Biaf
August 3, 2023, 1:28pm
1
Treasury League and Development League
The IIP transfers IDLE to the Treasury League multisig as part of the activities behind the launch of the IDLE 80-20 pool on Balancer.
At the beginning of July, @Davide published an analysis focusing on multiple improvements to IDLE tokenomics and related DEX activities . One of the proposals was the launch of an 80-20 pool on Balancer
1. Launch an 80-20 Balancer pool
Idle DAO was one of the early adopters of the Smart Treasury , a 90% IDLE - 10% WETH pool based on Balancer v1. With the release of Balancer v2, Idle DAO discussed its composable nature for interest-bearing tokens and decided to launch the Idle Boosted Pool at the beginning of this year. […]
The launch of an 80-20 IDLE/stablecoin pool would help foster volumes even without direct trades, as the use of a stablecoin pair would provide an alternative venue for arbitrage opportunity (with ETH price changes).
The target stablecoin can be chosen according to the following criteria:
single-side assets like USDC or DAI;
3pool (DAI/USDC/USDT), which is almost unused on Balancer;
Balancer Boosted Aave V3 USD (bb-a-usd ), which benefits from boosted APR (2-5%) but increases swap costs;
emerging stablecoins like R (or the pair R/DAI), GHO, crvUSD. There are no pools with these last two assets, thus the technical feasibility needs to be explored.
The use of 3pool or bb-a-usd brings limited advantages, considering the stablecoin part represents only 20% of the pool’s share. The use of R would represent a potential risk for liquidity providers due to the short longevity compared to USDC/DAI, but it could expand LPs audience with a new ecosystem.
Idle DAO can deploy a size equivalent to the liquidity locked in the Uni v3 concentrated pool (~40k), considering it would only need $8k in stablecoins.
Davide also suggested using protocol-owned liquidity to incentivize the liquidity formation phase in the pool and to apply for a BAL grant
2. Incentives for veBAL voters as a form of LM
With the launch of an 80-20 Balancer pool, Idle DAO can include ad-hoc incentives for veBAL holders to increase pool rewards. Idle Leagues are already familiar with the incentive mechanism and used it on Warden to raise up to $1.8m on the bb-i-usd
Considering that the current multiplier is 1.2-1.3x, this means that $1 worth of rewards would bring a higher value of AURA+BAL incentives. Idle DAO can allocate protocol-owned liquidity (POL) in the pool, swap accrued rewards into IDLE and reallocate the tokens in future incentives, generating a positive-sum return from an ecosystem perspective.
This flywheel has two potential outcomes:
The DAO increases POL thanks to the incentive multiplier
Other users deposit liquidity in the pool. DAO’s rewards are diluted, so lower bids are placed in the next rounds. If LPs maintain liquidity, the acquisition cost is lower. If they remove funds, we come back to the previous scenario
The use of an 80-20 pool would reduce liquidity provision barriers for IDLE token holders, given the limited pool share of non-IDLE assets, and incentivize its decentralized nature. This activity does not generate volume directly but could help create deeper liquidity in a more efficient way. […]
3. Use 80-20 Launchpad to apply for a 25k BAL grant
Balancer Launchpad got media coverage after a series of tweets from protocols supporting the 80-20 model. The 8020 Launchpad page states that “this program is intended to support all systems which involve the staking/locking of 8020 BPT. ve8020 is one such system and it’s a convenient shorthand to use, but this program is not limited to “ve” systems only.”
Protocols that implement this model or equivalent on Balancer are eligible for an initial grant of 25k BAL (~$125k at the time of writing). All BAL granted through this program must be locked in veBAL, and the beneficiary will provide the 20% share of ETH (~$31k) to pair tokens and form ~$156k liquidity in 80-20 BAL/ETH pool.
After launching a 80-20 pool, using POL to seed the pool, and placing incentives to foster liquidity provision, this grant would represent an important addition to the flywheel.
By staking $156k in BAL/ETH liquidity for the max duration, Idle DAO will unlock 12.5k veBAL votes. Users that deposit liquidity in 80-20 IDLE/stablecoin can be entitled to choose veBAL allocation and get rewarded by other protocols interested in acquiring their votes. […]
Idle DAO voted positively in launching the pool, starting an incentivization campaign and applying to the Balancer grant
Idle DAO Leagues deployed the pool and started the incentivization process on Warden . The Launchpad proposal to the Balancer DAO will be released soon and shared in our governance.
The code for the IIP-38 consists of one action.
IIP-38 actions:
The IDLE amount to be transferred is composed of the following entries:
122,285 IDLE already used to seed the Balancer 80-20 pool
18,000 IDLE to fund the incentivization campaign until the M3-2023 end (8 weeks). Assuming a 2,077 weekly budget.
The temperature checks for the above proposals have already been successfully closed . When the IIP code will be ready, we will launch the on-chain voting phase.
2 Likes
Biaf
August 10, 2023, 9:13am
2
HERE 2023-08-12T18:30:00Z
HERE 2023-08-12T15:30:00Z
The threshold to make the off-chain poll valid (both metrics should be reached):
20% of circulating stkIDLE voting the poll (min. ~124k stkIDLE)
at least 70% on the same option.
The stkIDLE voting calculator will be used to calculate the final results.
Make sure you have been delegated to participate in this voting round
1 Like
IIP-38 passed with 1,354,703 $IDLE votes in favour and has already been queued for execution
3 Likes
Cast your on-chain $IDLE vote here: 
End date: 
