Alchemist are the awesome team behind Copper Launch, which utilises Balancer Liquidity Bootstrapping Pools to function. In the last couple of months, their project has helped drive more than $70m in trade volume through Balancer pools, and Balancer has successfully retained liquidity for the GRO project after its LBP on Copper. GRO has consistently been in the top 5 highest volume Balancer pools on ETH mainnet since its 80/20 pool was deployed.
Separate to Copper Launch, the Alchemist team have developed Crucible: an innovative smart contract wallet, which enables users to subscribe to reward programs & store their tokens securely within an NFT container.
When an LBP is completed, a key objective for Balancer is to retain the token’s liquidity on an ongoing basis, so we become the primary liquidity for their token. Alchemist have proposed building out a feature which allows LBPs to convert into a standard Weighted Pool after launch, with rewards issued via their Crucible product.
In order to retain these pools after an LBP, we need a mechanism to be able to issue BAL rewards via Crucible, otherwise projects are liable to migrate to competitors who do offer rewards instead. In exchange for providing BAL rewards, Alchemist will offer Balancer as the only exchange to do a migration to after an LBP, within the Copper Launch UI.
The liquidity mining committee proposes that we run a 12 week trial, with Alchemist granted 2,500 BAL per week from Balancer’s Ecosystem Fund, to distribute via their own reward programs, exclusively for projects which run LBPs.
Alchemist will work with LBP projects to design appropriate reward programs, and each reward program BAL is used to incentivise will be matched by at least an equivalent $ value in the project’s token (taken as the average sales price during the LBP for the LBP project’s token, and a 7 day TWAP for BAL).
The liquidity mining committee will retain the power to veto:
- Rewards for any post-LBP projects it believes may be a direct competitor to Balancer, or established to undermine Balancer in any way.
- Rewards for any project it believes is not high enough quality to warrant BAL rewards.
- Rewards for any project where the amount of BAL is deemed to be excessive, given the amount of liquidity likely to be attracted to Balancer by the program.
2,500 BAL will be distributed each week to a multisig wallet … (need to think of how we establish this process / what it looks like… don’t want something too high friction) … which can then be allocated on to crucible reward programs.
The 2,500 BAL distributed each week does not need to be used immediately by Alchemist, and will accrue for distribution in future weeks if left unused. The program will continue for 12 weeks or until the full 30,000 BAL is distributed, whichever takes longest.
None, when liquidity mining scripts are run each week, Balancer would distribute 2,500 BAL to the Alchemist multisig.
The primary risk is that Alchemist mis-use the BAL. As a team committed to building for the long term, and as an important partner building on top of Balancer V2 which will want to secure rewards in the future, I see this risk as low. The x of y multisig wallet would be used as a mechanism to ensure any single rogue actor could not divert the funds intended for this program.
I look forward to hearing any of the community’s feedback on this proposal. If we reach general agreement here on the forum, we’ll look to move this to a Snapshot vote on 29th October.
While this program is limited to 12 weeks initially, if the program is successful, and we seek to distribute BAL this way longer term. In a subsequent proposal I propose we look to source BAL from the 145,000 BAL per week currently used for Liquidity Mining. I believe the Ecosystem Fund makes sense as a source for this initial trial period.
We may also want to look at ways that we could make it clear to visitors using Balancer’s frontend that BAL rewards are available for a pool if they create a Crucible, but this doesn’t make sense for the initial trial. During the trial period, people will learn from incentivised projects how to create a Crucible and where they can claim rewards.