Dear Balancer Community,
greetings from a sunny and humid Bangkok, Thailand!
The general reasoning behind the proposal was to make the Balancer technology available on chains where Balancer.fi was not present and to avoid an increase in workload by the Balancer Labs core team.
The extraordinary success that “Beets” has achieved to date, has created an appetite for the recreation of a similar model that could use the same superior technology (the Balancer technology), but with a different, own identity adapted to the market intended to enter.
Current market conditions show a consistent increase in trading activity on Avalanche, which has demonstrated to be one of the most active and vibrant communities in the DeFi landscape. The strategic decision of the Balancer team not to deploy on this chain has pushed the Partnership subDAO towards the exploration of possible valid alternatives with the intention of recreating, at least partially, the success of BeethovenX.
Launching a Friendly Fork by the DAO however, proved to be a complex exercise with mainly three factors that strongly influenced the decision making process:
Team: finding a team that is able to develop, maintain and dedicate resources to the project;
Chain: current market conditions present two options:
→ develop a product on a highly competitive and possibly saturated chain or
→ be a first mover on “nascent” chains with the associated risk of not being relevant and wasting resources;
Liquidity: how to bootstrap decent liquidity from day one (critical factor).
To minimise these risks, the Partnership subDAO believed in the creation of a “hub”, by deeply concentrating synergies with experienced players in the DeFi ecosystem and building a joint project.
Introducing Hexagon Finance
Hexagon will be a multi-functional platform, with the intention of intercepting the different needs of the Avalanche crypto Community by bringing a new decentralized exchange, a launch-pad and a lending platform.
Ava Labs blessing: A critical role has been played by Ava Labs which has operated as an important bridge between the later to be named Hexagon team and BalancerDAO.
Moreover, Avalabs has committed some initial funds specifically dedicated to the Liquidity Mining program. This will help for the bootstrapping of liquidity and attracting fresh capital from competing chains.
Terra Labs Partnership: Hexagon Finance will be mainly focused on UST, the algo stable coin of Terra, with the ultimate goal of making it the most used and widely distributed stable-coin on Avalanche.
TerraLabs will join the project by being a major stakeholder together with BalancerDAO and the founding team. Terralabs has committed for an initial capital deployment (UST) to help the project building the initial phase of liquidity bootstrapping.
The launchpad functionality will be developed by Copperlaunch, a long term partner of Balancer.
The agreement between Hexagon Finance and BalancerDAO has been built around a Memorandum of Understanding (MoU) which will be signed by a BalancerDAO representative if this proposal is accepted.
General conditions are the following:
BalancerDAO is requesting the following
- The community on the host chain fully supports the fork development;
- Teams should adhere to a level of code of conduct that is in line with the core values of the Balancer community.
- Balancer V2 core contracts should be deployed without any changes, (Contracts deployed 1:1)
- No migration functionality in the MasterChef;
- All controllable protocol parameters need to be managed by reputable multisig.
Hexagon Finance undertakes to provide Balancer with as many tokens as the Hexagon team. Tokens will be received under the same conditions in terms of vesting and release. This means 6% of the total supply, or 6 million tokens out of 100,000,000, whose release will be locked for 6 months upon launch and linearly vested for 12 to 24 months. The exact length of time will be finalized upon the completion of the private sale round, if any.
The tokens will be claimable using an address chosen by Balancer.
In exchange for the above conditions, Hexagon requires Balancer to engage mainly in Marketing activities and awareness campaigns as detailed below:
Tweeting original content about Hexagon Finance for the four weeks prior to our launch and for the two months following it. The tweet will come from the BalancerDAO handle.
Creating and publishing announcements regarding the activities of Hexagon Finance. This will cover every major activity such as, but not limited to, airdrops, launches, new pools being created and products being launched.
Organizing Ask Me Anything (AMA) sessions with the Balancer community to promote the launch of Hexagon and eventual upgrades/news afterward. At a minimum, this will include an AMA shortly before or after the launch of the Hexagon Dex.
Hexagon Finance is authorized to use the name and logo of Balancer in its official documents in statements with pre-approval on logo usage from BalancerDAO such as “the officially approved fork of Balancer on Avalanche” and similar;
Providing statements from official representatives of BalancerDAO in support of Hexagon to influencers, media outlets, and similar. This will include both written and audio statements as required by the channel used (articles, video, podcasts etc.). At least one statement should be shared before the launch of the platform.
In general, making it clear to the Balancer community that Hexagon is an officially approved fork of the Balancer Protocol on Avalanche.
Token allocation will be distributed as follow:
|18%||Team - BalancerDAO - Terra Labs|
|10%||Partners and Advisors|
|55%||Liquidity Mining incentives|
The Partnership subDAO believes that the blessing of Avalabs, the partnership with Terralabs and the reliability of the funding team are the main points of strength. The Avalanche ecosystem is already highly competitive so risk mitigations strategies have been considered necessary for the development of Hexagon Finance;
- Making UST as the main focal point can be a double edged sword for two reasons:
- focussing on one stable coin creates an overexposure that some would consider unnecessary in terms of point of failure;
- the general missing of potential trading volume on alternative pairs.
- While the BeethovenX Friendly Fork agreement has been reached after launch, in this case, the agreement should be reached before. Consequently bringing a certain level of uncertainty. However, the Partnership subDAO believes that risks have been reduced considerably given the deep due diligence done on the team and the partners involved in this collaboration.
The DeFi landscape is still in its early stages and layers of uncertainty are very much present, especially in today’s market conditions. A constantly evolving market generates certain known unknowns and a level of unpredictability that needs to be taken into account when operating in cutting edge environments.
The BalancerDAO will finally have the opportunity to have a stake in a project with strong backing, good fundamentals and exposure to a strategic chain. This is, today, the best opportunity we see for a successful Balancer powered Dex on Avalanche.
Competition is high! Even if Hexagon would focus mainly on UST trading pairs, more established and long term native players still control the vast majority of the market.
We present this as a great opportunity to the Balancer Community. Hexagon will ultimately increase the number of independent teams working and using the Balancer technology. This project will also increase the number of developers working on the protocol, give precious feedback to the Balancer core team and ultimately, inspire us all to do better. Similar to what Beethoven has been doing during the past few months.
I hope this presentation gives you enough context to where we have been, where we are, and where we want to go: up only.
For full disclosure:
The Hexagon team has offered Andrea a token allocation equal to the 0,0012% of the total token supply as a thank you gesture.