[BIP-305] Enable R/wstETH and R/DAI gauges [Ethereum]

BAL Gauges
1

PR with Payload

Summary:

We are deploying two pools on Balancer. One comprises $R and $wstETH while the other pool consists of $R and $DAI. Users will be able to borrow $R stablecoin on the Raft protocol and use the R/wstETH pool to swap $R to $wstETH to leverage up. Users will also be able to borrow $R stablecoin on Raft and use the $R/$DAI pool to swap $R to $DAI. This $DAI can then be used across different money markets, swaps, liquidity pools and vaults, NFT marketplaces, and can even be off-ramped and transferred to all CEXs that support $DAI. The deployment of the R/wstETH and the R/DAI pools is therefore important for all users of Raft.

Additionally, Raft will enable users to leverage up on their $stETH positions (utilizing the R/wstETH pool, or via the R/DAI pool) through the one-step leverage feature that uses our flash mint module.

References/Useful links:

Protocol Description:

Raft is an immutable, decentralized lending protocol that allows users to take out stablecoin loans of $R against $stETH collateral for zero fees. $R is Raft’s native stablecoin. Users can continue to earn their $stETH staking rewards while borrowing $R, making Raft both cost-effective and capital-efficient. As more use cases for $R develop, users will be able to spend, swap, farm, provide liquidity, and off-ramp from DeFi to real-world applications. Users will also be able to leverage up to 11x on $stETH in a single atomic transaction.

Motivation:

The R/wstETH pool on Balancer will allow all users of Raft to swap their borrowed $R into $wstETH to directly leverage up on their stETH and earn more staking rewards. We will be launching a one-step leverage feature on Raft, but in the meantime, users can either use the flash-mint module that can interact with the R/wstETH pool or perform this manually.

The R/DAI pool on Balancer will allow all users of Raft to swap their borrowed $R into $DAI (or any other asset via multi-step swaps). Users holding $DAI can then use all money markets, DEXs, liquidity pools and vaults, NFT marketplaces, and all other products, on every chain where $DAI can be bridged. This $DAI can also be off-ramped and transferred to CEXs where $DAI is listed. This will allow all users to comfortably borrow $R for their $stETH and be able to use it across the entire ecosystem by swapping it into $DAI.

Specifications:

  1. Governance: The Raft protocol is governance minimized. This means that nobody has control over any key part or mechanism that affects how the protocol works. There is no way to pause the smart contracts. Raft only has the ability to adjust fees

  2. Oracles: The pool relies on price feeds from Chainlink and Tellor

  3. Audits: Raft is audited by Trail of Bits and Hats Finance

  4. Market History: See $R here, $wstETH here, and $DAI here

  5. Value: These are the first R/wstETH and R/DAI pools deployed on mainnet resulting in high TVL on Balancer. We expect it to generate a significant amount of volume which will be beneficial for all LPs and users of Raft

Audits:

Raft’s smart contracts have been audited twice:

  1. Trail of Bits audit - May 2023
  2. Hats Finance audit competition - May 2023

Links to pools:

Specification:

The Balancer Maxi LM Multisig eth:0xc38c5f97B34E175FFd35407fc91a937300E33860 will interact with the GaugeAdderv3 at 0x5efBb12F01f27F0E020565866effC1dA491E91A4 and call the addEthereumGauge function for each pool’s gauge with the following arguments:

R/wsteth: 0x6E7B9A1746a7eD4b23edFf0975B726E5aA673E21 which corresponds to the uncapped gauge for this pool.

R/DAI: 0x6F3b31296FD2457eba6Dca3BED65ec79e06c1295 which corresponds to the uncapped gauge for this pool.

2 Likes
2

Hello! Thanks for your proposal! I have a few questions:

  • What is the gauge % that you are looking for on these pools?
  • What is the expected starting liquidity on each pool?
  • Do you guys plan to incentivize voting? Perhaps using Aura? :wink:
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  • What is the gauge % that you are looking for on these pools?

Obviously targeting as much as we can but ultimately would like to end up with approx. 5%.

  • What is the expected starting liquidity on each pool?

Probably will be around $1m across the two pools which will be provided by Raft directly. We’re aiming to scale exponentially from there.

  • Do you guys plan to incentivize voting? Perhaps using Aura? :wink:

We expect significant sums to go towards emissions each month. Also, one of the pools will be co-incentivized with Lido.

Since Aura emissions are pretty volatile right now, it’s likely that the bribes will be split across Aura and direct incentives.

2 Likes
4

Hello,

Are you comfortable with a 2% cap to start? The cap can be changed after the fact so if incentives lead to your pool bumping up to the limit it is not an issue to increase it. This cap just seems fair to me given R’s info is not yet available on coingecko. If market cap is quite high please share; it would be out of the ordinary to not start at 2% otherwise.

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R isn’t live yet so there is no market cap. but given the fact that it’s a freely mintable stable with no initial supply cap and lido will be co-incentivizing I don’t see that a cap is necessary here. per the framework it’s uncapped due to being freely mintable.

2 Likes
6

https://snapshot.org/#/balancer.eth/proposal/0x314abfdf99ddc2e5ffc44d3ad0f2245783f4650c90f320a2c3d108ad25dca8bb

1 Like