[RFC] Empower Ballers to Allocate BAL to Arbitrum pools


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 L2.

In addition to the technical requirements for deploying Balancer on V2, 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.

Core Proposal

Simply, I propose to Empower Ballers to allocate BAL to pools on the upcoming Arbitrum deployment of Balancer V2.

I think that discussion both here and in Discord can inform how much BAL should be allocated and where it should come from (BAL allocated to Ethereum and/or Polygon pools).


  • Arbitrum’s actual release date to the general public. Scheduled for August, but precise date has not been announced
  • Having Balancer V2 completely ready on Arbitrum (contracts, subgraph, UI, token list, etc)

Risk Assessment

  • We should be cautious about fragmenting LM Incentives across networks
  • Don’t want incentives to start before everyone can easily add liquidity

Open Questions

  • Should Ballers be able to allocate BAL to Arbitrum pools?
  • If yes, how much BAL should be allocated to Arbitrum pools?
  • Where should this BAL come from?
  • What kind of pools should be targeted?
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My thoughts:

  1. It would obviously be good to be able to incentivise liquidity on Arbitrum, and I’m not sure it’s worthwhile deploying without some incentives.
  2. I don’t think we should allocate this BAL purely from Polygon. Polygon rewards are about to ~halve with MATIC rewards stopping within the next couple weeks, and that will impact TVL. Cutting BAL further would likely mean our deployment on Polygon wasn’t particularly productive in terms of trade volume.
  3. We have a lot of pressure on ETH slots currently too, with various planned dual incentive & other launches next couple months.

Based on that, I think the best way to free up some BAL for Arbitrum would be to reduce the amount each pool in T2/T3 receives (across all networks), and introduce a T5 at 500 BAL/week. The additional slots created by reductions in T2/T3 would then be used to bootstrap on Arbitrum.

At some point next few months I’d say we probably do want to take a bet though on a particular L2, whether that is Polygon or Arbitrum. The reward fragmentation does impact network effects a fair bit in terms of how we can grow liquidity, and I’d definitely say we shouldn’t be adding in additional networks beyond Polygon & Arbitrum without removing incentives from one of those.

I guess it would make sense to try to match what we have for Polygon? Alternatively we could start smaller and then look to increase the allocation after a couple of months if Arbitrum seems to be taking away from Polygon in a substantial way. I think it’s going to be harder for Arbitrum to gain traction without their own token (likely to be much slower than Polygon was), although the design of their L2 is better from a tech/security standpoint from what I understand.

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There’s a ton of ways to come at this obviously, and my view of where we need to go with LM is not the view of the committee. There’s many issues that need to be dealt with regarding dead weight allocations but I understand it’s not the simplest thing to fix some of them (main net stable pool fees/A, polygon defi pool overlap, etc).

My old plan for arbitrum was to have some main net pools already configured and ready to migrate over to make it as easy as possible for LP’s. 3/4 token pools covering most blue chips, etc. But given where we are, there isn’t much choice but to cut most pool allocations on main net. Can move BAL/WETH over with 5k, remove at least 1 defi pool from matic to free up 2500, cut usdt/weth to 0, maybe usdc/weth as well, then cut most T3 pools down to T4.

20k BAL to arbitrum, 20k BAL to polygon with an eye to bump arbitrum allocation if it takes off hard. Meanwhile, work on proposals to un-cuck our main net stable pools and seriously consider moving away from 2 token pools so we can support liquidity for a wider variety of assets.

On the consolidation side I don’t see 3500 bal needed go towards GNO pools. While I’m a fan of it take the 2500 off of the 4 token pool and send it to arbitrum. Breaking 1000 off in the form of a T4 and T5 slots could also make the rest of the severing less painful.

With the vault and cow swap in full swing the way I understand it for consolidated swaps the 80/20 should be enough for GNO bulls and swap fees will all be in one place for it as well.

Open to thoughts as to why we need both pools as well.

@DavisRamsey @bakamoto20 In the interest of getting this proposal live on Snapshot ASAP, are you comfortable with phrasing along the lines of:

Authorize Liquidity Mining Committee to allocate Liquidity Mining Distributions to Arbitrum at a rate of up to 25,000 BAL/wk (the same amount they are authorized to allocate for Polygon). This empowers the LM Committee to have as much flexibility as they need in deciding how to balance LM Incentives between Ethereum, Polygon, and Arbitrum.

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At this moment it’s hard to imagine we’d go beyond 25k. Personally I’d go with authorize arbitrum allocations at the LMC’s discretion but odds are what you have will be fine.