✔️ TDP 38: Addendum to Pre-approve BPT Locking & Voting for veBAL

TDP 38 - Addendum to Pre-approve BPT Locking & Voting for veBAL

Simple Summary:

TDP 37 (Pre-approve BPT Locking & Voting for veBAL) proposed to use staked BPT (obtained from the 80/20 BAL/WETH pool) to reward BAL rewards to our own 80/20 MTA/WETH pool.

This TDP38 proposes to extend the BPT staking approval to a wider array of protocols that could be built on top of the veBAL framework (i.e protocols using BPT to redirect BAL inflation rewards).

Such protocols could be liquidity rewards redirection protocols & other exotic players using the BPT/veBAL primitive.

Abstract

The incoming veBAL wars if successful (which mStable assume will be) are very likely to see the rise of Convex/Votium-like protocols.
At inception, these new-lego pieces will seek to attract BAL stakers & Balancer Liquidity Providers (BPT holders) through aggressive Liquidity Mining campaigns.

mStable with its BPT holdings could be an early participant in these veBAL wars and choose to take advantage of these substantial and momentary liquidity mining rewards.

Motivation

Allowing BPT locking/staking on other protocols beyond the Balancer original interface would still enable to redirect rewards towards MTA native pools while getting an extra opportunistic exposition to these platform native tokens, which could turn out to be extremely profitable.

Rewards are spread over a fixed number of epochs, very high at the beginning and divided by the number of participants per epoch. Hence, there is a strong first-mover advantage in staking first on these platforms to get a large portion of the native token rewards.

As an example, Votium’s first round was 58.82x less subscribed than the 14th one.
This under subscription had a direct effect on the ROI early participants had on their bribes: a $ bribed on Votium was earning 6.58x higher CVX rewards during the first round compared to the 14th one


mStable was an early participant in the Convex/Votium wars and saw a huge spike of TVL thanks to this in November 2021:

Specification

  1. Analyse in-depth the potential alternatives to locking mStable BPT token holdings (contracts review, team background check, early platform adopters feedback, Balancer native team feedback)

  2. Lock current BPT allocation in Balancer staking/locking contract OR in other staking/locking protocols using BPT to redirect BAL inflation rewards

  3. Delegate voting power to the Governance Coordinator address to be able to participate in gauge voting

  4. Use voting power to vote for the Pool(s) on Balancer OR in other staking/locking protocols using BPT to redirect BAL rewards according to the outcome of the vote

  5. Compound rewards back into BPT tokens to increase gauge voting power in perpetuity

  6. Compound and liquidate rewards from the staking/locking protocols using BPT to redirect BAL rewards on a periodic basis to increase the BAL rewards for the mStable pools

Next Steps

Pending no significant changes to its content, this proposal will be taken to a Snapshot vote on Monday, the 4th of April 2022 .

Voting will be open for a 5 days window to give adequate time for a concurrent discussion. Governors can change their vote at any time should the discussion sway their decision. We look forward to hearing what MTA token holders have to say and seeing how they cast their votes.

Definitely in favour of this, and given the time constraints around this and the overall positive sentiment on TDP 37, we will be moving this to a Snapshot Vote today.

I’ll also add different proportional percentage values to the vote, so we can capture the correct amount of risk allocation in this proposal.

Thanks a lot for bringing this up, and excited to be amongst the first DAOs to leverage this new tokenomics model from Balancer! :sunglasses:

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I agree, that we should put this proposal together with TDP 37 and expedite the process for this one since it is timely and an extension of the previous proposal that is being voted on as well.

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This proposal is now live on Snapshot, and Meta Governors have until this Friday to cast their vote!

voted! thanks @mZeroNine

This proposal has resolved unanimously in favor, and up to 100% of the BPT owned by the Treasury can be used for platforms built on top of the veBAL model.