Treasury Swaps Program GNO x BAL

Motivation

In April 2021, Gnosis and Balancer launched a partnership integration, the Balancer-Gnosis-Protocol (BGP). This proposal looks forward to strengthening the partnership and aligning the DAOs financially.

How?
-Financial incentives alignment: It will promote the Balancer-Gnosis-Protocol outcome in the best interest of both Gnosis and Balancer

  • Treasury diversification
  • Improved token distribution within long term players
  • Voting power for DAO proposals

Specification

Start a pilot program of 4000 ETH-equivalent GNO (BAL) distributed across 8 months. After the program, make a lookback, evaluate the results and define next steps.

Implementation

Use the open price of Coingecko for swaps.
GNO: https://www.coingecko.com/en/coins/gnosis/historical_data/eth
BAL: https://www.coingecko.com/en/coins/balancer/historical_data/eth

Option 1: GNO/BAL/ETH/DAI pool
Every Monday Gnosis (Balancer) adds 115 ETH-equivalent GNO (BAL) to the GNO/BAL/ETH/DAI pool on Balancer V2 using the last 7 days of open-price historical data average on Coingecko.

This would have the upside of concentrating liquidity in this existing pool and the downside of creating sell pressure for BAL and GNO against ETH and DAI.

Option 2: New GNO/BAL pool
Create a high fee GNO/BAL pool on Balancer V2.
Every Monday Gnosis (Balancer) adds 115 ETH-equivalent GNO (BAL) to the GNO/BALpool on Balancer V2 using the last 7 days of open-price historical data average on Coingecko.

This would have the downside of fragmenting liquidity (a new pool would be created) and the upside of not creating sell pressure for BAL and GNO against ETH and DAI.

Option 3: OTC deal
Every first Monday of the month Gnosis (Balancer) sends 500 ETH-equivalent GNO (BAL) to Balancer (Gnosis) treasury wallet. We use the last 30 days of open-price historical data average on Coingecko.

This would have the upside of not creating sell pressure (like Option 1) and being a simpler swap but the downside of not contributing to liquidity of the two tokens on Balancer like options 1 and 2.

Link to discussion on Balancer forum

2 Likes

To avoid liquidity fragmentation, would it be an option to replace the GNO & BAL components in the GNO/BAL/ETH/DAI pool with the LP token of the GNO/BAL pool. This way the there would be an ETH/DAI/LP_GNO+BAL pool?

1 Like

Thanks @claberus for the proposal!

I’m generally in favor of the proposal and def think that financial incentive alignment is important.
I think all three proposed options are solid, each with its own up and down sides.

Option 1: This means each DAO will sell its token for equal amounts of ETH DAI and the other DAO’s token. This provides the most useful liquidity but will give Gnosis DAO (and Balancer respectively) exposure to only 1/4 of the initial value into BAL. It is nice diversification but less of cross incentive alignment is achieved.

In light of this, Option2 will give 1/2 exposure and Option3 full exposure.

Given that both GNO and BAL has decent liq vs ETH so trades could be routed, I will favor the simple Option3.

2 Likes

Please select the the implementation option you prefer:

  • Option 1
  • Option 2
  • Option 3

0 voters