[BIP-354] Enable ETHx / bb-a-wETH Gauge [Ethereum]

BAL Gauges
1

PR with Payload

Summary:

This proposal is to create a gauge for ETHx / bb-a-wETH on Ethereum.

The pool shall use the ComposableStablePoolFactory-v4 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 remaining 35% goes to Balancer DAO as revenue.

References/Useful links:

Protocol Description:

This pool utilises ETHx 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:

This proposal aims to add a veBAL gauge for ETHx/bb-a-wETH on Ethereum.

One of Balancer’s strategic objectives is to attract more yield bearing liquidity. Incentivizing the yield bearing token ETHx through a gauge proposal presents an opportunity to attract depsits into the liquidity pool.

The primary pool for ETHx is to be on the Balancer Protocol. This further deepens the existing relationship with MaticX/bb-a-wMATIC and SD/wETH already deployed on Polygon and Ethereum respectively.

Launching ETHx with the bb-a-wETH linear pool will provide additional yield for Liquidity Providers. This is due to the Aave v3 wETH reserve generation 178 bps of deposit yield. Balancer DAO will earn revenue from ETHx and bb-a-wETH derived yield.

Specifications:

  1. Governance:

Please see the litepaper.

  1. Oracles:
  • rateProvider0 (for ETHx):[0xA35b1B31Ce002FBF2058D22F30f95D405200A15b](https://etherscan.io/address/0xA35b1B31Ce002FBF2058D22F30f95D405200A15b#writeProxyContract)
  • rateProvider1 (for bb-a-wETH): [0x60D604890feaa0b5460B28A424407c24fe89374a](https://etherscan.io/address/0x60d604890feaa0b5460b28a424407c24fe89374a#readContract)
  1. Audits:
  1. Centralization vectors:
  • Stader Governance, see here
  1. Market History:
  • ETHx is new and not yet integrated into Coingecko.
  • bb-a-wETH has a long successful history within Balancer protocol.
  1. Value:
  • This pool is a Core Pool and therefore will generate revenue for the DAO via ETHx and bb-a-wETH derived yield plus swap fees.

Pool Details

Link to Pool: 0x4CbdE5C4B4B53EBE4aF4adB85404725985406163
Link to Gauges: 0x9e3f4FB69058244066801404e50889592d33cA11

The Balancer Maxi LM Multisig eth:0xc38c5f97B34E175FFd35407fc91a937300E33860 will interact with the GaugeAdderv4 at 0x5DbAd78818D4c8958EfF2d5b95b28385A22113Cd and call the addGauge function with the following arguments:
gauge(address): 0x9e3f4FB69058244066801404e50889592d33cA11
gaugeType(string): Ethereum

Disclosure:

This proposal is the work of @Llama contributor, @Matthew_Graham, via the legal entity TokenLogic.

1 Like
2

Probably need to wait till more clarity on the protocol fee collection issue for gauge requests for such pools involving composableStable.

3

https://snapshot.org/#/balancer.eth/proposal/0x861dc390405e8d3ce583c3bc92597e85f91fa7fe7c747a0eb06a055ee269c9d2

4

Integrations team notes on ethX rate provider:

The ETHxRateProvider:
Is NOT upgradeable :white_check_mark:
Is NOT susceptible to donation attacks :white_check_mark:
Relies on off-chain data :warning:
The underlying Stader system that provides the data:
Is upgradeable :warning:
Upgrades filter through an OZ TimelockController contract :white_check_mark:
Controlled by a Gnosis Safe :white_check_mark:
With a 1-week minimum timelock :white_check_mark:
Collects price data from a majority of 7 trusted nodes (configurable to a minimum of 5) :white_check_mark:
Protects price data against atomic increases of more than 1% :white_check_mark:
Conclusion:
Upgradeable contracts sourcing price data from off-chain oracles is a pretty common design paradigm. It’s not as reliable as immutable on-chain primitives, but as long as reasonable protections are in place, it can be close enough.
In this case, Stader offers lots of protection against manipulation, so I would personally conclude that this rate provider is safe. Rather than trusting my own conclusion, I encourage you to examine the data points above and draw your own.

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