[BIP-600] Enable Gauge for paUSD/GYD Pool with a 2% cap (Ethereum)

BAL Gauges
1

PR with Payload

Summary:

Enable a Balancer gauge for the paUSD/GYD (ECLP-paUSD-GYD) E-CLP with a 2% cap on Ethereum.

paUSD is crypto-backed USD stablecoin issued by the Parallel Protocol.

GYD is fully backed by a set of assets and issued by the Gyroscope Protocol.

The pool is an Elliptic Concentrated Liquidity Pool (E-CLP). E-CLPs are custom pools from Gyroscope built on top of Balancer’s pool architecture. They enable trading along the curve of an ellipse. This pool type is ideally suited for stablecoins and liquid staking tokens; is typically more capital efficient and could thus generate significant trading volume.

References/Useful links:

Parallel Protocol (prev. Mimo Protocol):

Link to:

Gyroscope Protocol:

Link to:

Protocol Description:

Parallel Protocol

The Parallel Protocol (prev. Mimo Protocol) is a Collateralized Debt Position (CDP) protocol deployed on Ethereum, Polygon and Fantom. Stablecoins (PAR & paUSD) are decentralized (controlled by vMIMO holders), non-custodial, overcollateralized, and fully redeemable synthetic asset pegged to the Euro/USD fiat currency.

Gyroscope Protocol

Gyroscope is a decentralized stablecoin featuring a novel all-weather stablecoin design combined with more efficient stablecoin liquidity pools.

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:

The role of the paUSD/GYD E-CLP pool is to increase the stability of paUSD, the on-chain liquidity of both paUSD and GYD, connect the Parallel and Membrane ecosystems and providing a fiat gateway to paUSD & GYD holders on Ethereum. Together, these 4 points allow for building a Bonds DeFi ecosystem.

The capital efficiency of E-CLPs will help to quickly bootstrap a liquidity network for paUSD & GYD. This hub-and-spoke network will enable a liquid secondary market for paUSD & EUROe to make it easier to exit from/ enter into paUSD & GYD.

By using E-CLPs a comparably small amount of initial capital can provide a disproportionately deep market for paUSD & GYD. The E-CLP’s efficiency gains are possible due to:

  • Customizable liquidity profiles: Using the curve of an ellipse enables highly customizable liquidity profiles. E-CLPs can be calibrated to approximate most trading curves that would be desired. E-CLP curves can be tailored to have certain regions of low price impact and other regions of high price impact.
  • Price bounds: The E-CLP concentrates liquidity within price-bounds that enable the E-CLP to be highly capital-efficient. Functionally, this works by enabling arbitrary truncation of liquidity profiles from a given trading curve. In effect, the capital efficiency comes from bounding the trading curve to an expected trading range of the assets.

A few notes:

  • PAR (the Parallel EURO stablecoin) already have a gauge on Balancer Polygon: 2eur (PAR)
  • paUSD (the Parallel USD stablecoin) already have a gauge on Balancer Ethereum: e-cs-kp-USD
  • Mimo Labs has started building positions in AURA (±557k $vlAURA) & BAL and the Parallel Protocol treasury currently holds 23k $vlAURA.
  • Mimo Labs is still buying AURA which will be locked to incentivize the liquidity.
  • MIMO (the Parallel governance token) already gauges on Balancer Ethereum & Polygon: p-MIMO/WETH 80/20 / MIMO/WETH 80/20

Specifications:

  1. Governance:
  • Parallel Protocol: none on-chain governance (vote via snapshot) and decisions are executed through a ⅝ multi-sig (4 team members and 4 dao members elected by vMIMO holders).
    • Polygon PoS: 0x2046c0416A558C40cb112E5ebB0Ca764c3C5c32a
    • Ethereum: 0x25Fc7ffa8f9da3582a36633d04804F0004706F9b
    • Fantom: 0x174162ddecE9d0b7B68fd945e38c3372C4C818ba
  • Gyroscope Protocol: The Gyroscope Protocol is governed by the DAO and relevant stakeholder. The FTL Labs multi-sig can pause the pool, change the swap fee and set the protocol fee. As a custom pool by Gyroscope, the E-CLP will be controlled by Gyroscope governance upon its launch.
  1. Oracles:
  • Parallel mainly uses Chainlink price feeds for all its collateral assets.
  • GYD The FTL Labs team’s multi-sig can - currently - pause the pool, change the swap fee and set the protocol fee.
  1. Audits:
  1. Assets & Centralizing vector:
  • paUSD has a debt limit on each collateral, is partially collateralized by USDC and the ownership of the Parallel protocol and is held by a 5/8 multisig with 4 signers from Mimo Labs and 4 signers elected by vMIMO holders.
  • GYD: Backing assets are stablecoins deployed in certain strategies such as yield-generating sDAI and USDC in Flux (Which can be vectors of centralization), and also support automated market-making (AMM) strategies like LUSD and crvUSD.
  1. Market history:
  • paUSD has been live since September 2023 (on Ethereum); paUSD is soft pegged to USD.
  • GYD has been live since November 2023 (on Ethereum); GYD is pegged to USD.
  1. Value:
  • The paUSD/GYD E-CLP pool will act as the main route for arbitrages and the use cases mentioned above (on-chain liquidity, etc.).

Contracts

Technical Specifications

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): 0x30cEE2F8Cb8e53FC587f6B2578241a118188D530
gaugeType(string): Ethereum

The Balancer DAO Multisig 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f will interact with the Authorizer 0xA331D84eC860Bf466b4CdCcFb4aC09a1B43F3aE6 calling grantRole with the following arguments:
role: 0xae60dce27f51ce5815357b9f6b40f200557867f8222262a1646c005d09b7dfba
This role corresponds to setRelativeWeightCap(uint256) on mainnet gauges and can be confirmed here balancer-deployments/action-ids/mainnet/action-ids.json at de8c3a52cb62185469dbbc90589afa83e5490760 · balancer/balancer-deployments · GitHub.
account: 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f

The Balancer DAO Multisig 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f will interact with the AuthorizerAdaptorEntryPoint at 0xf5dECDB1f3d1ee384908Fbe16D2F0348AE43a9eA and call performAction with
target: 0x30cEE2F8Cb8e53FC587f6B2578241a118188D530 being the paUSD/GYD root gauge and data 0x10d3eb0400000000000000000000000000000000000000000000000000470de4df820000 to set the cap to 2%
The Balancer DAO Multisig 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f will interact with the Authorizer 0xA331D84eC860Bf466b4CdCcFb4aC09a1B43F3aE6 calling revokeRole with the following arguments:
role: 0xae60dce27f51ce5815357b9f6b40f200557867f8222262a1646c005d09b7dfba
account: 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f to revoke the previously assigned role to change gauge weights.

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https://snapshot.org/#/balancer.eth/proposal/0xf8da29ca59cf268f4ae3555757ef184cd8e18592e269836089bc8f74b2709e88

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