[Discussion] Strategic Partner/Venture Fund

Background

Two items of context for this discussion should be read before reading this discussion point:

  1. Fernando’s outline of the vision: My Vision for Balancer Protocol
  2. The Indexed token swap proposal: [Proposal] Treasury Swap: Balancer <> Indexed - #8 by tongnk

Given Balancer aims to be a base layer that protocols can build on top of, going forward I see there will generally two types of growth that can occur:

  1. Funding new and exciting teams that will build on top of Balancer and help it flourish and grow
  2. Integration with existing protocols that will bring instant liquidity and TVL to Balancer

We already have (1) covered with the grants program (see Proposal: Establish the Balancer Grants DAO and coordinate the next wave of Balancer Community Grants - #21 by Deadcoin). We should note however that the payoff of grants programs normally will take longer as most projects will be starting from scratch - so they need to build up their community and product before being able to significantly bring in volume to Balancer

Point (2) is very interesting as there are going to be some existing protocols with established communities and TVL that are looking for products like Balancer to further support them in their growth. We currently don’t have a solution for this. The grants committee is able to support in an integrations perspective (i.e. give out a small grant to fund the integration) however there is a general lack of incentive alignment.

Proposal

Overview

To fix this incentive misalignment I’d propose that we formalise and setup a committee who has the mandate to do the following:

  1. Source and find partners that provide strategic value to discuss potential token swaps. These projects should have an existing community such that we can see a more immediate benefit to Balancer (~3 month timeline)
  2. Source and invest in early stage projects. The rationale behind this is that there will always be teams that will be looking to just raise from investors instead of funding themselves through grants. Given this is a competitive space if we can align projects with us at the start then this makes the most sense

Details

Would propose the following:

  • Committee of 5 members to keep it lean. Ideally we can lean into the existing Balancer investors to help fill some of these spots and have a combination of both community + investors with a mix of skillsets to evaluate these projects
  • Commit a large amount of funds to this fund. Even if not everything is utilised it’s a nice PR activity as well as demonstrates we are serious with funding projects in the space
  • One of the key elements that this committee will need is the ability to move quickly. Would propose that once voted in they report in on a regular basis but hold full rights and accountability in making decisions
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Just adding, this proposal here: [Proposal] Treasury Swaps Program #1 GNO x BAL is another reason why we need this committee. Will be able to speed things up a lot faster

I really like the idea of creating a Venture fund and potentially 1 and 2 merge a bit in the latter stages of a new initiative. Balancer seeds a new project initiative and if the long term goal of the project is to have a token, Balancer could receive a percentage of that token as an additional return on investment. However these newly established projects will likely need some mentorship in the early stages of their project so some time from the DEV team will likely need to be carved out for this purpose.

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  1. Source and find partners that provide strategic value to discuss potential token swaps. These projects should have an existing community such that we can see a more immediate benefit to Balancer (~3 month timeline)

To make sure I understand this right: The timeline would be like:

  1. Source projects with strategic alignment potential with Balancer
  2. work out a token-swap plan so this strategic potential can be realized
  3. Measure the result from the monetary commitment from the sourced protocol within a short timeframe (Example could be increased TVL of the protocols token)

I think point 2 is a good approach. What I am asking myself is what strings attached come with that. How can Balancer here provide “smart money”. What additional costs does this imply besides giving BAL?

Would like to make sure I understood point 1 correct.

Yep I believe this is the case. I will note that because the target audience group will be more established they don’t necessarily need USDC and so a token swap makes the most sense. Further, most of them need to look to start utilising their treasury to further speed up growth and development - this is just one way of unlocking treasury. We don’t need to have “smart money” in this case as we aren’t doing seed investing.

In regards to seed investing specifically it would really be Balancer as a brand and a DAO being able to provide support and help. I would actually suggest finding existing projects first before branching into seed as you would most likely want to spin up a team to support these new projects

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Great proposal @tongnk
The last couple of weeks have shown time and time again that the Balancer Ecosystem is growing at a fast pace and multiple proposals have come forth to spin up different committees to support this growth.
With the overarching idea of establishing an independent Balancer DAO (of which at the moment the Grants Committee is the first part) I am all in favor of having more committees (or work groups, this term seems to be preferred in other DAOs). This will give Ballers and other community members an opportunity to level up.

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