[BIP-XXX] Enable bb-s-DAI/bb-a-USD Gauge [Ethereum]

BAL Gauges
1

Summary:

Proposal to add gauge support for the newly created bb-s-DAI/bb-a-USD pool to bring further liquidity depth to the underlying linear pools and improve yield stability for LP deposits.

As Balancer boosted pools gain popularity in pool pairings, increased liquidity will help allow the number of balancer boosted paired pools to scale. Pairing the boosted Aave V3 USD pool with the new boosted sDAI pool creates a pool pairing that will generate a sustainable, relatively high native yield from underlying assets. With the amount of DAI in the DSR surpassing $1B, a liquidity pool where users can deposit their sDAI to earn additional yield is expected to be an attractive option for liquidity providers across DeFi. By adding gauge support, veBAL holders can incentivize this pool to make it a top stablecoin liquidity pool and secure Balancer’s lead as the main venue for trading sDAI and other RWA yields.

References/Useful links:

Link to:
• Website: https://intotheblock.finance/

Protocol Description:

The assets proposed in this pool are assets already whitelisted and used currently in Balancer. This proposal is to combine two of the existing linear pools into a meta pool that can further attract liquidity to Balancer through the boosted yields of both linear pools.

Motivation:

With increasing rates in TradFi markets, stablecoin pools must aim to maintain competitiveness by matching these yields to prevent stablecoin liquidity from leaving the DeFi ecosystem. The current bb–s-DAI/bb-a-USD pool already earns a native yield from its underlying tokens, but still falls short of yields found outside of DeFi (e.g. T-bills now currently above 5%). Adding gauge support will allow veBAL holders to direct emissions to the pool to increase the potential APR to compete with rates found off-chain.

Increased incentives in this pool will deepen liquidity in both the underlying boosted pools so that they can be paired with more tokens and also help bring additional revenue to Balancer through the fee sharing mechanism for interest bearing assets.

Specifications:

  1. Governance:

Balancer: veBAL acts as the governance token allowing holders to vote on proposals in the snapshot.

Aave: AAVE and stkAAVE are the governance tokens that can be used to vote on proposals in snapshot and through the Aave DAO on-chain governance portal.

Maker: MKR is the governance token that is used in votes in the Maker Governance portal

  1. Oracles:
  • Aave utilizes a Chainlink oracle for USDC, DAI, and USDT
  • Maker uses a Chainlink price feed in the sDAI oracle found here
  1. Audits:
  1. Centralization vectors:

Balancer, Aave, and Maker are decentralized and managed by DAOs. All protocols have a well-tested governance process to enact updates to the protocol.

  1. Market History:
  1. Value:

The proposed pool aims to increase liquidity to two of Balancer’s main boosted pools to allow for more tokens to pair with these pools. Increased liquidity in this pool will bring additional revenue via the fees taken on the yield from the interest bearing assets in both pools.

2

This doesn’t make a whole lot of sense because DAI is in both pairs. better idea in my view would just be bb-s-DAI/bb-a-USDC.

but the real question is do you have some plan to secure votes for such a pool?

3

Thank you for the feedback. With regards to the pool type, we at IntoTheBlock (ITB) are open to a different combination. Our aim is to design a pool that has relatively high yields before incentives based on the underlying interest bearing assets. Therefore the proposal can be adjusted to be using a bb-s-DAI/bb-a-USDC pool instead.

ITB works with several large institutional clients that are looking to deploy capital into DeFi protocols. Our aim is to establish a pool that adds benefit through increased liquidity and revenue for multiple protocols while also generating yields that are comparable yields that can be found for fiat outside of DeFi. Enabling the gauge opens up the opportunity for veBAL holders that have vested interest in Balancer, Maker, or Aave to direct emissions towards the pool to help facilitate growth in TVL.

Regarding votes for the pool, we will be reaching out to the teams of the named protocols as well our institutional clients to vote for the pool.

Please let us know if you have further comments or feedback on this proposal. If there are none, we will create the proposed bb-s-DAI/bb-a-USDC pool and update this proposal.

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