Gauge Proposal Template:
This pool uses the new weighted pool factory which allows us to apply the protocol fee to yield bearing tokens. This gauge would enter as a “core pool” under BIP-19, meaning protocol fees earned by this pool would be used to bribe for votes on it. In addition, any LDO collected by the
ProtocolFeeCollectorwould also be used to bribe for votes on this pool. There is a small LDO pool which contributes regular protocol fees so this will allow Balancer to boostrap initial liquidity and kickstart the flywheel here.
wstETH is liquid staked ETH. LDO is the governance token.
Balancer already has significant wstETH liquidity and this pool is regularly our #1 contributor to protocol fees. The goal with this pool is to stimulate additional trading activity with wstETH, thus making our pile of wstETH liquidity even more valuable to the protocol. Given LDO holders are likely already holding wstETH, this is a natural first pairing to pursue. LDO liquidity has also proven to be a good revenue generator for us as well - it is logical that encouraging more of it should be a good thing.
Governance: Find more information about governance on Lido’s forum.
Oracles: This pool relies on a rate provider for wstETH which Balancer has been using already for awhile. See here.
Audits: See here.
Centralization vectors: See here for information on this.
Market History: See here.
Value: Balancer will earn the protocol fee on wstETH yield. Our existing small LDO pool already generates significant protocol revenue, thus it stands to reason we should earn more revenue if we can attract more LDO liquidity. By paring with wstETH we also encourage more wstETH trading activity and since wstETH/ETH is one of our largest pools, any increase in trading activity will make wstETH liquidity even more profitable for us.