[BIP-524] Seed BAL Liquidity on Optimism

PR with Payload

Introduction

In July 2022 the joint Balancer/Beethoven X deployment was launched on Optimism. Additionally, the Aura deployment on Optimism has been active since the summer of 2023 in collaboration with it. The TVL of the deployment is currently at ~$31M with a monthly increase of ~30% over the last three months.

This proposal seeks the approval to use BAL and wETH from the DAO treasury multisig to create BAL/wETH liquidity on the Optimism deployment.

Motivation

While BAL tokens are emitted as rewards to the joint Balancer/Beethoven X deployment and Aura users on Optimism, then currently the actual BAL liquidity on the chain for the users to trade against is low. Therefore we propose the seeding of BAL/wETH 80:20 pool on Optimism with $100k, which is deemed sufficient for the approximate $4k worth of BAL that is emitted every day on Optimism gauges at the current numbers. It is also in similar range as AURA liquidity on Optimism provided by Aura in the pool Beethoven X | AURA VILLAGE and BEETS liquidity provided by Beethoven X in the pool Beethoven X | Roast Beets.

Funds would be bridged to Optimism and deposited to a newly created BAL/wETH 80:20 pool Beethoven X | Keep the BAL rolling. Overall, we expect this action to improve the user experience of the liquidity providers significantly.

Risk Assessment

For the purpose of this proposal, ~$80k worth of BAL and ~$20k wETH will need to be bridged to Optimism and paired up as a BPT. Due to this the funds will likely incur some amount of impermanent loss, but since BAL price action is already strongly tied to ETH and the 80:20 pool structure efficiently lowers the amount of IL compared to 50:50 pool, then the overall effect of it is considered low and it is likely the trading fees negate any impact of it.

Technical Specification

The Balancer DAO Treasury Multi-sig 0x10a19e7ee7d7f8a52822f6817de8ea18204f2e4f will send $80k USD worth of BAL and $20k USD worth of wETH to the Maxi LM Multisig 0xc38c5f97B34E175FFd35407fc91a937300E33860, which will bridge the funds to LM multisig on Optimism: 0x09Df1626110803C7b3b07085Ef1E053494155089 using Stargate Finance bridge via WalletConnect.

After funds have arrived on Optimism, the LM multisig will deposit the funds into pool Beethoven X | Keep the BAL rolling.

Finally, the BPT tokens will be transferred to the DAO multisig to complete the transaction.

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https://snapshot.org/#/balancer.eth/proposal/0x23516280ee531f274f7106039066944b2159e3f9ff2a369614a8894c98ec6e03

The pool has been seeded here: OP Mainnet Transaction Hash (Txhash) Details | Optimism

BPT have been sent to the DAO Multisig on Optimism here: OP Mainnet Transaction Hash (Txhash) Details | Optimism

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