[Proposal] Deploy Balancer to Optimism, managed by BeethovenX

Introduction

Most here likely recognize BeethovenX as the first approved friendly fork of Balancer which began back in October. Over the last six months they’ve proven themselves to be valuable contributors to the Balancer ecosystem - not only by contributing several pull requests to Balancer’s codebase but by exposing thousands of users to the power of Balancer’s technology. They have created and nurtured a vibrant community while building a world class team of operators behind it, from development to marketing to biz dev.

With the prospect of Optimism launching a token and kicking off what could be an explosive summer of growth the timing is right to establish Balancer as the leading DEX before the gold rush begins. While Balancer Labs could take this on themselves this would mean putting key projects on hold, not to mention that it is far from guaranteed voters would choose to direct BAL emissions to Optimism pools without a financial incentive to do so.

Motivation

I propose that BeethovenX takes charge of an official Balancer deployment to Optimism including contract deployment, front end, infrastructure, and ongoing maintenance as required. This removes any burden on Balancer’s human resources while also creating a strong financial incentive for BeethovenX to attract BAL emissions to Optimism pools. This is accomplished through the 50% protocol fee being split 50/50 between Balancer and BeethovenX. In order to bootstrap adoption and secure Balancer’s position as the leading Optimism DEX, BeethovenX is allocating up to 3M BEETS for bribing veBAL voters in the first six months.

Any farming by either protocol’s treasury on Optimism is acceptable with the condition that earned BAL rewards are either locked in veBAL or held on the balance sheet. No farming and dumping.

This presents a unique opportunity to deepen Balancer’s relationship with BeethovenX, a team which has proven strongly capable of leveraging Balancer technology successfully. As this would be “Balancer on Optimism, by BeethovenX” veBAL would hold governance power because we’re plugging into the gauge system. The governance multisig would have five members, myself plus two Balancer community members and two from BeethovenX. It’s worth pointing out that BeethovenX has no intention of leaving Fantom - this deal is specifically structured to keep all of their usual emissions on Fantom. They do however recognize the opportunity that exists on Optimism and by acting early we can secure a large share, hopefully the majority share, of the DEX market there. This would be a huge win for both protocols and I would point out that while Balancer has a large treasury to throw at opportunities like this you cannot buy the kind of quality team that BeethovenX brings to the table.

Specification

If this vote successfully passes, BeethovenX will begin work on Optimism as soon as possible. They will coordinate with Balancer Labs as required to plug in to the veBAL system. To be clear, this vote passing would enable veBAL voters to direct BAL emissions to Optimism. Individual pools would still need to go through the usual gauge approval process. Transaction specifications will be shared with the DAO Multisig as they become available with confirmation of authenticity from at least two independent sources.

9 Likes

Very excited to see this happening and create a stronger relationship with BeethovenX. In support

3 Likes

An L2 like Optimism can be thought of as a “core” scaling path of Ethereum and has the potential to be the central point for defi as more traders move away from L1.

This proposal would be taking away 50% of lifetime protocol revenue from BAL holders in what could be the primary place Balancer lives. Deploying and managing an optimism deployment has very little overhead and the core team could knock this out in a week once prioritized.

This would be a horrible move for any rational BAL holder

6 Likes

Im totally hooked on Bal Tech AMMs because of my experience with the BEETs Team.

They have been nothing buy helpful and patient.

5 Likes

I strongly support this proposal, as it would bring much needed liquidity to Optimism.

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It’s worth pointing out that veBAL has full governance authority for this deployment. We can vote to end the 50% revenue sharing arrangement at any time. But it is true, we should not engage in this deal with the intention of terminating it except in the case where BeethovenX does not manage it up to our expectations.

It’s less of a concern about the resources required to deploy & maintain it - the value add here are the resources BeethovenX will put into pushing the adoption of it. I think there is a benefit to giving an external team with a proven track record a strong financial incentive to make this deployment a success. There is an opportunity to cement Balancer as the leading DEX on Optimism but based on the experience so far with Polygon & Arbitrum’s performance in the gauge votes, can we really expect veBAL voters to vote for Optimism pools without external incentives?

Your concern is totally valid and one I have been thinking about a lot. Considering we have an exit at our discretion, I don’t see the long term harm in letting the BeethovenX team loose to work their magic. Spreading our team across four networks with more on the way like zksync would make it difficult to ensure all get the attention they deserve. This is not as simple as uniswap or curve who can set & forget effectively - we need boosted pools, managed pools, and whatever future big brain ideas we come up with pushed into the world by people motivated to see them brought to life.

This proposal is our best chance at being #1 on Optimism in my opinion and if that happens, we secure 50% and spend zero resources on it. This is a radically different approach than we’ve taken with Polygon & Arbitrum and one I believe is worth experimenting with.

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Core L2s aren’t places to experiment with giving away half of all protocol revenues. If this idea wants to be tested on some other random evm chain, I’m all for it.

The team being spread thin across networks is mostly short term. Several networks launched within the last 3 months along with new products (boosted pools, etc). As the space evolves, the team will adjust time and attention to networks with the most users and growth. Also, 3M BEETs in bribes isn’t going to move any needle.

For transparency, can people posting share their holdings so we better understand motivations? I’ll start - I hold 100% BAL 0% BEETS.

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Contract Address 0x766dDC12447973D86092E403F85c35578dD0433D | FtmScan vesting contract from my advisor tokens

The future is flexible and there are no guarantees - the initial outlay is 3M BEETS but future proposals to increase that or direct BEETS emissions towards Optimism are possible. As I said we can end this arrangement so they are motivated to ensure money continues to flow.

3 Likes

Wow. So happy for both parties and token holders. Hope both sides can come to an agreement. BAL is amazing at innovative tech and BEETS is amazing at UI & marketing. Both are very community focused projects. Baller partnership for sure.

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I think the main problem here is understanding exactly what are Blabs long term plans and priorities.
All the reasoning behind these ideas (Friendly Forks, collaborations like this etc) come from this. There is no doubt the core team can pull this off in two weeks once prioritised, but is this ever going to be prioritised? that is the real question.

If Blabs is ready to deploy in a relatively short time and commits to it then I would understand your perspective. Otherwise, lets experiment with BeethovenX which I’m sure will do a great job.

For full disclosure I own 250k Beets and 10K BAL.

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I agree with some of the points @Andrea81 mentioned, if I remember correctly the Optimism proposal that was posted back in January was not considered for implementation even though there was a segment of the community that would have loved to see Balancer on Optimism.

The truth is that in order for Balancer to be spun up on any other chains we are currently fully dependent on the product roadmap of Blabs. As @solarcurve mentioned above this proposal is one solution to that roadblock. In a fully decentralized model it would be up to the governance token holders to direct resources and priorities of the DAO. In this case we would need Dev resources for the next few weeks and the BEETS team is offering to plug that gap since the DAO itself doesn’t have the competency on retainer.

Now the tradeoff for this solution is the ongoing revenue share with the BEETS ecosystem. You could structure the deal to be a one-time payment for the resources to spin up the Optimism contracts but Blabs would have to manage the Dev side of things on a ongoing basis due to the DAO not having the resources to do so. I would personally like to think of the BEETS team as more than a mercenary dev group looking for a one time payoff. Their team taking on development on top of the Balancer contracts in a mainnet L2 ecosystem would likely prove to be fruitful for both Balancer and BEETS.

I’d be curious to hear from @mosayeri or someone on the Blabs roadmap/planning side on feasibility of fitting a Optimism implementation into an already busy schedule. In any case I’d love to see the BEETS team involved in this implementation, potentially the sticking point is around economics of a deal.

I hold roughly 85% BAL / 15% BEETS

4 Likes

Beethoven X is an AMAZING team and would do VERY well by the Balancer core team, to run this new protocol.

I UNEQUIVOCALLY vote YES.

Until I came across their protocol I was skepitcal about Fantom but they have single handedly transformed the entire chain before my eyes. They are nothing but helpful and attenative to the community needs. Furthermore, they are constantly making updates while keeping their community engaged and informed. I hope this vote goes through and the $BEETS team is given the opportunity.

With any luck this will only be the first and they branch out to other networks as well. I cannot state this enough, they are AAA material, and anything they produce will undoubtably become successful.

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Agreed that delaying an Optimism launch whatever direction we go is not ideal.

I have a lot of respect for the BEETs devs and would love to find ways for more alignment. But for any key network deployment and maintenance, I strongly feel that should fall under the core team’s umbrella. Even if there is outside help or collaboration.

Are there alternative ways we can align incentives that doesn’t give away so much protocol value?

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The notion of “giving away value” is absurd.
BEETx is better equipped to manage a launch on Optimism than Balancer is both in the short- and long-term. Current (lack of) Balancer engagement and effective deployments on L2s testify to this. BAL needs BEETx more than vice versa, which is why BAL holders should be thrilled with this opportunity.

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As much as I would like to see a BLabs deployment, I don’t think they can currently fully commit to getting it done. Also from the point of view from the Community Dev subDAO, we do not yet have the resources to fully deploy on Optimism on our own. I am in talks with the BEETs guys and I will support them in the deployment as best as I can. I will also make sure that analytics and balancer.tools will be immediately integrated for a possible launch. I mention this as we as a community dev subDAO should establish as much know-how as possible in this matter for possible future deployments.

To me, the proposal in its current form is the best compromise for Balancer to be deployed on Optimism. The upsides from this proposal outweigh the downsides clearly.
I am therefore in favor of this proposal.

1 Like

Thanks everyone for their comments!

In a vacuum I would fully agree with @mike and would prefer Balancer to add Optimism to our current UI. Optimism is definitely going to be one of the most important L2s for the years to come and an important source of protocol revenue.

Unfortunately, however, our current reality is full of constraints: we currently do not have the resources necessary to deploy and maintain another chain in the next 2-3 months. The team just lost some tech members and even though we are actively recruiting, we are very selective and haven’t been able to add enough members to the team lately.

BLabs and some community members just went through the Q2 roadmap planning process and we struggled to find capacity to finish super important things that have been outstanding for a long time, not to mention tech debt.

An example is to have a generic way to support boosted pools on our UI and SOR now that we are seeing many other teams interested in building their own flavors of boosted pools like FEI, AMPL, OHM, FRAX and many others.

So the choice we have to make really is:

  1. Not do this.
    This would possibly mean Beethoven does it themselves and we go into a collision course in the future when we have the time for it. We would then be splitting/fragmenting our energy instead of combining it.
    We miss the initial hype and timing of launching early on Optimism and users/volume/TVL go to other AMMs

  2. We do this
    Revenue will be split 50/50.
    We combine our efforts into promoting Balancer on Optimism, both with LM incentives but also with efforts around community building, bizdev, tech improvements, hackathons etc.
    This would also have the advantage of experimenting with a new model that could prove very powerful. I would not support this if it wasn’t with a highly competent and proven team like Beets though. If there is a team out there we should make this experiment with it’s Beethoven’s.

My read is that, given the restrictions we have, with this partnership we could more than double the DCF the Balancer+Beets can get if we join forces compared to what Balancer would get doing it alone. So that would more than compensate for the 50% cut.

I think this partnership would also mean that Beethoven would respect Balancer’s decision of going solo on important chains in the future (like zkSync) without launching and competing with us on them. This would be a nice addition to the terms/conditions of this deal BTW. Would please someone from the Beethoven team please chime in here to confirm this is something that you would be ok with to add?

I would also suggest we name this initiative (if approved) as something like “Balancer on Optimism, powered by Beets” which makes clear that this is an official Balancer instance but powered by the Beets team.

DISCLOSURE: I hold 100% BAL and 0% BEETS, but do have the intention of potentially having BEETS exposure in the future.

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Glad to see this proposal. Agree with @Andrea81 , @zekraken and @Fernando .

This clear division of labor is good for distribution of responsibility. Beethoven X team is an excellent team and trustworthy partner. I m for it.

Balancer x Beethoven X

We go strong together.

Disclosure: i have about 80% BAL, 20% BEETS.

3 Likes

I fully agree with this… tbh it doesn’t make any sense for Balancer Labs to not spearhead this deployment.

If this was a side chain or something I’d understand the sentiment, but Optimism will likely see long term adoption as a key ETH scaling solution and it seems like a no-brainer for Balancer Labs to devote the very little resources required to oversee this deployment

First and foremost, the Beethoven X team is truly humbled and honoured to be considered for this proposal. Such a partnership would have seemed like a pipe dream only a few months ago. It truly speaks to the beauty and openness of this space and the quality of community and team that has developed around the Balancer protocol. We feel incredibly lucky to have the opportunity to play a role in the expansion of Balancer.

If this proposal passes on both sides, our goal on Optimism would reflect the same goal we continue to have on Fantom. We truly believe that Balancer tech can become the #1 DEX in a developing ecosystem. This is the goal that continues to drive us on Fantom, and it is the same mindset we would carry over to Optimism. As Mr. Kind would more eloquently put it, we will work towards this goal “until our boney fingers bleed.”

As @mike already pointed out, simply deploying Balancer V2 to a new chain is not a difficult task. We would absolutely agree that if deployment and maintenance was our only role, this partnership would not make sense for either side. We will continue to strive to create a world class user experience, push the boundaries of what is possible with Balancer V2, and create network effects through the development of a brand and community known for kindness, quality, and safety.

To answer @frenando’s question specifically, we would absolutely respect Balancer’s decision to deploy solo on strategically important chains in the future. We will continue to strive to grow a strong relationship between both communities and teams. As @joeywong said, we are stronger together.

One request that has arisen from our side would be clarification around the metrics under which a termination could proceed. We don’t think this needs to be formalised here, but it is something that we can work towards clarifying.

DISCLOSURE: My exposure to BEETS is significantly higher, but I do hold a significant (to me) amount of BAL.

If for some reason this proposal does not pass, I would happily volunteer time to help get Balancer deployed on Optimism. The Balancer community and core team has given us so much, it would be a small token of gratitude I could offer.

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FWIW, I’d be much more amenable to the idea if the tail end upside was capped. Basically I’m just trying to avoid the scenario where Optimism is the dominant layer and Balancer just cut it’s lifetime revenue in half to get a deployment out the door.

Ex: 50% of protocol fees up until the 3M BEETs is recouped, 25% for a following year, and then renegotiated after that

8 Likes