[RFC] Use GTC from Ecosystem Fund to Provide GTC/WETH Liquidity on v2

Governance
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Background

Per Fernando’s message here Discord the ecosystem fund has been air dropped 17,451 GTC as part of the GTC token launch.

Core Proposal

Instead of letting this sit idly for who knows how long, I propose we provide liquidity to the existing GTC/WETH 0.15% fee pool on v2. As part of this proposal, I will ask Gauntlet to begin to manage fees for this pool. This sets up our first long term yield opportunity in the ecosystem fund/treasury. I think the GTC/WETH pool is big enough to sustain a single asset add of this size with minimal slippage but we could look into trading 20% of it for WETH then supplying with no price impact.

Dependencies

Presumably Balancer Labs has sole control over the ecosystem fund private keys. They would have to execute the necessary transactions.

Risk Assessment

GTC could go to zero, but even if we don’t provide liquidity the token would go to zero in our wallet. There could be a security vulnerability in v2 that drains our liquidity with no recourse to recover it.

Open Questions

None that I can think of. Hopefully I followed the new process correctly. Will check back on this in two weeks to move it to the proposal phase.

2 Likes
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Sounds good to me. I’d suggest doing the swap through matcha/1inch for the 20% eth though, no point us taking an unnecessary loss of ~$1k, unless putting such a trade through with lower slippage is significantly technically challenging for the multisig (in which case it’ll do).

When we begin collecting fees I generally support us deploying the treasury funds into pools as well. It could be very useful for bootstrapping some strategic pools.

Once we have asset managers, circuit breakers, etc… Could do some really cool stuff, like a big treasury pool with lots of assets which we use to provide liquidity across a whole bunch of assets. Replace/weight assets in that based on what pairs we want to strategically provide deeper liquidity for across Balancer.

2 Likes
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agree 100%. Can’t wait to see all the “cool stuff” and proposals you have in mind

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I should add I don’t think the ecosystem fund should get BAL rewards, so when staking contracts come out we would not stake this position. Until then we’d earn rewards unless there’s a way to prevent that.

1 Like