I have continued to promise I would come forward with a proposal for how to better manage gauges. In the end, I don’t think killing gauges is the way to go, but calls to try to limit them are sensible.
Below is a proposed framework and some ideas how everyone can think about trying to bring the ecosystem into compliance. I look forward to your feedback, especially around exception criteria.
Desired State:
No gauge should take over 10% of all veBAL unless it granted an exception by balancer governance.
Criteria for exception include, but are not excluded to:
Boosted pool yielding over the average boosted pool fees per BAL emitted
Significant contributor to ecosystem revenue
Significant partnership that provides good value to BalancerDAO in exchange for excessive emissions (Aura)
Exceptions should include a new healthy maximum or a way to compute one based on measurements of the protocol/ecosystem.
All graviAURA votes for a pool that would bring a pool out of bounds. 90% of the excess votes will be directed to follow core pool bribes and support the balancer ecosystem. 10% will vote for BADGER/WBTC. All bribes earned through this voting will be sent to graviAURA HODLers.
AURA:
Status: to be proposed
Any AURA voting that will push a pool outside the framework will be ignored, with the votes instead being distributed evenly to other pools.
Balancer:
Status: Needs more development - can wait
Any gauge that is outside the framework will be temporarily killed once it has emitted 10% of veBAL worth of emissions, it will be reenabled at the beginning of the next voting round.
Another method that just turns gauges off and on to limit them from emitting more than the framework allows
Enacting this in Governance:
Recommend that balancer enact snapshot governance to confirm the desired state, and request that all DAOs work to move the ecosystem into compliance.
Each DAO may then handle governance around changes to help bring the system to the desired state according to their own processes and in their own timeframe.
In the end I think we all want to build a healthy and sustainable ecosystem
I appreciate the effort you’re putting in here. The two points in the Balancer section are not feasible though I think. Neither the DAO Multisig or the Emergency subDAO can realistically be tasked with temporarily killing gauges then re-activating them, main reason being the overhead required to manage such a thing plus it would create a pretty bad UX for LP’s I imagine.
Forcing a governance vote whenever a pool exceeds 10% of the vote feels like a lot of potential overhead. I can see a future where we have many pools that might break this threshold, most of them probably very good pools, and we’re forced to rally votes to protect them from being killed because they’ve become too successful (?).
On technical side: So maybe it makes more sense for balancer just to set guidance for others to try to follow? If in the future, it turns out that veBAL remains the main source of desired state violations, and these violations are deemed catastrophic to ecosystem health, I imagine someone can figure out a way to deal with it.
On exception governance:
There are currently 2 pools getting over 10% of veBAL. One of them is probably an exception (steth).
Looking back at the history of voting here:
It appears that stETH is the only pool that has actually ever voted with more than 10% of veBAL, excluding events that the balancer community has found problematic. So it seems to me like there would not be so many exceptions nor would they be so frequent. The initial proposal could come up with a starting list, or a framework that auto-excepted.
that is only the case because the CREAM whale controls 30% of emissions. when that changes more pools will reach 10%.
From me there is no guidance to follow really. Going forward we must be very careful about adding gauges that are not likely to generate revenues. Over time as more core pool gauges are added those voters who only vote for non-core pools will be diluted and the problem will solve itself. This is preferred imo over starting a campaign to remove gauges that cannot generate fees but are otherwise legitimate gauges. The enforcement mechanism of this framework will inevitably lead to this outcome from what I can see.
No gauge should take over 10% of all veBAL unless it granted an exception by balancer governance.
I think any policy that’s based on a set % of veBAL emissions is doomed to fail.
For example, what stops a large veBAL holder from voting for a tokenX/ETH gauge, getting it delisted, trading it along the way, and moving on to the next victim?
Who would want to enter the ecosystem, rely on it for providing sustainable liquidity, and build things on top of it - if their gauge can be removed by a large voter with a snap of a finger?
The proposal is not that gauges were removed if they violated the rules. Read again. The proposal very specifically set guidelines and then asked each DAO to work to find a way to try to maintain them without killing gauges other than perhaps to also reenable them on a schedule to regulate flow.