[BIP-853] Gauge proposal for the siUSD-sUSDe pool

BAL Gauges
1

PR with Payload

Summary

Proposal to add gauge support for the new siUSD/sUSDe Composable Stable pool on Balancer v3 for Ethereum.

References/Useful Links

Protocol Description

infiniFi Protocol

infiniFi is a decentralized fractional reserve staking system designed to improve financial stability and capital efficiency while aligning depositor incentives. It allows users to mint iUSD, a high-yield stablecoin backed by liquid and locked collateral. Depositors can choose lock durations to earn higher returns, enabling automated maturity laddering of reserves and reducing duration mismatch risksā€”challenges inherent in traditional banking.

Key features of iUSD include:

  • Fractional Reserve Design: Achieves higher yield across depositor segments by combining liquid and locked capital into duration-matched strategies
  • Depositor-Driven Allocation: Users determine how their funds are deployed, based on preferred liquidity timelines
  • Yield Optimization: Liquid deposits earn top DeFi rates, while locked positions gain amplified returns
  • Blockchain Transparency: Fully on-chain and governed by smart contracts, ensuring transparency and trustlessness

siUSD represents the staked version of iUSD, designed to capture native senior tranche yield and additional protocol incentives while maintaining the stability characteristics of the underlying iUSD token.

Ethena Protocol

Ethena is a synthetic dollar protocol built on Ethereum that provides a crypto-native solution for money not reliant on traditional banking system infrastructure, alongside a globally accessible dollar denominated savings instrument - the ā€˜Internet Bondā€™.

Ethenaā€™s synthetic dollar, USDe, provides a stable crypto-native solution for money achieved by delta-hedging staked Ethereum collateral. USDe is fully collateralized and free to compose throughout DeFi.

sUSDe is the staked version of USDe which earns yield from the protocolā€™s delta-neutral hedging strategies and has already seen extensive adoption across DeFi with over $100M in liquidity on various platforms.

Motivation

Introducing a gauge for the siUSD/sUSDe Composable Stable pool creates synergies between two innovative yield-bearing stablecoin ecosystems:

  • Yield Synergy: Both siUSD and sUSDe are yield-bearing by design, offering users a high-yield stable pair ideal for liquidity providers and DAOs seeking low-risk yield strategies
  • Enhanced Utility: Pairing siUSD with the established sUSDe creates immediate utility and arbitrage opportunities for both assets
  • DeFi Integration: Deep liquidity enables integrations with leverage protocols, yield vaults, and synthetic markets
  • Composable Infrastructure: Balancerā€™s programmable infrastructure provides the ideal venue for these sophisticated stablecoin protocols

A gauge will accelerate TVL growth and establish this pool as a primary DeFi liquidity venue for both protocolsā€™ users.

Specifications

1. Governance

infiniFi: Governed by smart contracts with a future pathway toward DAO-managed control over key parameters and reserve deployment logic. Depositors drive asset allocation through bonding preferences, creating transparent and market-driven governance outcomes.

Ethena: Currently operates with a multi-signature wallet featuring doxxed founding contributors. The protocol is planning to decentralize strategy management to token holders and transition to decentralized governance in the future.

2. Oracles

infiniFi: Leverages on-chain DeFi markets such as Aave and Compound for asset yields. Pricing for redemptions and collateral values is computed via verifiable on-chain mechanisms. The system currently does not rely on off-chain oracles but may integrate oracle feeds (e.g., Chainlink) for advanced features.

Ethena: The system relies on real-time price feeds from multiple sources including CeFi exchanges (Binance, Bybit, OKX, Deribit), Pyth, and Redstone for managing delta-hedging positions and ensuring system integrity.

3. Audits

infiniFi: Has undergone comprehensive security audits by leading firms including Certora, Spearbit, and Cantina

Ethena: Has undergone security audits by Spearbit & Cantina

4. Centralization Vectors

infiniFi: Non-custodial and fully on-chain. All deposits, locks, and allocations are governed by smart contracts. There is no reliance on centralized intermediaries or off-chain execution, minimizing centralization risks.

Ethena: While the protocol uses centralized exchanges for hedging, the core protocol remains decentralized with transparent on-chain mechanics and plans for full decentralization.

5. Market History

This represents a new innovative pairing between two established yield-bearing stablecoin protocols. sUSDe has demonstrated strong market adoption with significant liquidity across DeFi platforms, while siUSD brings additional utility through infiniFiā€™s fractional reserve mechanics.

6. Value

This pool will serve as a primary DeFi liquidity hub for both siUSD and sUSDe, enabling:

  • Enhanced yield strategies for liquidity providers
  • Arbitrage opportunities between the two ecosystems
  • Composable infrastructure for future protocol integrations
  • Deepened liquidity for both token ecosystems

Technical Specification

The Balancer Maxi LM Multisig 0xc38c5f97B34E175FFd35407fc91a937300E33860 will interact with the GaugeAdderv4 at 0x5DbAd78818D4c8958EfF2d5b95b28385A22113Cd and call the addGauge function with the following arguments:

Pool Address: 0x071828ACC755314E687448703775F22194f56867

  • gauge(address): 0xB1EFE3B01D5Cf28Bd923de3E5a567621588F435a
  • gaugeType(string): Ethereum
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Edit by Maxis:

  • Assign BIP ID
  • add payload PR
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https://snapshot.box/#/s:balancer.eth/proposal/0x04e48c9f065d88b1737a2a892621f768254391a0b28a67d132ff41b3b976acbc

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