Summary and Motivation
As Balancer V3 has introduced boosted pools in a highly efficient way compared to the prior execution, there has been mass adoption by various parties of the product. While this is a great success, and we expect to see more projects leveraging boosted pools in the future, the operational arm of the Balancer Maxis needs to set precedent regarding redirection of external incentives. This proposal builds on the original incentive handling BIP-765.
Currently external incentives come from various lending markets on Balancer V3, namely Aave’s direct LM and Merit programs, Morpho’s LM campaigns and Euler. Given the nature of Aave and Morpho markets, and the likelihood of further lending markets such as Fluid, Venus, and potentially others having redirection requests, we propose to only execute redirection automation when pools are receiving >150 USD worth of incentives per week.
In some cases we are working on fully integrating the reward redirection into the existing underlying systems (e.g. Angle’s Merkl); in such cases redirection will not require a minimum USD threshold.
Technical Specifications
Currently the automation to claim, redistribute, and track LP position is done primarily by gosuto and Xeonus via the following repository where history of execution and logic can be found. The limiting factor will be based on the TVL of a given pool, the ratio of the boosted asset receiving external incentives, and the relative APR of that asset. In turn if any mixture of external incentives add up to over 150 USD, the pool will be eligible for having this redirection executed on its behalf. Epochs that do not meet the USD threshold will be considered dust and will be added to the next epoch as a bonus.