[BIP-539] Enable GHO/USDC E-CLP & GHO/GYD E-CLP Gauges

PR with Payloads

Summary

@TokenLogic and @karpatkey proposes creating three new gauges and cancelling one unused gauge.

Three new pools:

GHO/USDC E-CLP - Range: -70bps to 30bps
GHO/USDC E-CLP - Range: -110bps to 30bps
GHO/GYD E-CLP - Range: -110bps to 30bps

Depending on the performance of GHO, the Aave Liquidity Committee (ALC) will allocate rewards to the various GHO pools.

References/Useful links

GHO

GYD

Protocol Description

GHO & Aave Protocol
The Aave Protocol is a decentralized liquidity protocol that is deployed across many EVM compatible networks including but not limited to Optimism, Arbitrum, Avalanche and Polygon. Currently, the Aave Protocol has a TVL of approximately $10.7 Billion.

GHO is a decentralized multi-collateral stable coin that is fully backed, transparent and native to the Aave Protocol.

USDC
USDC is a digital dollar, also known as a stablecoin, that’s available 24/7 and moves at internet speed. USDC lives natively on the internet, running on many of the world’s most advanced blockchains. Billions of USDC change hands every day1, and every digital dollar of USDC is always redeemable 1:1 for US dollars. - Circle

GYD
GYD is an all-weather stablecoin that provides one-stop access to stablecoin risk control. GYD is fully backed by a set of assets with fundamental innovations in risk control built in at the protocol level to automate diversification and redundancy.

These innovations include automated risk diversification rules, optimized minting and redemption design that guides the protocol on how to use reserve assets to maintain stability, and multiple layers of redundancy in price feeds and circuit breakers.

Motivation

This proposal aims to add three veBAL gauges and cancelling one unsed gauges.

New Gauges
GHO/USDC E-CLP - Range: -70bps to 30bps
GHO/USDC E-CLP - Range: -110bps to 30bps
GHO/GYD E-CLP - Range: -110bps to 30bps

Unused Gauges
wETH/GHO - 80/20

Specification

  1. Governance:
  • AAVE, aAAVE and stkAAVE serve as the governance tokens for the Aave DAO. Holders can vote on proposals at both a Snapshot level and through the Aave DAO on-chain governance portal.
  1. Oracles:

No rate providers are used.

  • rateProvider0 (for GHO): 0x0 (none)
  • rateProvider1 (for USDC): 0x0 (none)
  • rateProvider0 (for GYD): 0x0 (none)
  1. Audits:

Aave v3

GHO

  • Sigma Prime

  • Sigma Prime

  • ABDK

  • OpenZeppelin-v2

  • OpenZeppelin-v1

  • GYD*
    Audit reports by Nethermind, Trail of Bits, and Runtime Verification can be accessed here (the E-CLP is called the “CEMM” in these reports). In addition, the E-CLP code has been live in production on Polygon since November 2022.

  1. Centralization vectors:
  • Aave Governance is decentralized, and all changes must go through a transparent and well-tested governance process.

  • Circle is a centralised entity with control over which addresses can transfer there stable coin.

  • Gyroscope’s GYD, no centralization vectors.

  • The E-CLP Pool type, the FTL Labs team’s multi-sig can - currently - pause the pool, change the swap fee and set the protocol fee.

  1. Market History:
  • USDC is widely used across many liquidity pools.
    GHO and GYD have limited market history
  1. Value:
  • This pool is expected to drive meaningful TVL to Balancer and Aura Finance. The assets within the pool are not yield bearing. However, the DAOs will generate revenue from receiving a portion of the swap fees.

Pool Details

Link to Pool: GHO/USDC Pool - Range: -70bps to 30bps - 0x3932b187f440cE7703653b3908EDc5bB7676C283
Link to Gauges: B-GHO-USDC - 0xa2F8bd6B95a0cB9094206075504CD0ED1Cc717Be

Link to Pool: GHO/USDC Pool - Range: -110bps to 30bps - 0x99e7b15df044e1b62e2e1774fD4469d54D9409aC
Link to Gauges: B-GHO-USDC - 0x80AeF246F9926B52622f4e74cdc7Acb5C4344FfE

Link to Pool: GHO/GYD Pool - Range: -110bps to 30bps - 0xaA7a70070E7495fe86c67225329DbD39BAa2F63b
Link to Gauges: B-GHO-GYD - 0x4a7475D32CCD29edD65b2a1712b091aA741ba9BB

Transaction: 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):0xa2F8bd6B95a0cB9094206075504CD0ED1Cc717Be
gaugeType(string): Ethereum

gauge(address):0x80AeF246F9926B52622f4e74cdc7Acb5C4344FfE
gaugeType(string): Ethereum

gauge(address):0x4a7475D32CCD29edD65b2a1712b091aA741ba9BB
gaugeType(string): Ethereum

Disclosure

This proposal is the work of Tokenlogic and karpatkey who are both Service Providers and delegates within the Aave Ecosystem.

7 Likes

Very exciting to see the collaborations between multiple teams utilizing Balancer Technology to spearhead efficient liquidity management. E-CLPs have proven their unique PMF for both stablecoins and liquid-staked tokens, I’m excited to see the technology tailored for GHOs liquidity profile.

Full support.

5 Likes

Hey all, this is Steffen from Superluminal Labs, a devco in the Gyroscope ecosystem. We developed the ECLP and we worked with TokenLogic and karpatkey to find pool configurations that made sense for GHO going forward.

The three pools proposed here are the result of this work. The two different pool configurations (narrow: -70bp to +30bp and wide: -110bp to +30bp) account for GHO’s historic trading below 1 but also its move up towards peg after the launch of stkGHO (currently at -50bp). Having two trading curves is useful because incentives and liquidity can relatively quickly be moved from one curve to the other, depending on how the GHO price develops going forward.

The pools make use of a few features of the ECLP (asymmetric price ranges and configurable concentration within the price range) to put the liquidity where it is needed, with the goal of maximizing capital efficiency at a liquidity profile that makes sense for these pairs. We believe that these pools will help Balancer integrate GHO as an asset and attract new volume.

The below chart shows the liquidity profiles of the two pool parameterizations (i.e., “at which prices does the pool put more/less liquidity?”).

The x axis is the GHO/USDC (or GHO/GYD) price in bp from 1 and the y axis is a measure of liquidity-at-price that we call “liquidity density”. This is the marginal amount of the other asset (USDC or GYD) that can be traded while moving the pool price by at most 1bp. The Y axis is scaled to a TVL of 1M but this is of course only for illustration. I also plotted two StableSwap curves at the same TVL for comparison.

6 Likes

I am also very excited to see more Gyroscope products launch on Balancer! I also appreciate a lot the explainer by @s19r how ranges are set up given historic trading was <1. It will also be exciting to see how GHO further develops with stkGHO :slight_smile:

5 Likes

https://snapshot.org/#/balancer.eth/proposal/0x17f384e65b19dbab64f1c8d58299f35efc712c45f8d3b4c360a7b7d2ec326395

1 Like