fees).

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That sounds a bit tricky to define. What is primary liquidity? Do CEXes count? Needs more thought, but we don’t need this pool right now in this form and can wait for clear guidance on 80/20 pools to request one. We would like to pair graviAURA and BADGER and engage our HODLers in this new product.

Would any of these be more acceptable, and thoughts about the choice?
WBTC/BADGER/graviAURA 33/33/33
BADGER/WBTC/graviAURA 50/25/25
BAGDER/WBTC/graviAURA 40/40/20

Happy to change our request to any of those pools. I think we like the 33/33/33 the least, because we’d like to see how different kinds of graviAURA pools perform.

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40/40/20 looks pretty good to me. and yes, there will be a draft presented fairly soon that everyone can offer feedback on. Nothing is a done deal by any stretch.

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Greetings @solarcurve, I’m Po.

Let me give a bit more context about proposing the 80/20 Badger/graviAURA pool and why I don’t think it makes much sense for us to apply for the alternatives like 40/40/20.

Please take it with a grain of salt since at this stage these are, basically, my personal opinions.

The way I see the main purpose of the Badger/graviAURA 80/20 pool is for it to be the “helper” token in the Badger Flywheel Vaults structure on top of AURA.

Unlike most other yield managers, Badger seeks to approach farming in a more ecosystem-friendly way, so instead of (or in addition to) autocompounding the rewards, our strategies distribute yield-bearing versions of the tokens they farm - the helper tokens.

The preliminary goal for the AURA vaults would be to distribute the rewards in three types of helper tokens:

  • graviAURA (locked AURA)
  • bauraBAL (staked or LP’d auraBAL)
  • Badger/graviAURA (Badger self-voting LP)

The helper tokens would then keep the flywheel rolling on their own, by distributing their rewards as more interest bearing vault tokens.

And on top of that the base vaults would receive Badger emissions that would be derived from how much Badger the strategy has bought over the select period.

So for these purposes, a Badger/graviAURA 80/20 pool would be optimal because it maximizes Badger buying while minimizing the effect on the ecosystem tokens.

For example, if the strategies were to sell 25% of the tokens for Badger/graviAURA, it would mean 20% of bought Badger, 25% of sold BAL, and 20% of sold + 5% of locked AURA.
All while the rest would be distributed in bauraBAL tokens that help auraBAL peg - and graviAURA that locks more AURA.
Aside from that, graviAURA would be a proxy for the AURA liquidity, which it generally lacks.

Then, my second choice for that helper vault would be the current Badger/WBTC 80/20 pool, albeit I find the graviAURA pairing having a larger positive sum for the ecosystem.

And then, the 40/40/20 would be my last choice since 40% of the “selling power” would be wasted.

This is recognizing that trading efficiency is lost when using an 80/20 pool and we need to ensure all gauges can benefit the protocol (earn fees).

From my point of view, that overall structure would bring much more benefit to the protocol than what can be measured in fees.

Similar to how there would be much more benefit from the graviAURA paired pools in general, since the pools make mercenary liquidity somewhat impossible and align all the actors in the ecosystem much better.

==

So, with all that in mind, it would be good if Badger could have the gauge now, migrate a part of its Treasury Controlled Liquidity there, and build the products around it.

But it’s also not the end of the world if the gauge gets denied and we have to stick with the Badger/WBTC pool - especially if we get another chance at a gauge vote in a month, when we would expect to have much more stuff available to share with the public, and potentially the vaults themselves to illustrate the concept. It’s obviously better to build the vaults in their desired shape from the ground up, but oh well.

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I like that you all are taking a novel approach to this, I just think an 80/20 is clearly better for you than it is for Balancer.

Maybe I am missing something and you could elaborate on the additional benefits you see beyond fees a pool generates. At the end of the day there are only so many emissions and emissions to 80/20 pools that are not the primary liquidity source of the 80 token are sub-optimal in terms of fees generated compared to directing those emissions to a 50/50 pool, all other things being equal.

I’m open to understanding more and being convinced. I see how it’s a great thing for you. I have no problem with voting, etc. I want to support cool innovative things like this. Recent experience has jaded that view a bit though so here we are.

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Ok let me try to answer this/why it’s important:

graviAURA charges very very low fees, and if it’s mostly in pools almost none. We only really take 3% of the underlying yields which we expect to be quite low.

What we do get is 10% of the underlying vote. In order to make money, the DAO has to figure out how to realise some returns from that vote.

There are 3 ways I can think of to do that:

1: Sell the votes for bribes (requires a bribe environment and is currently very inefficient)
2: Have use BADGER snapshots to determine what we vote for to create underlying value for our token (we need a lot more influence for this first)
3: Vote on a pool where our treasury captures a reasonably high % of the pool, so we can extract yields.

Right now, we are 50% of the BADGER/WBTC 80/20 pool. That gives us the ability to collect half of the value from the votes we generate (which is quite good). Po is trying to think about how we make money.

Our goal was to move to a BADGER/graviAURA 80/20 pool because it ensures that everyone who is in the pool votes with some weight, and because we have plenty of BADGER/WBTC routing, but actually expect graviAURA to become a gud routing token in the Balancer ecosystem.

Right now to swap Badger for AURA, you have to swap BADGER → BTC → ETH → AURA. Decent liquidity in a BADGER/graviAURA pool should allow some amount of trading for between BADGER and other graviAURA paired tokens. Based on our desire to keep maintain high liquidity there, we suspect this will allow somewhat sizeable swaps.

My view of all of this is that we want to work with the ecosystem and don’t want to create problems or rock the boat. The problem is we already have an 80/20 pool, and plenty of other BADGER/WBTC liquidity so anything else is kind of less interesting for us right now, makes more sense to just stick with our BADGER/WBTC pool.

In another potential turn of events, there is still no delegate for the HH aura market. Badger could build one, but again we have to make money, so we’d take like a 5% fee to vote for pools that supported a DAO. If this were the only delegate, 5% could turn out to be quite a bit. Overvoting for an 80/20 pool as is happening right now in some cases does seem toxic to the system. So if we were to build such a delegate, I’d think a 40/40/20 BADGER/BTC/graviAURA pool would be a great target for those votes as it generates liquidity and value for our token HODLers and potentially if it gets big enough allows us to pull some of our POL from other exchanges.

So… What to do. In my mind this was a vote to just get things going. I have 2 suggestions.

1: Leave the 80/20 pool in, and let the voting happen and see what happens.
2: Take it out

I’d suggest we wait a few more days and see how things play out. Then we can decide which of these 3 gauges we want to bring to snapshot, and let voters decide. I’d rather make sure that we are bringing coherent things to governance and not just firing off rapid-fire gauge requests.

I also look forward to more of these conversations going forward :slight_smile:

@solarcurve @Mr_Po does this seem reasonable?

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After further consideration and discussion. This gauge is supposed to demonstrate the power of graviAURA by helping the AURA ecosystem. The conversations here about AURA liquidity vs those about BADGER liquidity are quite different.

I therefore revise my request to only include the following 2 Gauges - I also did not include links to the gauges in the original governance so they are here:

33auraBAL-33graviAURA-33WETH
and
33graviAURA-33WETH-33AURA

Let’s move the conversation about the BADGER/graviAURA pool to fresh governance that @Mr_Po will bring soon. This week is about liquidity for AURA!

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Why two pools and not a single one with all 4 tokens? 17 auraBAL, 33 graviAURA, 33 WETH, 17 AURA?

I haven’t run the numbers, but it looks like a similar situation to the Olympus one - BLabs’s bizdev team helped with an analysis that concluded a single pool would increase liquidity depth despite the 2:1 weight imbalance

On Balancer, the $OHM liquidity can be aggregated with both exchange assets (WETH and DAI), which results in a potential 25% improvement in price impact compared to fragmenting liquidity across two separate pools of OHM-DAI and OHM-WETH

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Great question! The main point of the graviAURA is that it votes for the pool it’s in. SO by having 33% graviAURA the pool will vote for itself with 33% of it’s value in vlAURA and should have high yields(50-100% right now I think) without any external voting. For that reason we started from a concept of 33% graviAURA(gud yields).

With that in mind, 33% AURA and 33% ETH seemed to be the thing that provided the most depth and utility.

Good to know that you’re thinking about these things a lot tho. We will consult for future pools, and would love to help you understand how graviAURA works better.

Once these pools are up and functioning/voting I think people will see.

Also I think auraBAL liquidity is maybe the primary objective here, and it seems like your proposed pool would provide less auraBAL/ETH depth. Do I understand correctly?

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Well, according to the OHM analysis, not really. IIUC, it’s saying that the increased size of the pool is enough to offset the loss in depth that comes from the weights difference. I’ll see if I can find that spreadsheet or replicate it.

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After thinking things over more I will have to vote against any gauge with graviAURA. If these gauges capture a large amount of emissions it stands to give BadgerDAO significant permanent voting power in AURA. Since the CREAM whale has been actively depositing into graviAURA I cannot dismiss the possibility of some arrangement where he plans to shift his considerable voting weight to graviAURA pools. I expect most voting power gained by BadgerDAO through graviAURA would be directed to BADGER/WBTC which is an 80/20 that is extremely inefficient in terms of incentives spend for the fees it generates. The Balancer community should be wary of any initiative that would push more emissions onto these types of pools, even indirectly.

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I agree with @solarcurve’s take above. We should be wary of potentially setting up the veBAL system in a way that it is directing too many emissions to inefficient pools. We’ve already seen this play out by early movers and while that in and of itself isn’t a bad thing, allowing the emissions market to be cornered in the short term is a big negative to me. Some may say this creates competition, but if things sway too much in one direction I feel it would actually deter others from joining the game

None of this is to say that Badger is doing anything wrong, I am only trying to read the situation as it is presented at this current juncture.

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Right now as specified, BadgerDAO controls 10% of the vote in graviAURA. Half of that is currently promised to support AURA and auraBAL liquidity for 3 months, so in the end we have 5%.

It is not our intention to vote with extraordinary amounts of the graviAURA vote weight to create huge yields on BADGER pools. It is our intention to sell that vote weight for revenue on hidden hands or through private bribes, and to use it to support graviAURA pools. We also intend to maintain a BADGER pool on balancer and maintain modest yields there for our treasury and users, and to support yields on graviAURA megacap pools containing only graviAURA and things like WBTC/ETH/USD (+ the metapools like stETH) and then build vaults on top that emit graviAURA and auto-compounding (also no-sell) bauraBAL instead of selling.

It is also worth noting that graviAURA is not a permalock. Tokens are withdraw-able after 16 weeks for 1 week. Further, at the moment, most of the the AURA is already locked and will be for 16 weeks, so during this period we have time to show our intentions, and in the next epoch AURA unlockers will decide where most of the AURA lands.

So can you think more about what you would like to see to make this not seem bad to you? The way I see it, graviAURA is a way to align incentives very well. It’s a shame that the early stage of the balancer wars has been framed by bear market shitcoin farming more than real yield generation, but the next pools we will request are ones that should generate stable/decent yields on USD and ETH and BTC.

Sorry we have a low mcap, hoping to change that as we develop cool new influence tech and eventually find ways to allow our token to direct the influence we earn. Sorry there are some whales abusing that.

In the end we have worked for a long time on a product that is meant to bring everything together and align VE in a new and better way. I hope I have alleviated enough concerns to pass 2 gauges that will help this ecosystem, and that’s fees will also support the. By the time our commitment to stop voting 50% for ecosystem pools ends, graviAURA will be withdraw-able.

If it does not pass, then can we find a proper forum to come up with a structure that makes whoever is concerned more comfortable and bounds our powers? I think it will be a long time before graviAURA directs many emissions. This round, most of the 1.9 million AURA locked hadn’t figured out voting or delegation yet, and not that many votes got a pretty nice chunk of AURA’s veBAL, and if we have these gauges, next time our votes can focus there as well.

Where is best to talk about graviAURA in general more and these sorts of ecosystem level agreements and concerns? They are more important for gauges other than these, I agree.

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The last thing I want is to go against people who voluntarily build cool stuff on top of Balancer. I think graviAURA could have been a good value add for Balancer if it wasn’t for core pools, which I believe addresses the same flaw but in a more value aligned way. In my view graviAURA is great for Badger and neutral to potentially quite bad for Balancer.

I appreciate the additional details which helps a bit but I believe the concerns I outlined remain valid, even if unlikely to ever happen. I have to consider the possibility that each gauge could get a huge amount of votes and what that would mean.

Removing the % of voting power going to Badger’s discretion would be one step in the right direction but I still don’t see why Balancer would want graviAURA over core pools.

I’d say the best forum to discuss issues like this is to make a thread here under “General Chat”. I intend to put more proposal ideas up for community input as discussions going forward myself. More transparency is good for everyone.

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Imagine an (steETH/ETH)/graviAURA 90/10 or 80/20 pool for example.

This pool could sustain pretty decent yields on ETH, as long as HODLers were willing to take the muted IL loss of the graviAURA in that pool. While the graviAURA would not trade much, it would allow for people who wanted to support the ecosystem to stake in and vote for those pools, ensuring that everyone in them was also “paying their way” for emissions.

So in the end as more graviAURA pools start to exist I see 2 things happening.

1: People who are bullish on AURA/BAL enough to take some IL risk move into more and more pools.
2: That creates upward price pressure on AURA and BAL as there is more demand for these yields and people increase their AURA exposure as it has utility.
3: As AURA yields go up, farm yields get better auraBAL yields get better and auraBAL grows faster.
4: Over time with a number of graviAURA pools, it’s not that 1 or 2 pools using graviAURA are getting all the yields. It’s that those who are willing to hold AURA (and by proxy veBAL) in LP are able to have a better way to vote for pools and farm them (both with the aura in the pool and with veBAL and vlAURA they direct).

From an AMM point of view, one can see more and more trades starting to route over graviAURA depending on pool makeup.

From the 10% fees point of view. Badger has to make money so we don’t have these microcap problems ;). We’re not used to it. The goal here is not to blackhole the ecosystem. The goal is to use the votes we have farmed, have bought and have earned from our fees to:

1: Support the graviAURA ecosystem
2: Generate revenue through the DAO through:
a: Selling Votes for Cash
b: Voting for BADGER pools to benefit HODLers (within reason)
c: Developing new products and lines of business
d: If we get to the point where we direct enough value for it to be meaningful for the 10-14 million BADGER currently in supply, allowing our HODLers to direct it to create value for our token.

So to me it seems like everyone wins. I agree that things like 50/50 graviAURA pools are generally a bad idea. I agree that we need to think more about the right rules for how all of this works. Some of those probably make more sense in balancer governance (rules around what pools get gauges). Some make more sense in Aura governance (max % of aura vote for any given 80/20 pool and/or based on mcap or whatnot). Some can be handled by graviAURA if needed (max % graviAURA in pool based on matrix with remaining votes going to the other HOLDers).

I’d prefer not to handle these rules in graviAURA, and actually think most of it is best handled in Aura governance, but if things get out of control. We are here to build a long term sustainable ecosystem to help DAOs build stable liquidity and explore new layers and innovate. Badger HODLers and the BADGER council are reasonable people. We can step in.

Does that answer your question?

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Maybe I am missing something and you could elaborate on the additional benefits you see beyond fees a pool generates.

So here are two main points that I would like to bring up.

One is why I think that graviAURA is a value-adding asset to the ecosystem in general - and why the fees are not the only factor. And another is why I don’t think that all 80/20 pools should be treated equally and should be considered on a case-by-case basis by the Balancer and AURA governance.

  1. The graviAURA value add to the Balancer + AURA ecosystem

This is recognizing that trading efficiency is lost when using an 80/20 pool and we need to ensure all gauges can benefit the protocol (earn fees).

I don’t view trading efficiency as the pinnacle of the Balancer ecosystem. One of the main opportunities that the tech provides is to create these 80/20 types of pools that by design are not efficient for trading, but they compensate for that with the reduced price impact exposure for LPs.

And graviAURA paired pools if done right would make that feature a strength, not a weakness or an attack vector.

So, first, let’s start with an example that is rather neutral and in my view checks all the boxes for being a value-adding pool for the ecosystem, a WBTC/ETH/graviAURA pool - or a bb-a-USDT/DAI/USDC / graviAURA pool.

The usual pools in influence token ecosystems have a flaw in how the incentives are aligned among different participants, being LPs, lockers, and vote influencers/bribers. And we can see how the whole game theory of this interaction has played out in the Curve + Convex ecosystem.

That ecosystem design allows for:

  • Mercenary liquidity (LPs who farm & dump the tokens that other parties have voted for - and the amount is multitudes higher than the fees that the lockers get)
  • Mercenary voting (lockers who vote to get the maximum amount of bribes that they dump)
  • Mercenary bribing (not really a possibility now on Convex, but it would be if there was a bribing ecosystem on Solidly, for example)

Among the three, mercenary bribing is the least threat as long as voters have the power to un-whitelist the gauge that is considered unhealthy for the ecosystem.

Mercenary voting can arguably be viewed as the main driving force of the CVX token value, since bribes serve as the main source of yield for vlCVX - and thus the demand to lock.

And there is no solution at all to the mercenary liquidity - especially as a Convex-type yield aggregator emerges, which in a way brings it back to square one Sushi 1.0 liquidity mining, where the LPs can extract value from the ecosystem while paying multitudes less in fees back to the lockers.

The way the Convex ecosystem has been playing out for the last six months or so has been:

  • LPs are the clear winners
  • Lockers exchange the ecosystem tokens close to 1:1 for the bribes
  • Bribers/vote influencers are the main “suckers” who at the end of the day pay for LPs being the clear winners.

I’d like to emphasize that the yield influencers (these are not only the bribers but also actors who want to accumulate the yield influence tokens to direct the token emissions to a specific pool) add the most monetary value to the ecosystem here.

What Balancer tech together with the graviAURA self-voting pools allow to emerge is a potential solution to the incentives misalignment issue.

If an LP by default is exposed to the asset that votes for the pool, the opportunity to make anything mercenary is severely dimmed. On top of it, there is no bribing/voting inefficiency, so instead of three actors, there’s one. The one actor who also provides liquidity to the ecosystem token and is able to capture the full value of that ecosystem token while having direct exposure to it as a trade-off.

In my mind, this is how you create a healthy and sustainable ecosystem that doesn’t just come down to the emissions vs fees ratio that plays its half-life out until the liquidity is not interested anymore.

So the main point I’d like to make here is that graviAURA has a shot at making the Balancer + AURA ecosystem a more competitive actor in the DEX space - by having this unique option to tackle the mercenary liquidity issue and create sustainable liquidity.

And sustainable liquidity isn’t something that only the DEX (or the lockers) is interested in. It has a legitimate demand that isn’t served in the current DeFi environment.

For example, one of the ideas for graviAURA (which is still a wip, hence not shared publicly yet) is to direct a part of the voting fee to bootstrap the new pools of the new graviAURA pairs to get into the ecosystem.
So if you are a DAO X, all you would have to do is to create an XToken/ETH/graviAURA type of vault, have it approved by the Balancer and AURA governance, and then graviAURA would bootstrap the pool for you, and as a result, you would get some level of sustainable liquidity that comes from the self-voting feature of the pool.
So it would be a tool to grow the overall ecosystem and align the new entrants with its growth, since they would be exposed to graviAURA themselves.

This also brings me to my second point being:

  1. Not all 80/20 pools are equal.

As fees are not the only variable in the equation, it matters whether the specific pool is considered healthy for the ecosystem regardless of the fees it earns.

And this is where Balancer and AURA governance should shine, and potentially to an extent the BadgerDAO governance as the third layer, which shouldn’t really be needed.

For example, if someone would create a 95/5 graviAURA/ETH pool and applied for the gauge, that wouldn’t be healthy for the ecosystem and wouldn’t be likely to be approved by the gauge vote, since that would be a minimally useful blackhole of token emissions of the protocol.

Side note, I also don’t think that 50/50 xToken/graviAURA types of pools are a great idea either, even though they would pass the “no 80/20 pools” checkbox.

If an 80/20 pool is being used as a way for one single party to get the majority share of the votes in the protocol - that wouldn’t be healthy too, since it would compromise the decentralized nature of the protocol, which generally leads to a negative-sum game for all the parties involved.

I won’t dive into the Badger vault product since we’ve decided to postpone that discussion until we have something more cohesive to present and discuss.

But 80/20 pools could still be useful for a lot of other things, like governance tokens built on top of it, for example.

And it doesn’t matter in this case whether the token has more capital-efficient liquidity outside of it.

It still adds value and aligns the ecosystems.

For example, imagine DAO Y that decides to use a governance model akin to Balancer, and have Ytoken/graviAURA 80/20 as the governance token that gets locked.

Would it add value to Balancer and AURA? And if it would, would it still be an issue if that Y token had other liquidity sources that provided more liquidity depth?

Then imagine the scenario where demand for that governance token shoots up, which by extent means that more people are buying graviAURA and locking its liquidity, which is a proxy of AURA liquidity, which has a somewhat direct relation with BAL.

Would it still be a net positive thing for Balancer, or would it not, even if we assume that somehow the Ytoken has zero trading volume in the Ytoken/graviAURA pool?

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