PR with Payload
Summary:
This proposal aims to approve the creation of four new gauges on main net with a 2% cap:
- baoETH-wsETH
- baoETH-rETH
- baoUSD-sUSD
- baoUSD-sDAI
References/Useful links:
Link to:
- Website: https://www.baofinance.io/
- Documentation: Welcome to Bao Finance | User Docs
- Github Page• Bao.Finance · GitHub
- Communities• Bao Finance, x.com
Protocol Description:
Bao Finance is a community-run project creating onchain tokenized derivatives (synths) and infrastrcture. Our current synths, baoUSD and baoETH, are backed by ETH based debt positions via our vaults.
BaoETH is minted by whitelisted contracts, which currently are “the fed” and “ammFED” (AMO). The Bao multisig has control over which contracts are whitelisted. Changes are approved via governance.
The fed mints synths into our borrow vaults, ready to be borrowed against highly liquid & decentralized ETH based collaterals such as wstETH and rETH. Controlling the available supply also affects the variable loan interest rate, helping maintain the peg.
The ammFED mints synths directly into balancer liquidity pools containing a backing asset, helping to maintain the peg and profiting from peg deviations.
Motivation:
Bao has made Balancer our primary source of liquidity for our synths. We have recently adapted our strategy to help with volume and participation from liquidity providers, which includes creating new liquidity pools with the most liquid yield bearing assets we can use in stable pools.
Specifications:
Governance: Bao is governed by the Bao community. Actions voted on are carried out by the community “council of guardians” via its 3/7 multi-sig. This multisig/ council of guardians controls various synth parameters like the mint limit and collaterals. We plan on using governor bravo or similar in the future to improve decentralization.
Oracles: Chainlink oracles are used to find collateral prices.
Audits: Bao re-uses battle-tested compound, inverse and curve with some changes & has had bug bounties open on immunefi for several years covering all of our live contracts.
Centralization vectors: The 3/7 multisig controls various parameters such as collateral factors, IMF factor (CF factor reduces as loan size increases), liquidation incentive, ability to deposit collateral, price oracle, new collateral additions, mint limits and the ammFED.
Market History: All Bao’s synths have remained closely pegged to their target prices since inception and have robust mechanisms to help stay pegged. The one historically exception to this was a temporary depeg of baoUSD during USDC’s depeg. Since then all synths no longer accept USDC as collateral, relying on decentralized, highly liquid ETH backed tokens like wstETH, rETH and LUSD instead.
Value: Balancer will benefit through trading fees and increased voting incentives for BAL and AURA holders. Bao has a track record of providing vote incentives and building governance power within the Balancer ecosystem.
baoETH-wstETH:
- pool: 0x8296057edb832feac03269e9fce8304ebcbabcaf
- gauge: 0x001EDF44D8aa79922dBE74f57C703EbCe2E13B43
baoETH-rETH:
- pool: 0xabc7d08ef73fe3fb67efd900f4471cca788b0899
- gauge: 0x80f129622dC60f5A7De85cBc98F7e3a99b09E57f
baoUSD-sUSDe:
- pool: 0x79AF734562f741946566D5126bBDed4Cb699E355
- gauge: 0xF91BA601c53F831869DA4aCeAAEc11c479413972
baoUSD-sDAI
- pool: 0xC5B3F108024da9776D024fD9CEFa4b48e021f1A2
- gauge: 0x17753fC89894A5eBD8b327F7d6121038e9240437
Technical Specification
The Balancer Maxi LM Multisig 0xc38c5f97B34E175FFd35407fc91a937300E33860 will interact with the GaugeAdderv4 at 0x5DbAd78818D4c8958EfF2d5b95b28385A22113Cd and call the addGauge function with the following arguments: gauge(address):0x001EDF44D8aa79922dBE74f57C703EbCe2E13B43
gaugeType(string): Ethereum
gauge(address):0x80f129622dC60f5A7De85cBc98F7e3a99b09E57f
gaugeType(string): Ethereum
gauge(address):0xF91BA601c53F831869DA4aCeAAEc11c479413972
gaugeType(string): Ethereum
gauge(address):0x17753fC89894A5eBD8b327F7d6121038e9240437
gaugeType(string): Ethereum