[BIP-238] Enable wstETH/bb-a-wETH Gauge [Ethereum]

PR with payload

Summary:

This pool uses the ComposableStablePoolFactory-v3 1 which addresses the reentrancy vulnerability disclosed during February 2023. This gauge is uncapped, and would enter as a “core pool” under BIP-19. This means 65% of 50% of yield generated by this pool is to be used for bribing for votes on it via Hidden Hand.

The pool wstETH/bb-a-wETH is to replace the primary wstETH/wETH pool on Balancer v2. The current wstETH/wETH contains $346,306,704 in TVL at the time of writing and is the largest pool across all Balancer v2 deployments.

References/Useful links:

Protocol Description:

This pool utilises wstETH and linear pool bb-a-wETH which deposits wETH into Aave v3 wETH reserve. The linear pool utilises a wrapper developed by Aave Companies.

Motivation:

Migrating from wstETH/wETH to wstETH/bb-a-wETH is expected to generate an additional 36 bps (180/2 x 0.5 x 0.8) of yield for Liquidity Providers (LPs) after fees and bribes relative to the current pool. This is due to the Aave v3 wETH reserve generation 180 bps of deposit yield. Historically, this yield has been higher.

Excluding token emissions, the inclusion of the bb-a-wETH linear pool, increases the passive yield for LPs by an estimated 22.5%, (0.36%/1.60%). This is equivalent to >5x the swap fee APR at the time of writing.

Specifications:

  1. Governance: Find more information about governance on Lido’s forum.
  2. Oracles: wstETH Oracle, see here bb-a-wETH Oracle: TBA
  3. Audits: For Lido Protocol and Aave v3, see below
  1. Centralization vectors: See here.
  2. Market History: See wstETH and wETH.
  3. Value: Balancer will earn the protocol fee on wstETH yield and deposit yield generated by Aave v3 on Ethereum via bb-a-wETH.

Link to Pool: TBA
Link to Gauges: TBA

Disclosure:

This proposal is the sole work of @Llama contributor, @Matthew_Graham, via the legal entity TokenLogic. Llama is a Service Provider to Aave DAO.

3 Likes

Pool: 0xE0fCBf4d98F0aD982DB260f86cf28b49845403C5
Gauge: 0x5f838591A5A8048F0E4C4c7fCca8fD9A25BF0590

Transaction: 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 0x5f838591A5A8048F0E4C4c7fCca8fD9A25BF0590 and the corresponding gauge type for the data(bytes) argument.

data(bytes) : 0x3a04f9000000000000000000000000005f838591A5A8048F0E4C4c7fCca8fD9A25BF05900000000000000000000000000000000000000000000000000000000000000002

1 Like

https://snapshot.org/#/balancer.eth/proposal/0xc9ff701f8bdbe484aae16ed65881a525f40794f9417ad13df5c56a5925c81bdd