# \[BIP-513\] Seed BAL Liquidity on Avalanche **URL:** \ **Category:** General Proposal\ **Created:** [December 13, 2023, 8:20pm UTC](https://forum.balancer.fi/t/bip-513-seed-bal-liquidity-on-avalanche/5421 "2023-12-13T20:20:35Z")\ **Posts on this page:** 3\ **Page:** 1
**Author:** ![Xeonus](https://yyz1.discourse-cdn.com/flex027/user_avatar/forum.balancer.fi/xeonus/32/3621_2.png) [@Xeonus](https://forum.balancer.fi/u/Xeonus)\ **Post date:** [December 13, 2023, 8:20pm UTC](https://forum.balancer.fi/t/bip-513-seed-bal-liquidity-on-avalanche/5421/1 "2023-12-13T20:20:35Z")
### PR with Payload > > > \- Transfer 20'000 USDC and 19'950 BAL to the LM multisig for further processing > … > \- Tenderly-sim: https://dashboard.tenderly.co/public/safe/safe-apps/simulator/789217e4-d336-48f8-ab78-7b5c75729b30 # Introduction Earlier this year, governance has approved to [deploy Balancer on Avalanche](https://snapshot.org/#/balancer.eth/proposal/0xfac459b1f0ce7eec8965814a062a3eac195b5988990ae7a6a59e4022304837c3) After a bootstrapping phase where [an initial set of gauges was added](https://snapshot.org/#/balancer.eth/proposal/0x6459a7430d378236892af46e14afbecb56f51a81cd8e48b92e8a5774a919d7d6) the deployment is now at a much more mature state with approximately $7mln in TVL and $400k in daily trading volume. Furthermore, BAL emissions are flowing to major AVAX LST pools that are also part of our core pool framework. However, currently, no deep liquidity exists for BAL to trade with on Avalanche. # Motivation Given the lack of BAL liquidity on Avalanche, we propose to seed $100k in BAL/WAVAX liquidity in a 80:20 [pool](https://app.balancer.fi/#/avalanche/pool/0xa39d8651689c8b6e5a9e0aa4362629aef2c58f55000200000000000000000038) on Avalanche so that protocol participants can trade against a core pair. This liquidity will be provisioned from the DAO treasury on mainnet. Funds will be bridged to Avalanche and deposited to a newly created BAL:WAVAX 80:20 pool. At the time of the writing of this proposal, approximately $5k worth of BAL is emitted every day on Avalanche gauges. Therefore, a base liquidity of at least $100k is sufficient to provide a solid trading pair without too much slippage.This core liquidity pool will help participants to trade against WAVAX and therefore reduce friction of non-existent BAL liquidity. This measure should therefore improve UX for LPs and autocompounders significantly. Examples of provisioning of 80:20 pools for other assets like Aura showed success on deployments like OP: [https://op.beets.fi/pool/0x2f6b6973f38381fe453ea819b7e0f0897adeaae7000200000000000000000113](https://op.beets.fi/pool/0x2f6b6973f38381fe453ea819b7e0f0897adeaae7000200000000000000000113) # Risk Assessment Following risks may arise when provisioning liquidity on AVAX: - Incurring losses while trading or provisioning liquidity - Incurring impermanent loss by providing BAL against a non-ETH related asset like AVAX. Incurring losses while trading or provisioning liquidity As the DAO doesn’t hold any WAVAX liquidity, it needs to trade it on the open market. We suggest that USDC shall be traded by the LM Multi-sig on Avax that will use aggregators like 1inch to facilitate the trade and reduce price impact from trading USDC to WAVAX. The final BPT position shall then be transferred to the multi-sig to complete the transactions Incurring impermanent loss by providing BAL against a non-ETH related asset like AVAX One of Balancer’s core strengths is to provision a 80:20 pool to reduce IL. To demonstrate, we can sketch out certain extreme scenarios where AVAX price would appreciate much more compared to BAL price. In such a scenario, we would incur so called impermanent loss on our position which describes the loss of value of the underlying assets in the pool compared to when the assets were simply held. We can use a tool like our IL calculator [https://balancer.tools/impermanentLoss](https://balancer.tools/impermanentLoss) to simulate following scenario: | Token | Price start | Price End | Difference (%) | | --- | --- | --- | --- | | BAL | 4 | 6 | 50 | | AVAX | 35 | 100 | 185 | Given this scenario for an investment of $100k we would incur IL of approx 3.7%. It is safe to assume that this pool will get at least 5% of trading fee rewards, which would negate any impact of IL. ![](https://canada1.discourse-cdn.com/flex027/uploads/balancer/original/2X/2/230b9c72116686b916aed2e568bf0e963c58b45f.png) Source: [https://balancer.tools/impermanentLoss](https://balancer.tools/impermanentLoss) We therefore conclude that IL always plays a role but should not affect any significant losses to the DAO in this configuration. # Technical Specification The Balancer DAO Treasury Multi-sig `0x10a19e7ee7d7f8a52822f6817de8ea18204f2e4f` will send 20,000 USDC and $80k USD worth of BAL (real amount at time of writing) to the Maxi LM Multisig `0xc38c5f97B34E175FFd35407fc91a937300E33860` which will bridge the funds to the LM Multisig on AVAX: `0x326A7778DB9B741Cb2acA0DE07b9402C7685dAc6` using Stargate Finance bridge via WalletConnect. After funds have arrived on Avalanche, the LM multi-sig on Avalanche will trade $20k USDC to WAVAX on 1inch. A total of approx. $100k of BAL and WAVAX will be deposited into pool [0xa39d8651689c8b6e5a9e0aa4362629aef2c58f55](https://app.balancer.fi/#/avalanche/pool/0xa39d8651689c8b6e5a9e0aa4362629aef2c58f55000200000000000000000038) Finally, the BPT token will be transferred to the DAO Multi-sig to complete the transaction. ---
**Author:** ![Xeonus](https://yyz1.discourse-cdn.com/flex027/user_avatar/forum.balancer.fi/xeonus/32/3621_2.png) [@Xeonus](https://forum.balancer.fi/u/Xeonus)\ **Post date:** [December 21, 2023, 6:42am UTC](https://forum.balancer.fi/t/bip-513-seed-bal-liquidity-on-avalanche/5421/2 "2023-12-21T06:42:46Z")
[https://snapshot.org/#/balancer.eth/proposal/0xf5e1d90f47596bbe84657b78780c3ac8fceac6d7da8e1720926e1168c2ad7fad](https://snapshot.org/#/balancer.eth/proposal/0xf5e1d90f47596bbe84657b78780c3ac8fceac6d7da8e1720926e1168c2ad7fad) ---
**Author:** ![Xeonus](https://yyz1.discourse-cdn.com/flex027/user_avatar/forum.balancer.fi/xeonus/32/3621_2.png) [@Xeonus](https://forum.balancer.fi/u/Xeonus)\ **Post date:** [January 15, 2024, 9:52pm UTC](https://forum.balancer.fi/t/bip-513-seed-bal-liquidity-on-avalanche/5421/3 "2024-01-15T21:52:32Z")
Liquidity has been successfully seeded as per specification on this pool: [Balancer](https://app.balancer.fi/#/avalanche/pool/0xa39d8651689c8b6e5a9e0aa4362629aef2c58f55000200000000000000000038) Seeding tx: [Transaction Details - Snowtrace](https://snowtrace.io/tx/0x7fb9b3749ab6635bdb50654c89ddb38e6239cc5db22db9f3a2f0359685ddb294)