[Proposal] Allocate up to $2M in BAL to Bribe Tokemak CoRE3 Vote


The Tokemak CoRE3 vote is underway and ends on May 9th at 3pm EST. This represents an opportunity to secure a BAL reactor, after which we would likely have to decide to either execute a token swap or deposit some BAL from the treasury to farm TOKE. There is around $1B of liquidity at current prices that will be directed by TOKE voters in the future. If this proposal passes, Balancer officially enters the Tokemak game and we will be exploring any and all options for securing as much of this liquidity for Balancer as possible.

As a side effect, this could lay the groundwork for a future partnership between Balancer and Tokemak. Our technology can offer them many advantages over deploying liquidity to Sushiswap or Uniswap - by allocating up to $2M BAL to bribe in CoRE3 we signal that we are interested in exploring how our communities can work together to benefit everyone.

We plan to deploy the bribe in stages depending on how the competition evolves as the vote comes to an end. There is a good chance the full $2M will not be required to win. For reference, here is Terra’s strategy for CoRE3 which is very similar to ours.

This reactor would create an additional sink for BAL tokens. People farming BAL might deposit it in the reactor to earn TOKE.


  • The $2M BAL is not sent from the DAO Multisig in time before voting ends
    • The BAL will be returned to the Treasury or the transaction to send it rejected
  • The bribe is not sufficient to win CoRE3
    • Redacted Cartel assures me that many eyes will be on this vote as it nears completion - even a late bribe stands a very high chance of success. But there are no guarantees. Voters may not adjust in time or our $2M might be insufficient to win.
    • We don’t need to be #1 but simply enter the winning group (top 5)
  • The potential ROI on this $2M is hard to quantify. There is an opportunity here but how long it would take to recoup this $2M is impossible to predict
    • veBAL voters must decide if this represents a promising opportunity or a poor use of capital. My goal here is mainly to present the choice as I find it to be quite interesting personally.


If approved, $2M BAL at the prevailing market price when the vote ends (~155k BAL at time of writing) will be sent from the DAO Multisig 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f to the LM Multisig 0xc38c5f97B34E175FFd35407fc91a937300E33860

Crypto markets being what they are, it is best to leave the exact amount of BAL undetermined to ensure we have sufficient capital to win if we enter the bribe game.

  • Why do we have to move so quickly? - I understand it is because of the timing of things but this feels a bit rushed
  • What about proper discussion before going to a vote. As a Gov-Council member I am not sure if we can let this one slide so quickly while being due diligent with others
  • Why exactly such a steep price point? We tend to be rather critical about allocating / swapping BAL with other protocols. It doesn’t feel right to me to make an exception here

Too many question marks from my side. I wouldn’t feel comfortable to go to a vote for this proposal!


Hey Xeonus,

I can’t say for sure but just from an outsider perspective, watching Toke and Balancer here these are my assumptions -

  • This is rushed as CoRE3 is under way, once it is launched it will be another 5-6 months before the next round of CoRE goes live. That would mean another 5-6 months before Balancer could obtain it’s own Reactor
  • Now is the time for the discussion, no? What would be the downsides of launching this initiative? Outside of a potential small loss, or TOKE losing all it’s liquidity. Looking at Tokemak now this is the cheapest CoRE Vote I’ve seen and this could be a pivotal moment for Balancer to start taking control of the volume narrative.
  • $2M is not so steep, especially when considering what is possible with Tokemak. There is $1Bn of liquidity at stake, as @solarcurve stated in his initial response. That $1Bn of liquidity could potentially be pointed at Balancer Pools (pending a token swap), which would more than likely help drive the lagging swap fees on the platform.

Personally I’d be all for this vote as a BAL holder. I see nothing but positives from Balancer getting it’s own BAL reactor. Currently each TOKE is capable of directing ~$70 of liquidity, depending on swap size this could be a huge positive.

Also just realized, we’re not talking about a new project here. This is Tokemak, which I think at this point can be considered “battle tested” so any sort of trepidation around timing only seems to be around it being an unwise financial decision, as opposed to any sort of exploits.


Please forgive me if I don’t fully understand all the mechanics of Tokemak and the Reactors, so I’ll use the graphic at the bottom to support some of my questions.

  1. I’m assuming we are bribing TOKE holders (LPs and stakers) to vote for our reactor, is there a platform to perform this bribing or would it just be an airdrop type of situation?
  2. if we are ultimately after the liquidity housed on the Tokemak platform is there a reason why we wouldn’t just bribe the LDs?
  3. linked to the question above, is there a way to guarantee that a certain amount of liquidity is directed to Balancer over Sushi and Uniswap as part of this proposal?
  4. it isn’t really clear to me what the benefit of having a reactor is, if the BAL holders are being asked to drop BAL in the reactor? doesn’t that detract from the ultimate goal of having as many people as possible deposit to BAL/WETH 80/20 and lock for veBAL? is the expectation that people market buy BAL to drop into the reactor for some return?



Echoing many of @zekraken sentiments; this proposal assumes far too much pre-exposure to mechanics of Tokemak.

I’m not sure the average BAL holder would be able to simply read the proposal understand what’s actually at risk and what’s actually to be gained.

Do we mean that there’s the possibility that we pay $2mm of bribes and get nothing in return?

How much are we talking?

And what type of liquidity will this $1B be?
Is this a perpetual situation? I.e. these 5 slots will forever get a share of that $1B?

1 Like

As much as I think it’s worth assessing these opportunities, I think the timeline here is much too rushed for me to feel comfortable that we as a community can properly evaluate the pros and cons. I also don’t like the idea of 150k bal being instantly distributed and almost certainly dumped quickly. I also don’t think this proposal adequately describes exactly what we are getting.

What does this mean? Maybe it would be good to better elaborate on the value we will be getting as a result of making a top 5 spot.

I also don’t have a full understanding of Tokemak but isn’t a reactor for BAL liquidity and has little to do with Balancer itself? If you go to tokemak and click pro mode, you can choose where the liquidity is directed (I believe your toke holdings influence this?)

So shouldn’t we be trying to acquire TOKE if the goal is directing liquidity towards Balancer?


cheers everyone for the great conversation on such short notice. beautiful! I do my best to address the questions:


  1. Hidden Hand
  2. that could be worthwhile, depending on how exactly the LD vote will work. we’d have to determine if fees earned by the protocol over the time period the vote is in effect would justify a bribe.
  3. no, as that is up to TOKE voters
  4. many people are not going to lock veBAL for whatever reason. This token reactor creates another use for BAL (farming TOKE). Whether we take advantage of that by depositing BAL from the treasury and/or performing a token swap to acquire TOKE is up to us. Random people can also deposit BAL if they like the APY.


"Do we mean that there’s the possibility that we pay $2mm of bribes and get nothing in return?"

I think it is extremely unlikely but I can’t say it is impossible. So there is a risk of this happening, however small.

"How much are we talking?

And what type of liquidity will this $1B be?
Is this a perpetual situation? I.e. these 5 slots will forever get a share of that $1B?"

You can check out Sushi’s vote to collateralize their reactor as a baseline. These swaps have been in the range of ~$2-3M.

The $1B liquidity is regular weighted pool type liquidity. Perhaps we can convince tokemak folks to add an option for a multi-token pool. but baseline expectation is a 50/50 weighted pool.

The top 5 winning slots don’t have anything to do with getting a share of the $1B liquidity. The top 5 winners are simply added to the reactor page and allocated TOKE rewards. If we are in the top 5, BAL gets a reactor added and people deposit BAL to earn TOKE rewards. Our treasury can participate in this which creates a nice yield opportunity for our giant BAL stack.


"What does this mean? Maybe it would be good to better elaborate on the value we will be getting as a result of making a top 5 spot."

A large sink for BAL tokens - either random people will deposit BAL to earn TOKE or our treasury can take advantage and deposit some of our BAL stack.

An opportunity to pursue a treasury swap if we want instead of farming with our treasury BAL

I could even see them pairing this BAL reactor with one of their stablecoin options and directing it to a Balancer v2 pool. This would create some nice arb opportunities for BAL/WETH.

"So shouldn’t we be trying to acquire TOKE if the goal is directing liquidity towards Balancer?"

Ultimately if we do this then acquiring TOKE does become our goal. And the most effective way for us to do that is winning the vote then doing a treasury swap. The BAL would stay in the reactor and live in an LP somewhere - not be sold, not be locked in veBAL to dilute everyone else. But if we are against that, the second option is deposit a fatty stack of BAL from treasury and farm up some TOKE ourselves.


To add onto @solarcurve’s response above -

Before addressing any questions it first seems like people don’t have a full understanding of Tokemak, I’ll do my best to give that here:

Tokemak can be thought of as a generalized liquidity layer, that sits above dexes. Users can both LP and direct where the liquidity will go via TOKE voting.

Tokemak has two types of reactors - reactors can just be thought of as a place users can single side stake their assets to earn yield, then the assets are directed via TOKE voters to determine it’s pair(s). There are pair reactors, those can be thought of as the assets that are generally paired with protocol tokens - being eth/ust/dai/fei/etc. Then there’s the token reactors, which are voted on and added during a “CoRE” vote - namely sushi/fox/etc.

Up to this point TOKE has been distributed via LM incentives for their toke/eth pairs on Uni and Sushi. As well as from staking TOKE to reactors to incentivize Liquidity Direction (and some token swaps).

The ideal future state for Tokemak is most if not all toke is being vied for by AMMs/other protocols to direct liquidity towards their token or platform while tokemak controls a large bag of protocol owned assets that are earning stupid fees.

addition: Liqudiity Directors (users who stake their toke in reactors to determine the dex it flows to) can pick from 4 DEXes currently. Balancer is one of them. So far Sushiswap was the only community of the DEXes that really took a crack at this in core 1 but we know what has happened there. The only reason I see LDs directing liquidity to sushi is because they understand it and that’s really it. By us offering veBal rewards on these pools I think balancer could be the perfect home. So it on us to make that happen.

To address the actual value prop here, assuming we win the bribe and make the top 5, below are two options I see:

  1. Utilize the Balancer DAO Treasury to farm the BAL reactor. Across all token reactors the average APR is ~11%, rewarded in TOKE. This is mostly arbitraged and kept in check by TOKE stakers. If the DAO chose to deploy ~$10MM of BAL to this reactor they would be earning ~7,100 TOKE/mo.

Currently each TOKE can direct up to $63 of liquidity ($899MM/14.2MM Circ Supply). Which means each month Balancer could then direct ~$447k worth of assets to Balancer pools. This is completely ignoring emission rate, staking rate and rewards for directing liquidity (~20%).

Over the course of the next 6mos Balancer could direct ~$2.7MM of liquidity to Balancer.

  1. Perform a token swap with Tokemak. If we decided to swap $2MM of BAL for TOKE, that would instantly allow us to direct ~$9.7MM worth of assets to Balancer Pools.

This would also be earning Balancer DAO ~2.6k TOKE (assuming 20% avg staking reward rate) which could be used to further direct an additional $162k assets to Balancer pools/mo.

In scenario 2, Balancer DAO could also choose to deploy $10MM of BAL (or any amount for that matter) to the BAL reactor which would only serve to direct further liqudiity our way

In the end liquidity =/= earnings/swap volume but what this would do is #1 provide a sustainable way for Balancer to secure TVL and #2 further open the door for more collaborations between Tokemak and Balancer.

What are the risks?

That’s obviously purely dependent on the route chosen but I do want to call out there’s a risk to doing nothing. Choosing to not jump into this core voting period only further elongates the timeframe till the dao can get involved in the sustainable liquidity game.

At this point Tokemak has not reached a point of sustainability, but neither has Balancer. Both are attempting to find their way forward to their sustainable future. Both are reliant on LM incentives to retain liquidity so they can reach and show a longer term value prop. I don’t think Tokemak is the best solution to sustainable liquidity y but it is an option, and a relatively low cost one at that. Especially when compared to the incentives balancer is currently paying out to rent liquidity from retail as is.


Really appreciate the insight. I have a couple comments, please excuse any misunderstandings I have.

Is the single sided staking that takes place when one deposits BAL into a reactor lossless? I don’t understand how you can be deploying those tokens into liquidity pools without IL. Please inform me what the general risks are for users who provide single sided liquidity in reactors. Can you also clarify exactly what can happen with tokens deposited into reactors?

I don’t like the idea of bribing $2m in BAL, just to have the (non privileged) opportunity to farm using that BAL to just to earn 7,100 TOKE a month (~$93k). I’m not going to comment on how asymmetric that looks but it seems to me we would be much better off just buying TOKE outright, as it lets us fine tune the degree to our involvement.

Then theres the additional layer of protocol risk. In order to get the returns suggested, we would have to part ways with $2m in BAL + risk $10m in BAL tokens that are deployed at the will of TOKE voters. We all know that hacks can come out of no where and no amount of assurances can guarantee the safety of smart contracts. For that reason, I want to make sure we are receiving a return that reflects the significant risk we take when involving other protocols in our treasury strategies.

There could be something here, but I strongly feel that a rushed $2m bribe is not the way forward. I would like to actively pursue other means of getting involved with Tokemak but would much prefer we take it slow and not make any decisions on such a short timespan.

1 Like

Completely understand your perspective here but I’d like to push back for a number of reasons -

#1 The idea of taking things slow, while admirable, has unintended consequences and at times can lead to missed opportunities.

#2 I’d argue what better value for the DAO than to farm additional TVL for the platform itself? Earning a marginal yield on its treasury is only worth so much. And it’s not just the value of TOKE but ~$447k of TVL added each month that will stick, with no further incentives, outside the DAO keeping it’s TOKE locked. This is also ignoring any thoughts around a token swap, which if competed would direct significant amounts of TVL to balancer as listed above.

#3 Protocol Risk. There is inherent risk in DeFi. Tokemak has been on the market, with considerable attention, for over 9 mos with no exploits as well as multiple audits. That’s about as battle tested as it gets in DeFi.

#4 Future Partnership opportunities. Having a BAL reactor can give Balancer additional leverage on the partnerships side to shift Tokemak itself towards Balancer liquditiy solutions. Somewhat anecdotal but the market at large doesn’t have a full understanding of the value of Balancer LPs, and having this reactor + additional liquditiy directed towards Balancer is not just a positive from a numbers perspective but can be spun up from multiple different perspectives to our benefit.

To me this is less about a bribe (which would have limited effect on the market, 24hr trading volume for bal was ~$12M, even if 100% dumped in a single day it would have little effect on the price of BAL) and more about the litany of benefits that could come from a partnership like this.

Also just one further addition, I assume the reactor could be configured in any way and could be spun up to provide liqudiity to vebal as liquditiy on Tokemak is only deployed in weekly cycles based on votes delegated.

EDIT I forgot to mention, IL is mitigated either by Protocol Controlled Assets or Tokemak’s “Guardrails”. More info can be read here - Guardrails & Impermanent Loss Mitigation - Tokemak: The Utility for Sustainable Liquidity

1 Like

Super helpful, Curtis – thank you for the explanation!

I guess the main question for everyone to ponder on is, exactly what problem is $2m, $10m or $20m of liquidity directed to Balancer is going to solve for the protocol?
There’s currently $2.5B of liquidity on Balancer mainnet – what do we get by increasing it by 0.1%?
Market cap of BAL is $136m, should we really spend $2mm worth of BAL and then put $10mm worth of BAL to work for this incremental increase in TVL?

Am I missing the big picture here or does the math not add up?


I am, with all due respect, strongly against this proposal in its current form. It does very little to communicate the value added for Balancer and it feels extremely forced. 2 million dollars is a huge amount and it sets terrible precedent to push through such huge decisions like this in a couple days. I strongly advise against executing on this proposal within the given time constraints. I think it is obvious that no rational BAL holder would want their treasury being used in this way. There are MUCH more efficient ways to accomplish the individual goals in this proposal.

Please don’t let this affect any future involvement between the two projects, but I think it’s obvious that this proposal is not valuable enough to warrant rushing through the process.

[edit] Thinking over it a bit, I believe there is potential in bribing toke holders to direct liquidity towards balancer pools if doing so can produce enough revenue (or other value add) for the protocol to make it an efficient use of BAL. That is the sort of activity I would like to pursue as it gets us involved in the TOKE ecosystem while giving us fine tuned control and tangible metrics that we can make decisions off of.


I think this is a poor proposal tbh, why have you not included a scenario analysis with at least some idea of expected revenue or profit for Balancer?


After reading through the proposal my current understanding is that the basic intention of this proposal is to attact liquidity to Balancer.

Currently the protocol has multiple ways to attract liquidity (platform thesis, swapFee revenue for LPs, LM incentives and so on). LM incentives are the most important factor to attract and retain liquidity currently.

So the basic hypothesis of this proposal - if I understood correctly - is that Balancer could attract more liquidity by spending this BAL compared to adding this amount of BAL to LM incentives distribution for example?


incremental_liquidity_gained_w_tokemak_per_BAL_spent > incremental_liquidity_gained_w_otherOpportunity_per_BAL_spent

1 Like

MK, this is a good framing. Although, at this point in the conversation we should move onto working with hard numbers and strong arguments.
This is especially important because these systems don’t scale linearly. What I mean is that directing $2mm of liquidity for a token that just launched might be a wise spend of $2m use of $10mm but that’s likely not the case for Balancer who is already sitting on $2.5B (Billion with a B) of liquidity.

I would like to know, why do we think this is an effective, and cost efficient way of attracting liquidity? It’s either that my back of the napkin math is off by a few orders of magnitude, or that this expenditure is going to do absolutely nothing for the protocol given the current size we have.
If it’s the former, I’d like to be corrected with solid numbers and first principal arguments, not hand waves and rhetorics. If it’s the latter, I’d like to know why trusted members of the community feel comfortable hail marying indefensible proposals that would spend 7-8 figures of protocol’s treasury?


I think this is a cost effective way of attracting liquidity because it is liquidity that will pay for itself and then some over the years, compared to liquidity mining where it stays while BAL emissions are given but leaves afterwards. There is an up front cost but this is liquidity that will earn fees, not zero fee stablepools. Eventually it will pay for itself, plus we’ll be earning more TOKE → directing more liquidity, etc.

This is just one more tailwind to growing Balancer’s key metrics in my mind and it only comes at a cost of BAL sitting in the treasury earning us nothing.

I really don’t mind if this gets voted down by veBAL. I actually think Curtis made good points, maybe I’m just dumb I guess lol

Again, I would like to see hard numbers and first principal arguments.
I have a lot of respect for you @solarcurve and want to be welcoming to Curtis who I think just joined but, with all due respect, these are hand waves and rhetoric.

If we have a growth mindset, which at this stage of the protocol and DeFi we should then, every $1 we spend should bring us multiple of its value in near short term.
How exactly is $2mm of liquidity that eventually pays for itself going to move any metric? Are we really trying to 10x the pie here or increase it by 0.1%?

1 Like

To answer some questions here this is a solution to attracting TVL that doesn’t involve LM incentives- which by the way we’re currently paying ~$2MM/week to retain our TVL, with no end in sight. A great case study of this is our L2 platform -

  • Balancer has lost ~50% of it’s TVL on Arbitrum and Polygon over the past month, corresponding with the release of veBAL gauges and the loss of LM incentives on the majority of the pools. Now there could be multiple factors at play here but the one major change is L2’s are no longer receiving a set amount of BAL

Also it’s not necessarily the amount but the mechanism that’s being used and the potential partnership benefits - Having a BAL reactor and the subsequent partnership benefits that could arise is reason enough. I think people are 100% caught up in $2MM of BAL and the potential risks at play but I’ll state this again -

  • We’re already paying $2MM/week to retain current Liquidity, what are we doing to retain that liquidity long term that doesn’t involve paying out further LM incentives? This cannot go on forever, DeFi 2.0 - while maybe not the best answer was an attempt to answer a serious question in DeFi (How can protocols maintain large scales of liquidity?). And that is a serious question, we cannot continue paying out our equity forever, it is unsustainable.
  • Tokemak has been on market for 9+ mos with no exploits, how much more battle tested do you want in DeFi?

This shouldn’t necessarily be framed as a way to only acquire $2MM of TVL or $10MM but one mechanism Balancer can use to potentially secure long term TVL. Balancer can become the AMM of choice for Tokemak users, but that is currently not the case - Most pools receive less than 1% of liquidity directed there and it’s 100% a lack of understanding and Balancer users being active there. I’ll restate the above and say that based on what happened on Arbi/Poly it’s safe to assume that ~50% of TVL is mercenary liquidity and will run away once LM incentives end, what are we doing to help maintain that TVL? TVL is incredibly important for the way in which Balancer’s Pools work.

1 Like

I fail to see how this proposal has any relevance to this.

No we are not. veBAL emissions do not come out of the treasury and thus we are not paying anything. It’s integral to how the ve system works, and I think you are off when you characterize it as “we are paying 2m a week to attract liquidity”. It honestly feels like you don’t understand the ve system when you say “And that is a serious question, we cannot continue paying out our equity forever, it is unsustainable.”

Tokemak might have been around for that long but the core operations of it have not. I’m not going to argue about smart contract safety but this response is extremely handwavey. The first core vote was at the end of September, and it took quite a while before any liquidity got deployed anywhere. Additionally, there are plenty of issues with systems like this that only arise once at scale, and your inability to acknowledge that possibility does not give me confidence in your risk assessment abilities.

@Curtis , do you have any exposure to Tokemak, TOKE, or any projects or people directly related to Tokemak?


How do you not see any relevance? LM is the current mechanism Balancer is using to secure at least a portion of it’s TVL. I’m saying Tokemak is a potential mechanism that Balancer could use to shift away from that model.

We are not directly paying $2MM out of the treasury but I think the characterization you are using is unfair. Diluting current holders by distributing additional BAL is reducing equity holdings. I don’t know why we’re having this conversation

My response to smart contract exploits may have been handwavey but isn’t this as well? Saying something bad could happen is a lazy argument, no? As it only positions one to be able to say told you so if something bad goes wrong. I could make this exact argument for Balancer or any platform in DeFi by extension of this logic.

I have no exposure to TOKE, I am mostly trying to pump my own BAL and ETH bags. The fact that you are attempting to attack my character though by insinuating that is pretty insane - and the fact that you think BAL getting it’s own reactor and directing liquidity towards Balancer will even mildly affect TOKE price is misled. I think I’m done responding if you’re going to resort to character attacks. Thanks and happy to vote on this.

1 Like