[BIP-XXX] Deploy High Yield (20-50% base APY) Balancer Liquidity

Governance General Proposal
1

Summary

Deploy Core Balancer Stablepools composed of select top performing ERC4626 vaults and their underlying tokens.

Deploy three base-yield optimized Balancer pools that are composed of high yield ERC4626 vault assets.

Author

Astral Protocol: Increasing liquidity provider returns through layered yield strategies, liquidity pools and yield bearing vault tokens.

Background

Recent improvements in tokenized yield bearing contracts have brought about a 10-20 times increase in tokenized yield generation.

Top ERC4626 Vault tokens generate 30% - 70%+ APY in addition to benefiting from value appreciation of the underlying assets.

By default, ERC4626 tokens do not trade well, or even at all, when deposited into liquidity pools.

In order for an ERC4626 to trade like its underlying token, an Oracle Stablepool composed of the ERC4626 and its underlying token must first be deployed and funded.

Balancer could specialize in hosting liquidity pools with base, unincentivized APYs between 20%-50%+ by making select high yielding ERC4626 Vault tokens trade just as well as their underlying token when deployed on Balancer.

Motivation

High yielding Balancer liquidity would greatly increase Balancer’s yield revenue, while also attracting new liquidity and users who are drawn to provide liquidity to high APY pools.

Specification

Astral Protocol suggests Balancer start with deploying Oracle Stable Pools on Ethereum Mainnet with a 0.04% swap fee with the following compositions.

stAuraBAL/AuraBAL: 38% APY, built on vebal.

asdCRV/sdCRV: 25% APY, built on sdCRV.

asdPENDLE/sdPENDLE: 27% APY, built on sdPENDLE.

yvyYB/yYB: 80% APY, built on yYB.

EarnETH/WETH: 6% APY, built on stETH and managed by Lido.

STAK/USDC: 32% APY, built on tokenized RWA assets managed by Yieldnest.

After deployment, seed fund each pool with 20K-50K in liquidity from the Balancer Treasury.

After that, deploy the following weighted pools on Ethereum Mainnet and fund with 40K-100K each from the Balancer Treasury.

High Yield BAL:
50% stAuraBAL / 35% Stak / 15% EarnETH

ERC4626 SuperPool:
30% stAuraBAL / 20% asdCRV / 20% asdPENDLE / 20% STAK / 10% EarnETH.

High Yield YB:
50% yvyYB / 25% STAK / 15% asdCRV / 10% EarnETH

—------‐—------------

If this BIP is approved, additional BIPs designed to incorporate high yield tokens with Balancer on chains beyond Ethereum while also incentivizing liquidity providers to deploy and fund additional Balancer pools composed of high yield token assets will follow.

Voting Options:

  1. Yes, Deploy High Yield Balancer Pool infrastructure.

  2. No, Do nothing.

1 Like
2

Hi there
Anybody can deploy these pools as our protocol is permissionless. If certain vaults are not present yet, simply create them and check them in at GitHub - balancer/code-review · GitHub
The MAXYZ service provider is happy to assist here (cc @zekraken ).

In that sense, no BIP is needed IMO.

1 Like
3

Very True. However, why would i go through all that effort and time and my own money to help the mega million dollar Balancer DAO, for no personal benefit?

1 Like
4

Also, there a BIG difference between a little protocol launching a few pools on Balancer and Balancer launching pools on Balancer.

If we want to drastically increase Balancer’s Yield revenue, these new tokens and pools would have to come from Balancer or from other large protocols or Whales.

1 Like