Approve Balancer 2pool (BB-A-FRAX | BB-A-USDC) AMO, FXSGauge & Bribe Pilot Program


Mark11 (Fraximalist)


This group of proposals (to be voted as three separate proposals) - seeks to approve an AMO for a 2pool (BB-A-FRAX | BB-A-USDC) on Balancer, an FXS gauge for that pool, and a pilot bribe program for the Balancer ecosystem.

Background & Motivation

Frax has become the master of the Curve wars and Balancer is another frontier. There is a lot of utility and liquidity over at Balancer making use of its unique product offerings. For example things like 20%/80% pools which many protocols prefer for governance token liquidity, and LBP for token launches coordinated through PrimeDAO and Fjord Foundry. Also protocols like Olympus are stationing their main liquidity pools over on Balancer.

Balancer also has the ability for protocols to have deployed liquidity in boosted pools such as the pool referred to in this proposal. These pools have the following advantages:

High Capital Efficiency
Boosted Pools are designed to deliver high capital efficiency by enabling users to provide trade liquidity for common tokens while forwarding idle tokens to external protocols. This gives liquidity providers the benefits of Aave on top of the swap fees they collect from trades.

Superfluid, Consolidated Liquidity
Nesting pool tokens creates a powerful avenue to make swaps between any stablecoin and any aToken in the Boosted Pool. On top of that, any token in a pool with a Boosted Pool Token can tap directly into the underlying tokens.

Example of an already deployed USD pool

We need FRAX to be everywhere and Balancer is likely to be a part of the overall mix when it comes to medium-term liquidity destinations.

Relevantly, Aura proposes to be the Convex of the Balancer ecosystem and AURA holders direct the veBAL locked as auraBAL. It can be more economical to bribe AURA holders than veBAL holders directly to direct BAL rewards to a preferred pool.

Presently there is a profitable opportunities for bribing veBAL or veAura holders.

The 2pool
The 2pool (BB-A-FRAX | BB-A-USDC) would be deployed with majority of liquidity as aFRAX and aUSDC and allow trades between FRAX and USDC in a capital efficient manner - while earning lending interest from Aave. It would also allow nesting of other tokens with the 2pool for example frxETH-2pool, FXS-2pool, FPI-2pool, etc, and allow direct trading between USDC or FRAX and the nested token (for example ETH->FRAX, ETH->USDC). This can also serve as a rail between Curve liquidity and Balancer liquidity. Given we have already deployed an AMO using FRAX deposited to Aave that liquidity can be partially or wholly redirected to the 2pool.

The 2pool has been deployed by Balancer core team at Balancer

A veBAL gauge has already been approved by Balancer governance here Snapshot

Security & Risk

The Balancer v2 codebase was audited by Trail of Bits and Open Zepplin in 2021 - see Audits - Balancer


This set of proposals seeks to approve:

  • FIP-151 - an AMO for 2pool (BB-A-FRAX | BB-A-USDC) on Balancer to be calibrated with parameters by core contributors with a limits of 6,000,000 USD value in the first month and 12,000,000 USD in the second month
  • FIP-152 - Approve FXS gauge for 2pool (BB-A-FRAX | BB-A-USDC)
  • FIP-153 - Approval for up to 100,000 USD worth of FXS or cvxCRV in bribes for a pilot bribe program to veBAL or AURA holders (only where profitable to do so) in order to boost liquidity to the 2pool(BB-A-FRAX | BB-A-USDC) or other pools pairing with 2pool (BB-A-FRAX | BB-A-USDC). The trial program will run for three months. Earned AURA or BAL may be compounded where appropriate, treated as protocol income to be used for operations or provided to veFXS holders

For: Approve proposal (each will be voted on individually)

Against: Do nothing


I see no reasons for Frax not to replicate its successful Curve bribing strategy on Balancer.
Two small notes:

  • Aave will release GHO soon and it will most likely be heavily pushed on Balancer, it would be good to start the program before their launch so its easy for Frax to benefit from their potential explosive growth;
  • I’m not sure why you would need to chose between bribing veBAL & Aura holders when our (Paladin) platform enables you to target both (+veTetu holders) in one go;

Looking forward to see this go live

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I think it makes more sense to start with a gauge proposal and then bribes, and finally AMO

The voting order can be as you like it ser - although, I would note, farming Aura and Bal through the AMO does not require an FXS gauge

That’s true (my comment was not technical), starting with a gauge can enlighten us about the community’s appetite regarding Balancer without committing too much. And I think we should post the second and third proposals with some delay after the first one.

I don’t agree with this chicken-egg thinking - we can start the AMO with diminimus amounts and slowly build up if there is volume over there. We need the AMO to get us going from cold start for the pool and we already have large amount of AMO liquidity in AAVE which can be used in this pool directly. If anything it should be AMO → Gauge → Trial bribe program in that order

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