Arbitrum’s launch is just around the corner! Balancer will soon be deployed on Arbitrum, bringing all the flexibility that V2 has to offer onto this highly anticipated Layer 2 solution.
This proposal requests approval for the Ballers Liquidity Mining Committee to have authority to allocate BAL for Liquidity Mining to Arbitrum. There are many similarities between this proposal and the corresponding one for Polygon.
Motivation
The competition between scaling solutions is heating up, and the options for cheap, fast, secure transactions are growing fast. In addition to the technical requirements for deploying Balancer on a Layer 2, it’s hugely beneficial to have strong liquidity pools as soon as possible. Adding Liquidity Mining Incentives to pools on Arbitrum will help drive Liquidity Providers, and therefore traders, to utilize Balancer pools.
Specification
Simply, this proposal requests approval for the Ballers Liquidity Mining Committee to have the authority to allocate up to 25,000 BAL per week for Arbitrum Liquidity Mining incentives.
There is still much discussion to be had about what the best strategy is for balancing incentives across Ethereum, Polygon, and Arbitrum. Giving the Ballers Liquidity Mining Committee authority to (at most) match the authorized Polygon incentives gives them the flexibility they need to find the right balance.
The goal is to vote this weekend and be ready to deploy incentives on Arbitrum as close to their launch day as possible.
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Thanks for the proposal.
Personally, aside from Ethereum, I would prefer the majority of incentives to be directed to Polygon rather than arbitrum as it is a solution already proved successful and with large usage (discalimer: I’m a user of Polygon too).
I believe this was brought up on the other thread but are you not worried about spreading your emissions too thin? I know on other protocols emissions will be eliminated from the pools that have little volume or no growth, is that discussed here? Another way to combat decreasing liquidity mining return when the emissions to that pool drops is to decrease the supply of BAL which is being discussed with the CRV-like locking mechanism I suppose.
It is great to bring in a new platform as there is increased interest in ETH L2 solutions, but obviously their has to be impact elsewhere with the overall emissions staying the same. As liquidity mining decisions move to the DAO it will be good to see some data going into the decisions around tweaking pool emissions.
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It’s important to recognize that this proposal allows for up to 25,000 BAL to be potentially allocated to the Arbitrum Liquidity Mining program. It does not mandate any action and gives the Liquidity Mining Committee the ability to allocate incentives on Arbitrum in the same way they do with Polygon.
@neo-renaissance I argue that we are very unlikely to have success on Arbitrum without incentives. We will simply be incapable of competing and there will be very little initial liquidity. The vault mechanism of Balancer V2 requires liquidity in order to operate efficiently and therefore I argue it is necessary to bootstrap initial liquidity on that network if we want tangible benefits.
We are going to have to test the waters in this new world of emerging L2’s. While it seems like a lot of BAL, it’s important to recognize that incentives can moved around on a pretty short notice. I trust that a much more conservative approach will be taken when we get some concrete data on the capital efficiency of BAL allocated to Arbitrum.
Mike B | Baller
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