[BIP-98] Fjord (Formerly Copper) and Balancer Exclusive Partnership

Summary: Fjord and Balancer to become exclusive partners for LBPs. This exclusive partnership would include ERC-20s, NFTs, and new LBP use cases. Balancer to support the Fjord team with a grant of $500k USD (paid in BAL) and a new rev share to be implemented at the conclusion of the current agreement that will maintain long term alignment.

Co-authors: Fjord Team (Ri, PK, Evan, Odin, Kryptachio, Truss)

Fjord (Copper) Progress to Date:

Fjord has supported nearly $1.5b in LBP volume across Ethereum, Polygon, Arbitrum, and Avalanche since September of 2021 (and hopefully on BNB very soon).

  • Fjord has supported 100+ LBPs across large well capitalized projects to small community projects. Projects supported include DAOs, guilds, gaming, defi projects, and more.

  • Since Fjord began collecting revenue at the end of December 2021, nearly $1.6m in cash value has been distributed to the BalancerDAO wallet and under the current agreement Fjord provides 30% of Fjord revenue to the Balancer DAO.

  • Fjord has strongly pushed for projects to keep liquidity on Balancer post LBP with some success, leading to further revenue and relationship opportunities.

  • Fjord launched the first of its kind, LBPs for NFTs. While still in early stages, the team has high hopes to increase the Fjord user base and attractiveness of the platform by growing the NFT side of the house and to bring NFTs into the Balancer ecosystem.

  • Fjord has seen a significant draw down of LBPs given the challenging market and while building the treasury to survive such down turns, has been required to engage in a large rebrand and faces significant legal and operational hurdles which have impacted runway.

  • Fjord has significantly reduced monthly wages to extend our runway, but this path is not sustainable for the long term. From its current treasury, Fjord faces significant incorporation costs, blockchain analytics AML costs, and ongoing legal costs.

Purpose / Motivation:

The Fjord team highly values our relationship with Balancer (and the community) and would like to continue in furthering the reach of the Balancer Protocol. This has been a great relationship for both parties and we hope to build new use cases as well as strengthen the ones we have already proven viable.

To further diversify our portfolio, Fjord has moved into NFTs and is preparing to launch additional use cases for LBPs. We view NFTs as a strong pipeline for new users to flow into web3, and we want to position ourselves to capture significant market share, much in the way LBPs did for ERC-20s.

As we approach the conclusion of the current revenue share agreement between Fjord and Balancer, the Fjord team would like to further strengthen our relationship by entering into an exclusive partnership with Balancer and Fjord. Our team will continue to build upon LBPs for ERC-20s, NFTs, and develop new use cases which will broaden the reach of Balancer.

Specification:

As the Fjord team continues to build through this bear market, we would request the following grant to help fund our team to include the increasing legal and operational costs we face given the current environment. Fjord requests a grant of $500k USD (to be paid fully in BAL) over the course of six months to support ERC-20 and NFT LBPs development from Q4 2022 through Q1 2023.

  • Key Milestones and Fjord Focus:

    • Refine NFT LBP drops on Balancer
    • Develope KYC type integration or other whitelisting solutions for LBP participation (adding optionality for teams)
    • Release MVP of new LBP use case(s)
    • Create a Fjord blog to increase user retention (among other features planned to increase retention and community growth)
    • Enable one-click movement of liquidity from Fjord to Balancer
  • Balancer Feature Support:

    • Link to Fjord as the LBP partner for ERC-20s / NFT LBPs from Balancer’s UI
    • Collaborate closely on developing NFT solutions and extending LBP use cases and functionality
    • Enable 0 collateral LBPs
    • Conduct marketing support to promote our exclusive partnership, the release of new use cases, and increasing general awareness of Fjord Foundry and Fjord NFTs
  • Grant Funding:

    • 80% of funding to be paid in Bal on a monthly basis
    • 20% of funding to be paid in veBAL to be locked for 1 year from the date of exclusivity
  • Rev Share:

    • At the expiration of the current rev share (Feb 13, 2023), 30% rev share will remain in place until $500k in rev share to the DAO is met
    • From the date $500k is returned, the rev share will remain at 30% for six months
    • At the end of the six months, the rev share will be negotiated on an annual basis to maintain long term alignment between Balancer and Fjord

We think this rev share provides long term alignment, for if we have returned $500k this would mean ~$80mm would have been raised by LBPs (assuming 2% fee), and for $80mm to be raised this likely means we are no longer in a bear market (this could easily be 2 years from now).

The additional six months at 30% from this point provides Balancer with the upside over this same likely bull market time period.

Grant allocation breakdown:

*** Legal:**

  • In-house work for the next 1-2 months is expected to be more intensive, ~ 15 hours / month. Fjord has a planned execution framework with Cayman Council as well as advice from US counsel, but requires more nuanced crypto specific support

  • Once the legal foundation is up and running, the team expects legal needs to sustain at 1 to 1.5 hours per week. This would include liaison support with outside counsel and feedback on legal implications of product decisions

  • Entity structuring costs to build for resiliency

*** Marketing:**

  • Video production of an educational series of videos for B2B clients and participants in LBPs, Fair NFT drops and the new use cases we are exploring

  • Social media growth and investing in various forms of content

  • Hosting of and attendance of prominent web3 events to network

  • PR opportunities

  • Search Engine Optimisation

Specification

If approved, the DAO Multisig 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f will send 77,000 BAL to the Grants Multisig 0xE2c91f3409Ad6d8cE3a2E2eb330790398CB23597 who will handle the payments to Fjord according to the schedule outlined in the proposal.

2 Likes

https://snapshot.org/#/balancer.eth/proposal/0xcc065f373e15a264e1647bc794a4a83039fc4d377a69875ec828eb0148faa4ba

First off, big fan of working with the Fjord/Copper team. And as per most of my forum activity, I’m only seeing this now that it’s been posted to snapshot, so shame on me for not checking the forums…

…but what exactly is an “exclusive partnership” for a pool factory that literally anyone can deploy a pool from? In my eyes, this proposal doesn’t define the partnership well enough to explain the terms of the agreement. What, who, and how does this partnership exclude? Is this purely frontend/marketing? Something else?

As far as BAL distributions go, is that going to be a price determined at the beginning of 6 months, or is the BAL going to be dynamically allocated based on a moving average?

And of course, all opinions my own

1 Like

@gerg From the grants / distribution side i understand the set amount of BAL to be 77000 mentioned in the proposal earmarked for Fjord to receive. 20% up front to lock and then the 80% divided over 6 months paid out at the end of each month starting from the approval date. Up or down price action comes with the territory of this agreement, that is at least how the grants team has been handled over the previous and current wave. To not over extend ourselves in cases of downward price action.

1 Like

Hey gerg, great points thanks for raising them. I’ve added more detail which hopefully answers your thoughts:

As to the “exclusive nature”. Yes, anyone can launch an LBP, and we do not expect Balancer to block creation outside of our UI, but:

  • Fjord is Balancer’s recommended platform for LBPs
  • Balancer’s UI will display Fjord as the way to deploy a pool for ERC20s/NFTs/and other pool types that are developed
  • Fjord will not deploy similar style pools on other protocols, and will work specifically with Balancer for future offerings
  • Fjord and Balancer will work together to expand to other chains (like with BNB)
  • Fjord and Balancer will exclusively collaborate to enhance the current LBP offering
  • Fjord nor Balancer will expand LBPs individually unless there is agreement between both parties
  • Co-marketing by Fjord and Balancer on relationship, LBPs, and general brand awareness

As for BAL distribution:

Fjord would prefer BAL be distributed every month with a value reflecting the initial grant value of $500k. We understand the points zendragon raised on typical grant structure, but given Fjord is proposing to return $500k in the rev share, we think our proposed approach is fair for both parties.

6 Likes

Appreciate the additions and clarifications @pizzaking :pray:

2 Likes

Payment tranches for this governance proposal executed by the grants multisig will be provided here as they happen:

Initial 100k payment to be locked as veBAL: 0xbcb69461408b6507f485da7bdb8a9a964af7db2e3983ed7c59b7a2f2ed7a1fbc
veBAL lock txn: Pending Fjord Multisig whitelisting

November (Month 1/5): 0x62c65c81c025a2253085a0dff529a37fa0586e79fc5d3434c91f55548ee952e4

1 Like