Great post sir. There is no prospect for us to adjust BAL/ETH emissions so with that in mind, a reactor is not as big of a benefit to us as most other projects.
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Thanks for your post, this is what i gathered in terms of what a Reactor was for. That it is akin to liquidity as a service. To me it seemed like getting LDs to direct liquidity in our favor was where we should focus attention. People seem to be hesitant to sell BAL for TOKE though, so I guess that has been killed off as well.
Thank you for coming and giving us some insight! This is the core of my issue and it felt like the people involved in this proposal were not willing to discuss it. Emissions are a core component to veBAL and changing that would require much more in depth discussion.
I’m extremely enthusiastic about other avenues of participation in Tokemak, as it is a genuinely cool project. I hope everyone can understand why I had to stake out such a fiercely opposing position on this proposal. I look forward to establishing Balancer as a major player in the Tokemak ecosystem.
In closing
Let this be a great learning example for veBAL holders that it is extremely important to get to the core of what is being proposed and whether it makes sense for Balancer DAO and the protocol. There was clear handwaving at some of the most important aspects of this proposal and it seems like the point of this entire thing was to establish a general relationship with Tokemak with very little regard to the actual details. This whole proposal was schemed outside of view of the general community and active pressure was being applied to put this snapshot hours after the original proposal was posted.
I hope to see more openness in addressing concerns for future proposals of this magnitude prior to going to snapshot so veBAL holders can make informed decisions.
Don’t let anyone’s role influence how you should view the proposal. Don’t let stuff that sounds good on paper slip by without careful examination. Don’t let people in soft power convince you that you don’t know what you are talking about.
No hard feelings to anyone involved!
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indeed, power to the people! The only constructive feedback I would give to you is not to let your personal view of a proposal get in the way of approving it to go to snapshot. The specification for this was clear from the beginning to any objective observer but you refused to perform your duty and vote Yes on the Governance Council. Three people who receive salaries to pursue opportunities like this supported it so it can’t be dismissed as a spam proposal.
Despite your valid opinion that it is a very bad thing to do the rules are clear that veBAL voters decide, not you or anyone else on the Governance Council. You are an incredibly valuable member of our community for exactly situations like this where you speak up regardless of what other people think. It is just important to recognize the time for that and the time to suck it up and follow the rules.
Absolutely no hard feelings at all! We can all learn from this and move forward together.
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I think it speaks to our intentions when we near immediately approved the secondary and more “well defined” proposal. There we plenty of other proposals that needed clarity prior to going to snapshot, for example Aura and TetuBAL.
I fail to see how this relates to anything. They are not paid by the DAO. I don’t see how getting paid for something qualifies a proposal being more valid that one posted by someone who does it for free.
For the record, I did not vote yes or no, the vote was 2-2 and I was the tie breaker, for which I abstained prior to even knowing the score. If anyone feels like this warrants removal from the gov council, they are free to initiate a vote to kick me out, I have plenty of other fun things to do at Balancer!
I think we could improve the process to provide more clarity on certain aspects, because as it exists now there is no minimum time from forum to snapshot and little protection against malicious proposals that say one thing and do another (not at all saying this one was).
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“I fail to see how this relates to anything. They are not paid by the DAO. I don’t see how getting paid for something qualifies a proposal being more valid that one posted by someone who does it for free.”
It only relates to the stipulation that “spam proposals” can be dismissed by the Governance Council. Has nothing to do with one opinion being more valid than another 
I have no intention of trying to remove you from the council at all since there is really no one I would trust more than you - just saying my view on how this situation could have been handled better is all. It is a system that should be improved for sure, and will be.
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This whole situation is a bit of a trainwreck.
Why this was a bad idea:
The original proposal is for the treasury to hand over $2mm of BAL to the DAO Multisig to be used at the discretion of BLabs Biz Dev team for bribing TOKE holders. The said bribing hopes to encourage TOKE holders to vote for a BAL/WETH Reactor – nothing more.
As kindly pointed by @TheCryptosAndBloods’s in-depth explanation, having a Reactor only gets Balancer TVL on BAL/WETH. BAL is very liquid and its liquidity is guaranteed via the veBAL system – not only we don’t need this, we certainly shouldn’t spend $2mm on it. This side of the Tokemak product is meant for tokens with low liquidity.
In other words, Balancer ‘securing’ a reactor pertains to the BAL token’s liquidity NOT becoming the destination of liquidity deployed on AMMs from other Tokemak’s protocol controlled assets. These two are completely unrelated.
All the benefits that the Balancer protocol has to gain from Tokemak is by being the choice for the deployment of protocol controlled assets (PCA). This power resides with the TOKE holders and having a Reactor does not help here in any way.
Thus, the goal is to either convince TOKE holders to choose Balancer as the source of deployments or, command enough TOKE so we can direct the liquidity to Balancer ourselves.
A few ways that this goal could be achieved are:
- Bribe TOKE holders to send liquidity to Balancer (this is not the kind of bribing that this proposal is suggesting!)
- Purchase TOKE off of the market or swap BAL for it in a treasury-to-treasury transaction
- Farm TOKE in a Reactor
I am very interested in seeing efforts put into 1 & 2. If proposals were to come forward in these two fronts that were reasonable and beneficial to the protocol, I’d very much be interested in voting for them myself and endorsing the proposal to other veBAL holders that care for my opinion.
For clarity, the proposal currently in discussion is NOT option 3. The proposal at hand would hope (but not guarantee) to make it possible to farm TOKE with BAL. The farming itself would need another proposal and would cost deployment of more BAL separately. For a variety of reasons, some of which mentioned already, option 3 is not the most efficient way of acquiring TOKE for the purposes of directing liquidity to Balancer:
- It takes 2 years to come out even on the initial cost
- It takes more time beyond the initial 2 years to benefit from farming TOKE above the initial deployment cost
- It costs BAL further than the initial $2mm requested to farm TOKE (costs in opportunity and risk, not spending of BAL).
- Costing time to accrue enough TOKE to direct significant liquidity means we will not see the benefits right away.
It’s not a stretch to say, if we want Tokemak’s liquidity to be directed here then we should be shooting for options 1 & 2 and not 3. This proposal, is at best misunderstood and at worst, dishonest about relationship between having a Reactor and Balancer performing better/worse compared to other AMMs that could source liquidity from Tokemak.
Others have pointed out most of the points I mentioned here. The reason I went the distance to summarize the discussion here is to highlight:
- This proposal was not the only way or the best way to achieve its end goal. It’s arguably non-sequitur about relationship between a reactor and where PCA is directed.
- It is this suboptimal approach of building relationship via buying a Reactor outlined in the proposal and not the end goal directing PCA to Balancer that has rightly so been voted down by governance.
- This should have started as a first principles discussion, outlining the end goal and allowing the path to be be arrived at by discussion and consensus. Not to say that one cannot make a suggestion on a path to be pursued but, not discussing the alternatives and rushing through a hasty decision was certainly unreasonable.
What went wrong here?
Above, I laid out why this wasn’t a good course of action for the protocol and why veBAL holders rightly so voted against the proposal. But, separately, many other things also went wrong in the process.
Move to Snapshot
If I’m reading the timestamps correctly, this proposal was moved to a snapshot after being on the forum for less than 1.5 hours. I shouldn’t have to explain why this is bad. I will be looking into why this is even possible in Balancer’s governance system and will be working on drafting a proposal to apply restrictions to the proposal process and prevent any such instances to happen in the future. If anyone is interested in working on this with me, please reach out here or on Discord.
Emphasis on 'Relationship’
In multiple instances during the discussions it was brought up that building relationship was one of the goals of the proposals. Although relationship building is important in any partnership, it does not take precedent over the core objective of the partnership. In other words, relationship building is a means to an end. The end here should have been to direct Tokemak’s PCA to Balancer. Instead of choosing the best route to achieve the end, we were given a proposal that would have costed the treasury $2mm to allow us to ‘build relationships’.
With all due respect, relationship building is what the biz dev team is here to do. The biz dev team is not here to spend treasury money to buy the means that they themselves are here to provide to the ecosystem. I would like to ask @Fernando, @mike, @markus, @kia, @immutbl and other leaders of BLabs to chime in on why BLabs thinks this would’ve been a wise use of treasury fundings for merely establishing relationship without necessarily and in of itself guaranteeing the accomplishment of the goals of the said partnership. It is further puzzling that members of the team who put this proposal forward previously not been active on the forums.
ad hominem
The discussion here and in parts of Discord were rather unhealthy. As now proven by the governance vote, @Mike_B had reasons to be skeptical about sending this to snapshot within a couple of hours of being posted on the forum.
It was rather disappointing to see ad hominem attacks on Mike.
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I’ve said this before, I’m just an outside observor here however I’ve been following this very closely and from what I can tell Tokemak announced core3 at the end of April (28th?), the original post was put up 4 days ago (May 3 - four working days later) by Solarcurve.
The BD team was answering questions and trying to clear up confusion (as evidenced by the first post) due to a prior relationship with the Tokemak team (per Curtis post above), but I’m not sure if they had a part in the proposal. Due to the drastically different writing styles I’d guess not. When the original post received pushback, Curtis from the BD team put up a counter-proposal a couple days later (which is this) that addressed the initial concerns, once again my assumption is because this is likely the last core vote that will happen and because of the short time frame left (however there was never much time to begin with - 6/7 total working days, 4/28-5/9).
That was pushed through to snapshot after the governance council approved it. From discussions I followed in discord there’s nothing against a proposal going forward quickly.
From what I can tell the BD team wouldn’t be in control of the bribes but it would be put in a separate Msig controlled by the dao.
As for any ad hominem attacks, from what I’ve followed in discord and here they came mostly from dao members and they are a disgrace imo. I am very disappointed by some of the things I’ve seen said. But nothing to not get over and learn from.
In all fairness a certain degree of suspicion is to be expected by anyone that uses crypto/web3/defi due to the nature of the products however I highly doubt there’s any sort of subterfuge going on here. Even if a bribe went through and balancer acquired a reactor (and the subsequent token swap occurred) it still looks like it would have been profitable for the dao and would not have affected tokes price, if that’s a concern.
I personally don’t think it’s smart to buy toke due to its emission rate, I’d much rather see a swap but I’m not sure if Tokemak will engage in that without a reactor for bal.
Maybe Tokemak would accept an OTC for bal but that’s still a much worse rate when prices are considered compared to a swap. And at that rate a swap should just be done.
Any additional commentary regarding insinuating one party may be acting in a way that is not beneficial to balancer is a waste of time and detrimental to the dao imo. While that could be the case I’ve seen nothing to suggest that from either party at this point. We need to move on from this proposal to the next thing. It’s done and is now just a bad look. Please stop.
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