Abstract
As part of the veBAL tokenomics upgrade 75% of protocol revenues are to be paid out to veBAL holders in bb-a-USD. An undesirable side effect of this is the protocol liquidating a significant amount of BAL tokens collected as fees. This proposal suggests that these BAL tokens should be paid out to veBAL holders directly on top of the 10% of BAL emissions they receive.
Motivation
It was noted in the veBAL proposal that there would need to be some consolidation of the tokens collected before paying those fees out to veBAL holders:
It was decided that protocol fees should be paid out in the bb-a-USD token, however we can see that a significant portion of the protocol fees collected recently were in the form of BAL tokens.
https://docs.google.com/spreadsheets/d/1wI4YLCUvIdupofwgSwKDeP-6vYCUdd02WRvkTjgEJgY/edit#gid=0
As we want to incentivise veBAL holders to reinvest into their veBAL position, it’s counterproductive to preemptively sell these tokens into stablecoins and it would instead be preferable to pay out BAL directly.
The addition of BAL as a token for which to pay out protocol fees is unique in that 10% of BAL emissions are reserved for veBAL holders and these funds are distributed through the same mechanism as the protocol fees. It then causes no extra complexity or gas costs for veBAL holders to pay out a portion of the protocol fees in BAL tokens.
Specification
- The Treasury subDAO shall exclude any BAL collected from being liquidated to bb-a-USD and use it to supplement the existing BAL emissions paid to veBAL holders.
- Any future tokens collected which are primarily paired against BAL (e.g. auraBAL by way of the 80/20 BPT, etc.) would be liquidated to BAL rather than bb-a-USD.