[BIP-28] Kill CREAM/WETH Gauge

@zekraken , you will hardly find pools that generate that much revenue in all honesty. And I personally don’t think the system is broken, but it simply failed to gain traction. If we attracted 10/20 projects willing to buy at market like Badger or CREAM, we would probably be in a different position today having a different conversation. But no, we have a few bribes for ants, Badger and CREAM. And of those two, Solar proposes to get rid of one, while the other is on the edge…

I mean, we can twist numbers as much as we want but if the intention was from day one to simply optimise LM for revenue generation then all this gauging system would have been unnecessary.

I remain firmly against the proposal of wiping the gauge out. It feels very much wrong eliminating participants when we don’t like their fee generation.

Isn’t Balancer setting up such an environment here?

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generate how much revenue? the amount of revenue needed scales with the amount of votes a pool acquires, it isn’t a locked in figure. These rules also do not apply to every pool

I’m not suggesting to eliminate the pool outright, the ask is to bring voting in line with a respectable level in relation with the fees the pool is generating (if that doesn’t happen after a time period then yes at can be offboarded). In the proposed system any pool controlling less than 5% of the overall votes is free to do as it likes

I don’t think so, what appears to be true is a single entity using their large stack of veBAL to acquire as much future BAL as possible and to keep doing so for as long as possible. can someone please explain how this is a good thing and why we shouldn’t make some adjustments to account for this? is your suggestion to do nothing and leave a wide open system in place?

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@zekraken all the arguments read so far do not constitute valid cases for the killing of the gauge and allow me to repeat once again that the system is designed to let the free market (read veBAL token holders) decide where to best allocate the LM distribution. If this motion passes then, together with the concept that certain gauges are approved or not based on subjective perceptions (see the DIGG case), well then the system has no reason to exist. Because you have just reconstituted a covered LMC that decides who and what deserves the distribution of BAL.

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How will we have reconstituted the LMC with any form of what ive suggested? The LMC made decisions offline and passed with internal votes of 4 to 5 people week by week. But as you know those votes would never fail because changes were agreed to up front, none of that will take place now. Any changes here (any system and ultimately killing gauges) have to be voted on by veBAL and vlAURA holders.

If the system idea ive suggested is dumb, cool we move on, but i’m still not understanding how anything discussed recently resembles the LMC.

You are also bringing in comments about an unrelated proposal (DIGG). Speaking of which why havent you posted why you think DIGG is a good idea on that proposal? Trying to call out people for making subjective decisons also doesnt make sense. Voting is subjective in a lot of cases, people cant see into the future, they make decisions based on the info they have at hand.

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Your idea is not dumb my friend. All I’m saying is that killing a gauge because it generates small fees is a step in the wrong direction imo and puts Balancer on a very slippery slope. And you are right, i din’t chime in the DIGG discussion and I should have done more, but took a while for me to realise what was going on.

I mean, where do you draw the line here? The reference to the LMC comes from the fact that we have subjective interpretations of what is good or bad for the protocol which apparently is something we wanted to avoid.

My opinion is that we need more whales like CREAM (or Badger). This is the only way to rebalance (lol) a system that has clear design flaws.

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Thank you for seeing this. I also agree that we need more whales. If more don’t show up, veBAL will end up being run by a few entities, many of whom seem quite centralised at the moment, and this is a far cry from the dream of a decentralised future for money that I think brought us all here.

That being said, large, long term HODLers, (should)have the most vested interest in ensuring that the economy remains healthy. Having a few entities black-holing most of the emissions into a pool no one else can really get good capture on can harkens back to the SPIDERMAN/BATMAN Roosh drama that was a big part of the whole short-lived solidly thing.

One or 2 whales trying to take over to support specific and limited interests in not healthy, and as a representative of a large veBAL HODLer that intends to get much larger, this is not where we want to see things go.

I think the DIGG conversation is about having some sort of an objective and sensible matrix that all gauges are applied to, both old and new. To govern gauge removals based on that. If this framework leads to killing gauges that no one thinks should be killed, or allowing 10s of percent of the total veBAL vote to be used to direct rewards in a manner that does not support a robust ecosystem with the most(or at least many) possible parties participating, it should be changed before further actions are taken.

Gauges can get problematic, and frankly too many gauges can just become very burdensome to manage.

So: I don’t think we should be talking about killing any gauges right now, and while I do not support this proposal. I do think @zekraken’s idea of coming together to discuss in more detail and build frameworks around what is healthy makes a lot of sense. Because of the way the system is structured, and there are no way to regulate emissions at the veBAL level, these frameworks will have to be enforced/maintained based on a combination of decisions about changing the operation of meta-governance layers like AURA and graviAURA to try to meet the requirement of a framework, and Balancer governance killing some gauges when that doesn’t work.

I think there are really 2 issues that should be addressed, and I suggest someone put more time into thinking it through and we maybe discuss it in a less pointed thread.

1: There are too many gauges, and many of them seem to go week after week with no, or close to no votes. It creates bad UX and eventually will break snapshot or something :wink:

2: There are some gauges that have very few participants, unimpressive trading volume, but are receiving a substantial portion of systemwide emissions. To me it’s less about fees, and more about making sure everyone has a chance to Farm the good stuff and that Balancer governance is being more widely distributed.

As I said, I like the direction this is going, and I like these conversations.

Here was our first attempt at BADGER to deal with our own system not spinning out of control, which was prompted by @solarcurve’s concerns on the graviAURA/auraBAL/ETH gauge vote:

https://badger.com/gravity-news/graviaura-regulation

Note that this is currently a flexible policy space governed by a council elected by Badger Token HODLers, who have all been long standing members of our community and share values of partner-first, ecosystem centric BUIDLing.

As we learn and understand more and have good frameworks and models that have been validated by real world use and tested against extreme scenarios in planning exercise, we can move towards more fixed governance to be voted on by token HODLers. Also note that only 2 of the 7 Badger Councillors are on the core team or do significant other work for BADGER, so they are quite independent.

Also note that the stated objectives are to balance supporting a healthy ecosystem and generating revenue for the DAO. This document also takes into account that things need time to develop and manifest themselves.

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I agree that killing a gauge just because it is underperforming volume/fee wise is not always going to be the correct way to go about things which is why I was trying to think of a way to still allow gauges like CREAM to exist going forward, but at the same time limiting their impact to the protocol. That whale clearly makes up the vast majority of that ~32% and they would have a few weeks to divert their votes elsewhere before there would be no other choice to kill the gauge. Newer gauges have a grace period to get things up and running (maybe it should be longer than 8weeks).

The decision to kill a gauge is also not final (unless people want to draft it that way), a killed gauge could be brought back to life through governance. If someone wants to spread their great voting power to 4 different pools that are similar to CREAM for example, that is still better than having a high concentration in a single pool that is doing relatively no volume/fees. That is where the 5% limit comes into play for “underperforming” pools, if the project that runs the pool takes off then great they don’t have to worry about possibly getting sunsetted.

I guess the real decision is whether or not people feel like something like this needs to be done now or if they would rather just wait it out and see if dilution does the job for everyone.

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yes, this definitely needs to have some consideration as well. A number of pools automatically got grandfathered in at the beginning were from long ago and those same pools are typically at zero week after week like you said. If we make a “mistake” offboarding a gauge it can always be added back by another vote as I mentioned above.

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Hey guys,

This thread is shifting to many interesting insights. However, this topic has a clear proposition of killing a gauge, which should be just as simple as enabling one. It’s up to veBAL to decide which gauges are “playing the game”.

My experience in Balancer so far, has shown that DeFi DAOs have a much bigger need of constant iterations, moving quickly and staying vigilant. While other social and even investment DAOs can give way more time for experiments to flourish.

I see @Andrea81 point, and maybe we would be in a different position if we had ~20 projects like Cream diluting voting power between pools. It would be nice if they were generating fees, tho. :wink:

To me, the case is built around what @SmallCapScience brought up here as “we are looking at this the wrong way by highlighting income from trading fees”, and we should consider what role Balancer is playing in this. Personally, I think there are plenty of motives for us to kill the gauge, atm (not final, as @zekraken pointed out).

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Ok. After all of this I have another suggestion that I think moves in the right direction and is a bit less drastic. Should I move it to another thread, or does someone else want to work with me on polishing it up a bit more. There seems to be a desire to me quickly, so then something simple and systematic seems a start in the right direction:

Here is what I propose (very roughly, someone could spend more time on it)

  • Any 80/20 gauge which receives more than 5% of the vote for more than 4 1-week voting rounds in a year will be terminated by the emergency DAO by default (no-governance) 6 days after posting public notice.

  • Exceptions will be made for 80/20 Gauges that generate more than 5% of system-wide trading revenue. (or list some system relevant 80/20’s or come up with some other metric that allows for things needed)

  • Governance can be held to prevent termination of gauge.

  • Gauges that have consistently been in violation of this rule in the past will be given 2 voting rounds to come into compliance.

  • More thought will go into a framework/guidelines around acceptable emissions for gauges, that can take their time and find a balance between enabling innovating and protecting protocol revenue and stability.

Here is why I propose it
Most of the conversation here has been about value extraction, but ve is about something else as well. Decentralization. It seems like before there was this technocratic LMC that was making decisions about how to allocate returns, ve represents a shift to a free market to do that. If any given entity is able to take, and coordinate, control of most of the weight and use it to continue to grow their influence, than the whole thing is failing to do what it was set out to do.

I think the conversation about the balance between revenue and voting takes time, but I think the complexity of balancer AMMs allow for a lot of creative ways to both use and abuse this system.

What is most important is that the tokens continue to flow to a wide set of HODLers investing in a variety of different pools on the platform.

I think the simple proposal above would greatly widen the distribution of tokens, and would go a long way to preventing abuse.

On that note, it may be worth thinking a bit about also applying the 5% rule to pairs that primarily exist to support low market cap coins, and find some way to define what that is.

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that would kill badger/wbtc wouldn’t it? unless I’m missing something.

all for it tho :slight_smile:

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Dear @0xDanko ,

Thank you for participating in the conversation. Always nice seeing new participants taking part in governance discussions.

The Balancer Emergency subDAO was established following Curve’s Emergency DAO after a very specific case (read more about it here)

The Balancer Emergency DAO exists to protect users from fraudulent activity or potential loss of funds. There is no mention to be found in the proposal that the Balancer Emergency subDAO has any authority to kill any gauge outside of those two premises, including lack of financial performance which appears to be the only reason. The three “Element pools” used as a reference in the proposal share little to no commonality with the current scenario.

The arguments brought up by @SmallCapScience are in fact invalid and should be disregarded as the establishment of gauges is not related to the team behind the project or market price behaviour. These justifications would probably not hold in case of any Legal Action taken against the DAO, Delegators and Executors of the gauge killing as CREAM is both an established token (also traded on Binance) with a healthy trading volume.

Any voting proposal leading to an action of “killing a gauge” would breach the rules established and break the fiduciary contract between users and veBAL voters (and therefore Delegators) represented by BalancerDAO.

Financial decisions were made (buy BAL and lock for one year) based on a set of rules and parameters designed by the DAO and were followed correctly. The pool has trading volume and would appear to me that nothing can be held against those that requested the pool gauge whitelisting.

In a precautionary exercise I would avoid mentioning “the killing of any gauge” because it could be used against you in the future if there were any legal actions to be taken.

It is my duty to bring this information up and to publicly condemn any decision and conversation that goes in this direction, as this action could potentially put in peril the very existence of Balancer and those legal entities that represent it.

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That would require us to vote for it a bit less, which I think would be healthy for the ecosystem. I think we are currently voting with about 5% of veBAL. Assuming it becomes easier and more consistent how to get gauges, we’d much rather see our votes spread out and supporting a number of different tokens, pools, and routing patterns.

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You bring up a very interesting point about the legal aspects here and the fact that the EmergecyDAO is a set of people, not decentralised token-hodler based governance.

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I’m sorry folks, but am I missing something? I considered buying CREAM to part in this festive activity, but had a look at the cream site and it looks dysfunctional, so the token itself is rubbish and I wouldn’t want to support it. BUT! The whale who’s invested in it has a lot of veBAL locked and a lot of BAL emissions coming his way, so he would just vote against the proposed motion and that ends it.

I believe that while discussion is very useful, I don’t think this is a matter for the governance, the Emergency DAO if convinced should act on its own.

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I think all of this presumes that the system was designed without the possibility of killing gauges, which is simply not true. If veBAL holders vote in favor of killing the gauge, wouldn’t it be a breach of our “fiduciary duty” to not abide by the votes of veBAL holders? The contracts allow it, and veBAL holders govern those contracts.

Whether killing a gauge is a good decision in the long run is another discussion but please don’t pretend we don’t have the authority to govern our own protocol.

EDIT: Also to end the tone policing around gauge killing, here is an excerpt of the gauge contract code

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Unless there is some specific representation that shows otherwise, Im pretty sure it would be very difficult to establish a fiduciary relationship between users and veBAL voters / delegates. Fiduciary relationships typically have specific or inherent elements of trust and confidence that the trusting party bestows on the fiduciary agent with respect to a certain undertaking. Here, I guess the undertaking argument would be that veBAL voters impliedly induced trust and confidence of Cream/ETH poolers to invest in the BPT by initially approving the gauge and thereafter allowing it to receive emissions.

I think that would be a stretch, particularly since it seems like the party(ies) that deposited most of the liquidity in the pool did so while also purchasing a large amount of BAL to help influence the gauge vote and direct emissions to the pool.

Of course I could be wrong, too. Not legal advice etc. etc.

Interesting discussion nonetheless.

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I back killing this gauge. The dilemma here is someone with veBAL should be able to vote for any gauge they choose, which is true and they can. However it is also fair for governance to propose to kill any gauge if they see it as unfair, detrimental to, or abusive of Balancer Protocol and its system regardless of how new or mature it is.

Experimentation is a good thing and i hope the DAO continues to allow it, but failing fast and learning is a far better than failing slowly for a long period of time. This gauge is ultimately failing the protocol in my opinion so it is fair to vote on if it should be turned off or not (kill for those who know the system).

Interested to see where the whale may travel next if this goes through.

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To be honest I see some legal risk in killing the CREAM/WETH gauge, especially for people involved in the Emergency SubDAO and Balancer Labs who could be sued for expectation damages by the involved investor who decided to lock veBAL for 1 year in order to generate incentives for a given pool.

On a general level: It is WRONG to think that a DAO vote makes a decision legitimate. DAOs can obviously infringe contractual agreements and the law. The problem is then understanding WHO is accountable.

I don’t see room to legally kill the CREAM/WETH gauge for the following reasons:

  1. The CREAM guy locked the veBAL for one year on the basis of certain rules previously established by governance.
  2. The CREAM/WETH pool was approved by a governance decision.
  3. The large veBAL holder votes for the CREAM/WETH pool according to the rules.
  4. The Emergency SubDAO was established AFTER the vote of the CREAM/WETH gauge and the relevant proposal did not mention the possibility of eliminating gauges which are not supported by relevant fee generation.
  5. The proposal mentions only the Curve Mochi pool case, which was a clear governance attack and has frankly nothing to do with the CREAM/WETH situation (see The Curve Emergency DAO has killed the USDM gauge - Proposals - Curve.fi Governance).

My legal concerns are also connected to the very low level of decentralization of Balancer. The votes are in the hand of big whales. Moreover, people who are in the Emergency SubDAO are also very well known veBAL voters, which seems to show the existence of a conflict of interests. Especially for people located in the US I would suggest to be careful and request a legal opinion before making such a drastic decision.

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The emergency subdao is just the multisig that is authorized to call killGauge. If we want to authorize another multisig to kill this gauge then we definitely can do so. I expect governance to abide by the will of veBAL holders and I would argue not doing that is a greater threat to Balancer governance. The point is that the emergency subdao is just the avenue for which to execute on this proposal, and the emergency subdao would not kill the gauge unless veBAL holders vote for it to be done.

There were no contractual agreements so this is a pretty easy point to dispute. The capabilities of the protocol is all on chain for people to read. veBAL voters have governance power over the Balancer contracts. It was never presented otherwise. If you don’t like that, I suggest you propose a governance overhaul.

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