I have some significant concerns about this proposal.
Firstly, I believe Balancer hasn’t shown a strong commitment to its presence on Arbitrum. Although they’ve been on Arb since late 2021, I haven’t observed substantial contributions to the ecosystem. Simply being present isn’t sufficient. We need to see tangible value-added work, and I feel like Balancer has been lacking in that department, and I’m sure many of you will agree with me. There are much better candidates out there to run a similar program.
Secondly, Balancer’s pools efficiency is a major concern. This inefficiency raises a red flag for me. If they can’t optimize their existing setup, how can we trust that the grant will make the ecosystem better?
The recent security breaches and hacks that Balancer has experienced are extremely worrisome. Before even considering proposing a grant, I believe they should demonstrate a robust plan to enhance security. Requesting 1.6m ARB is a substantial sum for a protocol that has been exploited multiple times in recent months, notably twice within a week!
I believe that this proposal requires significant improvements and a stronger commitment from Balancer before we can consider trusting them with a grant of this magnitude, given the current circumstances. Additionally, I’m not convinced of the necessity of this grant and how it will exactly benefit Arbitrum. It appears to primarily benefit Balancer.
I oppose the proposal. I believe it’s rushed and doesn’t align with the current needs of the ecosystem. Moreover, the recent security breaches are a significant concern for me, which is why I will be voting against.
Agree, this proposal is asking simply for too much.
Where is the net benefit to us ARB holders in these proposals.
Honestly not just Balancer but all the proposals so far are basically making mercenary LP and auto traders lick there lips in awe of the rewards coming their way potentially.
We need to see more realistic numbers here. This is a bear market after all.
A quick comment on the capital efficiency of Balancer vs Uniswap as mentioned here:
By design concentrated liquidity on Uniswap has a different set of target LPs from Balancer’s. Balancer is the place for lazy, non-active liquidity while Uni requires very active position management for it to make any sense.
IMO though the current fee of the pool on Balancer (0.5%) is way too high (Uni has 0.3%). I’d suggest the admin of that pool (not sure who it is but @Tritium will probably know) to reduce the fee to something like 0.1% asap. The volume and pool’s usefulness should then increase substantially.
Balancer has secured the second largest TVL for dexes on Arbitrum. Given that, it is clear that Balancer serves a core function within Arbitrum. Since May 1, 2023, Arbitrum TVL has decreased 26.6% while Balancer on Arbitrum has increased their TVL 4%. Amongst the general backdrop of this recent time period, Balancer has demonstrated their resilience. Their largest pool houses RDNT/WETH liquidity. It is clear that their resilience can be directly attributed to the Radiant dLP upgrade however, Radiant is also a pillar of Arbitrum defi.
Balancer is not an Arbitrum native protocol. Their largest contributions to the defi space have mainly been on mainnet. We do not believe that there should be a case against their proposal. 3.2% of the total allocation for grants does not seem unreasonable. We are of the general consensus that liquidity incentives can be for the greater good of Arbitrum. The attraction of liquidity through incentives has proven successful for Arbitrum. Many incentives programs attract mercenary capital. While the Arbitrum airdrop speculation drew many to the chain, the staying power of Arbitrum’s efficiency and user friendliness has proven strong as Arbitrum remains a leader amongst L2s.
Balancer has done a great job to grow Arbitrum TVL,
I hope they can get some grant, but they should improve their efficiency, hope we can see good pools like the ones you use with Gyroscope in Arbitrum as well to help solve this issue.
I’m not sure about the rationale behind your suggestion of a 0.1% fee for the Balancer pool, especially for volatile pools like RDNT/WETH. Uniswap V3 is applying a 1% fee tier for active LPs in volatile pools, and for passive LPs like the Balancer pool with the same pair, a fee of 0.5% is reasonable to compensate LPs for at least the inventory risk.
So your measure of grant application success is BAL emission flows to Arbitrum? LOL That is probably not what they are looking for, but let me save everyone some time, Balancer is maybe the least capital efficient Dex on Arbitrum. In the past week you did half the volume of Ramses with almost 10x the TVL. The stats for the last month paint an even grimmer picture. There was no diabolical strategy to distribute your first grant, it was simply spread over mercenary LPs who consequently dumped the farmed ARB. And now, without any effective strategy, and without any evidence you did anything productive with the first grant, you are applying for a second one?
Balancer has specific use cases, but it is a very bad fit for Arbitrum grants because of this lack of efficiency and a lack of a symbiotic method to distribute the grants that benefits everyone involved and the overall chain.
And $3.8m dollars is not kiddo play money for you to simply dump on your LPs and then pretend like it was a learning experiment, and besides it does not look like you learned anything at all!
Having worked with numerous protocols and Dexes on Arbitrum and beyond, I can say with confidence Balancer possesses one of the most professional and competent teams I have come accross.
Radiant would not be in the position it is today without the existence of Balancer’s ve80/20 pool. Radiant’s migration to v2 and transition from single-sided to 80-20 LP locking has facilitated one of the largest volatile LP pools on Arbitrum, and is the foundation of Radiant v2.
Along with 80/20, they have several key innovations such as Gyro E-CLP pools, and Xave FX pools that are deserving of the added interest and exposure a grant would provide.
The primary objectives of the proposal would benefit Arbitrum, and indeed Balancer has the requisite experience in incentive management.
Hey, Teddy from Notional here. We’ve used Balancer extensively for almost two years as our primary liquidity venue for $NOTE. Their 80/20 pool fits our needs really well and their team exhibits a very high degree of professionalism that we really appreciate. Additionally, Notional has used Balancer as a yield source for our leveraged products and we are very happy with the protocol’s performance. They have a very well developed ecosystem for users like Notional.
I can’t speak to the specifics of this grant, but I can say that Balancer is a high quality protocol that is supported by a high quality team and ecosystem. I think they have a lot to offer any L2, including Arbitrum, and I am supportive of any grant that encourages them to invest in the Arbitrum ecosystem.
Hey Figue from Paladin . The initial ARB incentive program is what led us to deploy on Balancer, and to start building there. I beleive such program will attract many more new projects
The discussion is quite long here. I can’t really add anything that wasn’t already said by all the parties here, but just add that the feeling is that Balancer here is getting more heat than others due to not being a native arbitrum protocol.
While I can understand the previous point, matter of the fact is that Balancer is a key player in DeFi space. Having good incentives, specifically in Arbitrum, is going to only be good on the long haul for this chain.
I support this proposal.
If the objective is to facilitate more volume and LPs have other types of incentives (other than only swap fees) then lowering the fee is definitely an option.
I’m not claiming this is the best option here, I just wanted to mention reducing the fee is an option.
Are these distribution numbers correct?
On the balancer page RDNT WETH pool has 5% APY on ARB with $40m locked and other pools with less than $5m locked have also 5% APY , meaning that seems much more ARBs are flowing into the RDNT pool?? That has the same volume than all the others or lower.
Many RDNT/WETH pool tokens are not staked in the Balancer Gauge earning BAL, ARB and potentally AURA emissions, but are instead locked in dLP to participate in Radiant tokenomics and governance.
The Balancer Gauge provides a liquid option for RDNT lps, and the emissions are generated by Balancer’s recycling a portion of the fees to bribes.
Back to the topic of proper volume contests and wstETH/ETH:
I asked our data team to do a bit more research on wstETH/ETH volume. We adjusted the a-factors on the pool to be much higher (from like 50 to 5000) and dropped fees to be competitive in late August. You can clearly see the effect on this plot of relative wstETH/ETH swap volume made on Arbitrum over 1inch fusion (good flows, not MEV):
This is Jasper from the Rocket Pool community. I serve on the Incentive Management Committee. This is a wonderful proposal that will bring deep liquidity to the Arbitrum ecosystem. We have long been incentivizing liquidity on Balancer on a number of networks and would love to match some of these incentives to provide a bonus impact boost to their effects.
We hope that these deep liquidity pools are utilized by the broader ecosystem to develop a flourishing ecosystem.
First and foremost: Thank you to everyone who took the time to come here and talk about Balancer and our Proposal. There were some very interesting conversations. This is a good community.
We have made final updates to our proposal for this phase of the Grant Application Process. We stand ready to make further changes when collaborating with or at the request of the review board in the next phase.
