[BIP-28] Kill CREAM/WETH Gauge

At first, I was a bit more reluctant in regards to killing a gauge. However, I am in favor of killing this specific gauge because of the concerns that @SmallCapScience has raised in the general discussion thread

Certain entities are diluting BAL value (even for themselves) in a pool of a „unhealthy“ governance token. Therefore, we should protect our users and our protocol accordingly. That’s why we have this mechanism in place.
In hindsight, we need to be much more careful in which gauges we will approve / send to a vote.

Furthermore, the soon to be activated core pool mechanism should create a positive flywheel and I rather see the BAL wasted on CREAM distributed to useful liquidity.

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Got it and any sort of “Kill after X amount of weeks” is also easily gameable. If it can’t be built into the system directly I guess this is the only way. I’ve only seen the whale comment on one post, I would hope they do here as well to state their case.

@TheOne - You could likely earn just as much BAL by holding other bluechip assets (bbaUSD, WBTC/WETH/USD, etc.) rather than only voting for a CREAM gauge, rather than just voting for a not nearly as traded asset. What are your thoughts?

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I believe this proposal sets a precedent that could cause more harm than good as it removes the trustworthiness aspect from Balancer’s governance. How can someone, from now on, buy at market and lock for 1yr their tokens, when rules can change drastically depending on how we wake up in the morning?
The whale (or entity) in question followed the guidelines and bought BAL because it saw possibly an economic opportunity for the CREAM ecosystem and wanted to participate in the Balancer governance. We really don’t know what was the reasoning behind the decision. We are all assuming it was all intended to play the system but have zero evidence really.

We have proposed to so many projects to participate in the new veBAL product but the vast majority failed to see the potential. Why we want to punish someone that has understood and bet heavily on it is beyond me.

veBAL was designed and introduced to let Governance participants decide where emissions should go with minimal human interaction. That should be the end of the story.

I will vote against this proposal.

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But what is the actual goal of BAL incentives? It’s to bootstrap Balancer’s growth by attracting productive liquidity. That is the objective that serves the long-term interests of stakeholders [s/o to Vishesh for sharing this perspective].

Jeremy, I tend to disagree here. “Incentives” is probably the wrong term to be used. BAL distribution has been set in motion to further decentralise Governance power. The BAL token is a governance token only, not an economic incentive. This is what Balancer documentations states:

Alignment between governance token holders and protocol stakeholders is crucial for successful decentralized governance, and BAL tokens are the vehicle to drive this alignment. BAL tokens are not an investment

Forcing away someone that wants participate in the governance process just because has different economic interests than others to me is a mistake.

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It was never part of the ‘rules’ that a gauge, once approved would run in perpetuity. It is within the realm of governance’s power to kill a gauge.
Furthermore, the rules of governance aren’t being changed – any veBAL holder, new or old, can have a say on what pools should or should not have a gauge and how much emissions should be directed to them. This is not being changed.

This account is not being limited from participating in governance – that’s just incorrect. In fact, it’s expected that they’d participate in this vote and represent their own interest.

I’m not sure why intentions should be the deciding factor here and not the outcome.

veBAL isn’t a product and doesn’t function in vacuum. It’s a mechanism in service of the growth of the greater platform.

We are not punishing and we’re not doing it on personal basis. The governance is going to decide what’s best for the protocol as a whole, not a single actor within the system.

This is correct, that’s one of the functions of veBAL and it applies to this very vote – veBAL holders will be deciding where the emissions should be going.

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I think SmallCapScientist brought up a great point here.
Regardless of discussion around income from trading, governance should reflect on the implications of a gauge and its uses. Otherwise, if we’re suspending critical analysis, we might as well just create a gauge for anything and everything.

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100% right. I could have used a better term there. The fact remains that only a few projects saw that opportunity.

That is correct. We’ve been told so many times we don’t need gatekeepers (remember GovCouncil?) but now we are back at square one because we don’t like the rules we approved anymore.
We had a LM Committee which distributed BAL tokens based on several factors, including what now we call “core pools”. Then we said oh the system can be corrupted or “BAL ToKen NeEds MoRe uSe cAsEs” so we introduced veBAL. Consequently some went out and bought those tokens. And now we are like, “oh yes but you cant vote like that man…”

What is done is done and we should accept it. We can change rules for the future and attract more projects to buy veBAL so to dilute further voting power concentrations, but not going against those that actually accepted the risk and bought BALs.

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Has anyone spoken to @TheOne? It seems to me like this is a move to remove a gauge from one of the biggest veBAL HODLers, who is now locked in, and the DAO should be seeking to at least in part represent.

I have seen no evidence of any attempts to talk this through. To consider what both parties need. To think together about how to work together to build both a sustainable ecosystem and a decent ROI for large investors.

I DO NOT support 30% of veBAL going to the CREAM pool, or the BADGER pool, or any pool. For veBAL to be healthy yields must be well distributed.

That being said, this veBAL is locked, these votes will go somewhere. Why the game of cat and mouse with an entity who has identified themselves and seems willing to talk?

I think @Absolute_Unit stated that perhaps there should be some cap on pools, which I don’t think is possible in veBAL. Maybe it makes sense to think about what you would put in place if you could, and then approach @TheOne and see if they can find a way to play within those rules and start working together with Balancer Governance to bring this thing forward?

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I love the idea of talking to @TheOne and exploring any other options.
@Tritium, if yourself, @TheOne or anyone else has any alternatives in mind, please bring it up – I think everyone would be happy to discuss in good faith.

This account, or any other account is well represented within the governance system by the virtue of their stake. I’m not sure what you’re actually suggesting here.


I want to address another point that’s been brought up in many posts under the context of playing ‘wack-a-mole’ with gauges.
In principal, there is absolutely nothing wrong experimenting with enabling and disabling gauges to see their impact on the protocol’s success metrics.
The concern about the overhead of these enablements/disablements is indeed valid. Although, we could very easily weight the overhead of a disablement with the amount the protocol is spending each week to keep it enabled.
Perhaps a more sustainable approach to mitigate this overhead is for governance to be more selective with enabling new gauges.

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In order to bring some type of “social control” to this decision making process I wanted to share the following idea for people to poke holes into and think about.

  • I scrapped the following data from multiple Dune reports for the past 14 days (a larger time window can be considered but I had to scrap all this manually :sweat_smile:)
  • I looked at the average volume for each mainnet pool that has a gauge (includes pools with >= 0.25% gauge vote)
  • I took the v2 protocol level average volume for the same time period
  • I brought in the current voting weight (this could maybe be averaged too)

They key field is the % of volume per vote field. Basically if this field is 100% that means the pool’s average volume is the same as the % of gauge vote the pool is getting.

My potential system is this:

  • % of Gauge voting is >= 5% is eligible for scrutiny
  • % of volume per vote should be >= 5%
  • give new gauges an 8 week grace period before checks go into place; after these levels have been breach there is warning posted to the forum and possibly discord 2 weeks before the gauge is killed

My thinking is that this system keeps pools on level terms since only the Balancer ecosystem is evaluated. If the protocol volume goes down as a whole pools could either go down with it, up vs the trend, or stay static. This system says as votes go up, your volume should follow. I thought about bringing in volume for each pool’s tokens across all DEXs to look at market share, but not sure that actually matters.

let’s look at the current in-scope subset to pick apart each example at these current voting levels

  • CREAM - would need 750k volume on average to remain. There have been zero days where the pool has received this much volume or more
  • Badger - would need 120k volume on average to remain. There have been 18 days where the pool has received this much volume or more
  • STETH - would need 525k volume to remain. There have been 5 days where the pool has received less than this volume in the same time period as CREAM/Badger
  • AAVE Boosted - would have to plummet to 150K volume on average. If this were to happen we have bigger issues
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I agree with this. Pools that are not paying their fair share should be limited to some precentage of the vote and 5% per pool sounds reasonable to me.

I also agree that while the system does not allow a hard stop, a social evaluation process is a good idea. I think it’s also important to give voters a month or so to respond before killing a gauge. With the 10 day balancer lock on revoting and Aura’s biweekly cadence, it takes that long for people to understand and adjust.

It’s great to see this thinking. Just now we were talking about how to vote, and I said that I though in the mid to long-term, we should limit our voting on the BADGER/WBTC 80/20 pool to 3-5 percent of AURA vote, so it feels right.

With that being said, Badger for example is gaining a lot of votes and we need to be able to vote for stuff. We need to be able to get some gauges up that make sense for us to vote for, or there needs to be a more efficient bribe market for us to have revenues and survive.

It doesn’t make sense to pay for bribes and/or own all this AURA that we bought on the market to build in an ecosystem just to not be able to use it. So I think with a rule like this in mind, it’s also important to allow new gauges to be staged and to allow for innovation. To not leave entities like BadgerDAO and @TheOne who have invested money and/or time in this space with a big bag of votes and nothing to really do with them.

I really like where this is going.

I also think the Factory 2 will change a lot. We’re really trying to hold off on launching graviAURA pools or doing a lot more governance until we can use them and generate more value for balancer. At the same time, we need more things to vote for, or a more efficient market for our votes.

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Simply that it seems odd that I do not see more conversation going on between concerned parties in these governance proposals.

I was trying to imply nothing more or less. I agree, the vote is the vote, and if the DAO votes to do something it shall be done. I do think it’s important to be careful and think about how the majority wields its power and where that leads.

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Alternatively you could look at revenues rather than volume. I’ve taken into account yield revenue for pool types like wstETH. Below looks at total revenues for the same 14 day period as the volume based approach.

You can see from this view that CREAM and Badger are still the outliers (bit of a wider view than >=5% % gauge votes). I left the boosted AAVE pool out of this review since that pool isn’t necessarily about revenue, it is a core stable pool that supports swaps across the protocol.

I am not 100% sure what to set the threshold at for % of Revenue per vote, but my initial thinking was 50%. Basically saying if a pool’s % of total revenue is at least 50% of the gauge votes it controls it’s good. That would mean that CREAM would need to create revenues of roughly $70k for a two week period. For Badger it would be around $11k-$12k.

As mentioned above both of these systems are food for thought and can be tweaked, but a systematic approach could help guide things in a better direction. I don’t think anyone wants to stifle innovation, but I do think we need to recognize when something is broken for the community as a whole. It is great that individuals and teams want to acquire loads of voting power to be able to direct emissions in their direction, however when they tip the scale so much that they hurt the whole ecosystem that doesn’t seem right. For that reason I believe there is a point where a gauge receiving a certain amount of votes should be held to a different standard.

I still believe large accounts, if they are in it for the long run, are better off giving some of their voting power to pools that could generate more revenue. I don’t see the point of cornering the market and acquiring a huge stack of BAL if you’ve made an environment nobody wants to buy into. Maybe being a bit dramatic, but that is still how I view it.

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@zekraken , you will hardly find pools that generate that much revenue in all honesty. And I personally don’t think the system is broken, but it simply failed to gain traction. If we attracted 10/20 projects willing to buy at market like Badger or CREAM, we would probably be in a different position today having a different conversation. But no, we have a few bribes for ants, Badger and CREAM. And of those two, Solar proposes to get rid of one, while the other is on the edge…

I mean, we can twist numbers as much as we want but if the intention was from day one to simply optimise LM for revenue generation then all this gauging system would have been unnecessary.

I remain firmly against the proposal of wiping the gauge out. It feels very much wrong eliminating participants when we don’t like their fee generation.

Isn’t Balancer setting up such an environment here?

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generate how much revenue? the amount of revenue needed scales with the amount of votes a pool acquires, it isn’t a locked in figure. These rules also do not apply to every pool

I’m not suggesting to eliminate the pool outright, the ask is to bring voting in line with a respectable level in relation with the fees the pool is generating (if that doesn’t happen after a time period then yes at can be offboarded). In the proposed system any pool controlling less than 5% of the overall votes is free to do as it likes

I don’t think so, what appears to be true is a single entity using their large stack of veBAL to acquire as much future BAL as possible and to keep doing so for as long as possible. can someone please explain how this is a good thing and why we shouldn’t make some adjustments to account for this? is your suggestion to do nothing and leave a wide open system in place?

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@zekraken all the arguments read so far do not constitute valid cases for the killing of the gauge and allow me to repeat once again that the system is designed to let the free market (read veBAL token holders) decide where to best allocate the LM distribution. If this motion passes then, together with the concept that certain gauges are approved or not based on subjective perceptions (see the DIGG case), well then the system has no reason to exist. Because you have just reconstituted a covered LMC that decides who and what deserves the distribution of BAL.

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How will we have reconstituted the LMC with any form of what ive suggested? The LMC made decisions offline and passed with internal votes of 4 to 5 people week by week. But as you know those votes would never fail because changes were agreed to up front, none of that will take place now. Any changes here (any system and ultimately killing gauges) have to be voted on by veBAL and vlAURA holders.

If the system idea ive suggested is dumb, cool we move on, but i’m still not understanding how anything discussed recently resembles the LMC.

You are also bringing in comments about an unrelated proposal (DIGG). Speaking of which why havent you posted why you think DIGG is a good idea on that proposal? Trying to call out people for making subjective decisons also doesnt make sense. Voting is subjective in a lot of cases, people cant see into the future, they make decisions based on the info they have at hand.

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Your idea is not dumb my friend. All I’m saying is that killing a gauge because it generates small fees is a step in the wrong direction imo and puts Balancer on a very slippery slope. And you are right, i din’t chime in the DIGG discussion and I should have done more, but took a while for me to realise what was going on.

I mean, where do you draw the line here? The reference to the LMC comes from the fact that we have subjective interpretations of what is good or bad for the protocol which apparently is something we wanted to avoid.

My opinion is that we need more whales like CREAM (or Badger). This is the only way to rebalance (lol) a system that has clear design flaws.

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Thank you for seeing this. I also agree that we need more whales. If more don’t show up, veBAL will end up being run by a few entities, many of whom seem quite centralised at the moment, and this is a far cry from the dream of a decentralised future for money that I think brought us all here.

That being said, large, long term HODLers, (should)have the most vested interest in ensuring that the economy remains healthy. Having a few entities black-holing most of the emissions into a pool no one else can really get good capture on can harkens back to the SPIDERMAN/BATMAN Roosh drama that was a big part of the whole short-lived solidly thing.

One or 2 whales trying to take over to support specific and limited interests in not healthy, and as a representative of a large veBAL HODLer that intends to get much larger, this is not where we want to see things go.

I think the DIGG conversation is about having some sort of an objective and sensible matrix that all gauges are applied to, both old and new. To govern gauge removals based on that. If this framework leads to killing gauges that no one thinks should be killed, or allowing 10s of percent of the total veBAL vote to be used to direct rewards in a manner that does not support a robust ecosystem with the most(or at least many) possible parties participating, it should be changed before further actions are taken.

Gauges can get problematic, and frankly too many gauges can just become very burdensome to manage.

So: I don’t think we should be talking about killing any gauges right now, and while I do not support this proposal. I do think @zekraken’s idea of coming together to discuss in more detail and build frameworks around what is healthy makes a lot of sense. Because of the way the system is structured, and there are no way to regulate emissions at the veBAL level, these frameworks will have to be enforced/maintained based on a combination of decisions about changing the operation of meta-governance layers like AURA and graviAURA to try to meet the requirement of a framework, and Balancer governance killing some gauges when that doesn’t work.

I think there are really 2 issues that should be addressed, and I suggest someone put more time into thinking it through and we maybe discuss it in a less pointed thread.

1: There are too many gauges, and many of them seem to go week after week with no, or close to no votes. It creates bad UX and eventually will break snapshot or something :wink:

2: There are some gauges that have very few participants, unimpressive trading volume, but are receiving a substantial portion of systemwide emissions. To me it’s less about fees, and more about making sure everyone has a chance to Farm the good stuff and that Balancer governance is being more widely distributed.

As I said, I like the direction this is going, and I like these conversations.

Here was our first attempt at BADGER to deal with our own system not spinning out of control, which was prompted by @solarcurve’s concerns on the graviAURA/auraBAL/ETH gauge vote:

https://badger.com/gravity-news/graviaura-regulation

Note that this is currently a flexible policy space governed by a council elected by Badger Token HODLers, who have all been long standing members of our community and share values of partner-first, ecosystem centric BUIDLing.

As we learn and understand more and have good frameworks and models that have been validated by real world use and tested against extreme scenarios in planning exercise, we can move towards more fixed governance to be voted on by token HODLers. Also note that only 2 of the 7 Badger Councillors are on the core team or do significant other work for BADGER, so they are quite independent.

Also note that the stated objectives are to balance supporting a healthy ecosystem and generating revenue for the DAO. This document also takes into account that things need time to develop and manifest themselves.

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I agree that killing a gauge just because it is underperforming volume/fee wise is not always going to be the correct way to go about things which is why I was trying to think of a way to still allow gauges like CREAM to exist going forward, but at the same time limiting their impact to the protocol. That whale clearly makes up the vast majority of that ~32% and they would have a few weeks to divert their votes elsewhere before there would be no other choice to kill the gauge. Newer gauges have a grace period to get things up and running (maybe it should be longer than 8weeks).

The decision to kill a gauge is also not final (unless people want to draft it that way), a killed gauge could be brought back to life through governance. If someone wants to spread their great voting power to 4 different pools that are similar to CREAM for example, that is still better than having a high concentration in a single pool that is doing relatively no volume/fees. That is where the 5% limit comes into play for “underperforming” pools, if the project that runs the pool takes off then great they don’t have to worry about possibly getting sunsetted.

I guess the real decision is whether or not people feel like something like this needs to be done now or if they would rather just wait it out and see if dilution does the job for everyone.

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