[BIP-XXX] Enable wstETH/bb-a-wETH Gauge [Optimism]

BAL Gauges
1

Summary:

The pool wstETH/bb-a-wETH is to replace the wstETH/wETH pool on Optimism.

The current wstETH/wETH contains $7.96M in TVL at the time of writing and is the second largest pool on Beethoven’s Optimism deployment.

References/Useful links:

Protocol Description:

This pool utilises wstETH and linear pool bb-a-wETH which deposits wETH into Aave v3 wETH reserve. The linear pool utilises a wrapper developed by Aave Companies.

Motivation:

With the introduction of wstETH to Aave v3 on Optimism, the author expects users to deploy yield maximising strategies that utilise the wstETH/wETH loop. This is expected to generate borrowing demand for wETH and deposit APR for those that deposit wETH into Aave v3.

Incorporating the bb-a-wETH will lead to additional revenue to Balancer DAO and also additional incentives flowing through to Hidden Hand.

This pool uses the ComposableStablePoolFactory-v3 1 which addresses the reentrancy vulnerability disclosed during February 2023. This gauge is uncapped, and would enter as a “core pool” under BIP-19. This means 65% of 50% of yield generated by this pool is to be used for bribing for votes on it via Hidden Hand. The remaining 35% goes to Balancer DAO as revenue.

Specifications:

  1. Governance: Find more information about governance on Lido’s forum.
  2. Oracles: Optimism wstETH Oracle, see here
  3. Audits: For Lido Protocol and and Aave v3
  4. Centralization vectors: See here.
  5. Market History: See wstETH and wETH.
  6. Value: Balancer will earn the protocol fee on wstETH yield and deposit yield generated by Aave v3 on Optimism via bb-a-wETH.

Link to Pool: TBA
Link to Gauges: TBA

Disclosure:

This proposal is the sole work of @Llama contributor, @Matthew_Graham, via the legal entity TokenLogic. Llama is a Service Provider to Aave DAO.

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