Balancer Grants: Wave 4 Final Report
Results, Learnings and Next Steps
The Balancer Grants subDAO program as it is currently running was established in August 2021 after a community discussion, which can be found on Balancer’s governance forum here and the snapshot vote here. The current wave will run until the end of June 2022 and had 46,425 BAL in the treasury for new grants.
How has the Grants subDAO been doing the last months, and where do we see ourselves go? Let’s find out below!
Learnings
As a community-led grants program, we want to be transparent about our learnings. We believe they can bring the community forward and help build out a bigger Balancer ecosystem. If you are more interested in the results of this grants round, its grantees and the numbers associated with it, then you can skip towards the Grant Achievements section.
Looking back at Wave 4 and its goals
In the previous Wave 3 Final Report, we saw there had been in increase in grant applications with the market shifting bearish, making capital less easy to come by. This wave has been no different with 54 applications to date to be assessed by the team. We had noticed that some of the grant applications were lacking justification or not aligned with the Balancer grants mission so a grant application guide was developed and made available to potential applicants. This can be viewed here.
We have moved our focus away from education and marketing sponsorships, leaving that to the Balancer DAO marketing team and focused more on funding projects building dapps and creating SDKs/tooling/documentation to assist further building on Balancer to expand the ecosystem of users and developers alike. The idea being to create a sustainable feedback loop to grow Balancer across DeFi.
Wave 4 Learnings
Treasury — There have been a few discussions over the history of Grants about the risk of holding BAL in the Grants Treasury and approving grants in USD in the event of a market turn down. With many grants running over a few months, the risk continues to build as a significant amount of milestone payments are committed but outstanding in USD amounts. The uncommitted BAL in the treasury has been slowly chipped away over this wave leading to a freeze on grant approvals to ensure existing grantees will be paid.
The two ways to mitigate this risk to the Grants program going forward are:
- All grants and milestones are approved in BAL amount
- Swap BAL to USDC to be held in treasury
Going forward our approach will be #1 with our justifications as follows:
- Grantees should be aligned to build value to Balancer and BAL
- Limit BAL sell pressure
- Up to grantee to sell to USDC or other token as required for their personnel
The risk with this is that with a large drop in BAL price, a grantee may not have the required incentive to complete the remaining milestones. At this point it is up to the Grants committee to re-assess the value of the grant or cut their losses. It will avoid the situation where Grants’ Treasury cannot payout the grantees. Conversely, if the BAL price rises, grantees are rewarded.
From our SP proposal, we have had requests from the community for more transparency in our decision making and grant progress so we are addressing theses by:
- Posting to our Notion page the grant decision matrix used in our process with commentary to be updated every 1-2 weeks
- Live and completed grants page to be more detailed and updated monthly or upon major milestone competion
Grant Achievements
After receiving 54 applications, 7 projects have been approved for grants for a total of $166,100. This total value is down from previous waves and we hope to pick back up next quarter to really get the ecosystem expanding.
This wave, most of the grantees funded were projects building dapps and creating SDKs/tooling/documentation to assist further building on Balancer to expand the ecosystem of users and developers alike. The idea being to create a sustainable feedback loop to grow Balancer across DeFi.
This focus will continue into the next wave of grants to be assessed by the committee.
Grantee Updates — Building
The program is proud to present our grantees and their updates in alphabetic order:
Over the time Atlantis has vastly improved our performance & updated the servers across 3 continents. The BAL clubhouse and integration is ready and their team will soon update the NPCs to custom ones for in-game access! On top of this, Atlantis has added Snapshot NPC, so users could vote inside of the clubhouse itself making governance a social event. We’re looking forward to discussing more about BAL City in the coming weeks, and are ready to BUIDL!
- Cron Finance
Cron Finance is developing TWAMM on top of Balancer via custom pools. They successfully prototyped TWAMM specific virtual order features and have started the gas optimization work. For the next steps they are focused on leveraging advanced Vault features, in-depth numerical analysis, and completing security reviews before their beta release in the upcoming months. You can learn more about their progress on their twitter: https://twitter.com/0x70626a.
Grant is to to develop and implement bots for security and real-time monitoring on Balancer smart contracts. Nethermind has 7 out of 9 bots already developed. Almost all of them are awaiting review, only one of them was reviewed so far. Our devs are already working on the remaining 2 bots, so they will be finished early this week. Reviews will also progress through the week. You can follow all our progress here: https://github.com/NethermindEth/Forta-Agents/pulls?q=is%3Apr+label%3ABalancer+
2 more PRs should appear there soon and the current ones should start being merged. We are very excited to be able to have a team of this caliber furthering the security of Balancer via their real time monitoring solutions.
- Javier SDK
Javier is working closely with our technical mentor John Grant (jguk) to expand our SDK. So far they have been communicating over the API of the weighted pool creation logic, and building failing tests that will need to pass in order for the work to be complete. Javier will be wrapping up work as planned and have weighted pool creation as part of our SDK in the coming weeks.
RealEstate Exchange has finished all the features and UI work, and is preparing for the launch of managed pools in order to integrate tokenized real estate assets into a dynamic custom architecture. On the project front, integrating Verifeye for nearly instant KYC verification is near completion. Furthermore, RealEstate Exchange got clearance from the German Federal Financial Supervisory Authority (BaFin) that BRICK is NOT a security and hence is treated as a utility token. This fosters major future potential for their market case in terms of regulatory compliance. A promising future for RealEstate Exchange will correlate to a fruitful integration with Balancer Protocol in the near future.
Stefan has begun this grant in May with the goal of to add full Balancer V2 support to Delphereum. Delphereum is a web3 implementation for the Delphi programming language that allows for development of native dapps. To date, the Vault is almost entirely implemented, including batch swaps and events. He has developed an app for macOS and Windows that demonstrates the progress which can be viewed here: https://github.com/svanas/balancer/releases/latest. Next month, Stefan will wrap up the demo app, write a medium.com article, and publish it on ethereum.org to finish out the grant.
- Tracer DAO (Grants 1&2)
We are currently building out the ERC4626 compliant Balancer LP token vault. This vault takes in Balancer LP tokens and compounds rewards in the native token. This will enable us to settle derivative markets in BLP tokens. Once this is ready and deployed, which we expect to be within the next month, we will be working on the UI to enable Balancer / Tracer users to deploy markets using these ERC4626 wrappers.
Verified has been working with Balancer to develop custom pools for issuing and trading regulation compliant security tokens. The custom pools integrate traditional financial service workflows with Balancer’s decentralized exchange. Two pools — one for issuing new tokenized assets, and another for trading tokenized assets have been fully implemented. Since these pools are integrated to traditional finance organizations and workflows, the pools are managed by an integration to our platform that connects to traditional financial institutions such as investment banks, brokerages and asset managers. This integration work is also complete. The subgraphs for both pools have been implemented. The SOR integration is almost done. The only work in progress is testing the subgraph/SOR with the mock balancer front end. Verified is expecting two firm issuances to occur after their launch already, bringing a large diversification and new market reach to Balancer Protocol.
XS Finance is building out Time Weight Asset Market Manager (TWAMM) functionality for Balancer. The goal of TWAMM functionality is to execute large trades over a period of time in a way that reduces slippage and gas cost for the party executing a swap. This grant is planned to span over 3 to 4 months and is broken into four phases. The first phase (finalizing the approach and specifications) has been completed along with most of the second phase focusing on implementation. Local testing has been completed to be deployed on a testnet with assistance from BLabs. The third and four phases will include the development of a web app and the ultimate launch.
Finalized Grants This Wave
We have had a number of grants that have successfully reached all their milestones this wave. In addition to these, there are 2 grants which have finished before all milestones had been successfully delivered. They are discussed below
- Armada Research
This grant covers the creation of an optimization algorithm. Since Wave 2, the team has been carrying out their research around school commitments and produced an academic paper this wave. Due to the introduction of veBAL and the distribution of emissions through voting and bribing, the grants committee and Armada Research have decided to discontinue this grant as it is no longer applicable to the Balancer platform. The team produced some incredible work and clearly have big things ahead of them. The Balancer Grants team wish them all the best and look forward to seeing a proposal at some time in the future.
Andrew Joia Garde returned for a second grant after his successful delivery in a previous wave and now has two impressive completed grants with the addition of this SDK for Rust on Balancer. As of this writing, the pre-release alpha version is out on https://crates.io/crates/balancer_sdk and has already had over 360 downloads. It is fully documented here https://docs.rs/balancer_sdk/ on https://docs.rs, and the repository exists here https://github.com/drewdrewthis/balancer-sdk/tree/develop/balancer-rs on Github.
Creating the Rust SDK for Balancer was great and I’m super happy to be able to not only contribute again to the Balancer ecosystem, but also now to contribute to the Rust community supporting web3 development.— Andrew Joia Garde
Halo DAO has finished and demonstrated to the Balancer Grants committee all the following:
- 3 major functions: FXPool.onJoinPool(), FXPool.onExitPool(), FXPool.onSwap() along with all supporting oracle interactions, invariant logic and LP fee minting.
- UI integration is finished
Halo DAO has also deployed a working instance of this unaudited code to arbitrum (using test tokens, but production oracles until audit is done) and have just sent the code in for quotations from various auditors as of 6–22–22. They target to finish the audit by end of July and if no major problems are found, intention is to officially launch the FXPool custom pool by August
- mistX
mistX was awarded a grant in Wave 3 to integrate Balancer pools (with focus on boosted pools) with the mistX swapping engine. Due to a number of contributing factors and market conditions, the Alchemist project has sunset mistX, more information on this can be read on their post here. It’s never good to hear about projects discontinuing, but we look forward to seeing what the team move onto next.
- Protofire
Protofire completed a survey of the Balancer community among various levels of investment, producing a detailed report with findings and recommendations to improve the platform and encourage further adoption of the protocol. They delivered results quickly upon receipt of 53 responses and 5 one-on-one interviews. The report has been distributed to Balancer Labs to assess recommendations and implement accordingly. Projects leading from these recommendations will be funded through Balancer directly or Grants depending the projects’ specifics.
Skytale is a DeFi curated ledger to consolidate on-chain activities into one single view and to prevent fraud by flagging transactions and preparing critical data for tax reporting. With data aggregated from an extensive and expanding list of supported networks and protocols, Skytale enables anyone to make more informed decisions about their investments and to be alerted to potential scams in the DeFi and NFT space.
Thanks to the Balancer grant, Skytale now allows DeFi investors and web3 companies to actively interact with Ethereum and Polygon liquidity pools offering yield farming and razor-sharp APR/APY analytics all-in-one.
Verified’s initial grant was completed early in the wave. They delivered on the code, product, and framework for their tokenized asset primary pools. Read their second grant’s update to learn more about their upcoming implementation of primary and secondary pools for live us.
Xeonus started the grant at the beginning of the wave with several web development goals meant to expand Balancer Protocol and Treasury Dashboard Analysis, as well as selected documentation expansion on these topics. Since then he has delivered a robust analytics solution related to pool performance and evaluation. The site highlights performance of different pools aggregated by chain, pool, tokens, fees, and a Balancer DAO treasury dashboard. (link https://info.balancer.xeonus.io/#/). His documentation requests are in the process of being merged into official Balancer documents and he looks to continuously improve this site for our benefit.
See his full grant report here: https://docs.google.com/document/d/1SbGr7swTUkFYyeDu1rsphDHZyegqNF_TYp9m43mhrQQ/edit
Grants Program Expenses
*at time of writing BAL @ $4.33USD
The grants committee had been given 46,425 BAL in total from the Balancer Treasury for Wave 4. Most of this was allocated towards grants, the rest was allocated towards support. As it stands, we have 71,724 BAL in the treasury, with ~18,625 BAL spendable (about 51,755 BAL @ is pledged towards grants and support, depending on price swings).
With the major market turndown, the Grants subDAO hit a spending freeze due to a considerable number of grants being awarded in USD when BAL was at >$15 USD with milestones yet to be met and paid. We stopped approvals with plenty to spare so committed expenses to grantees were not in jeopardy. Then once BAL price recovered and 2 grants were discontinued as mentioned above, approvals have continued again. With a new funding round to begin in July, the grants program will continue into the next quarter and beyond.
Next Wave…
With Balancer moving to a new Service Provider structure, we have published our proposal to the Balancer Forum and will be going to a Snapshot vote at the end of the month. Our budget request is for 100k BAL to continue to fund more and more projects that will expand the Balancer ecosystem.
The main change to come with the new wave is grants will be approved in BAL at the time of award, except in exceptional circumstances to limit risk for the Grants treasury and encourage grantees to be aligned with increasing BAL value. With an increasing BAL price this could mean huge gains for grantees.
Round Up Event
1st July @ 8:00am EST we will host a Round Up on Discord where our grantees can give a short update and we will end with a Q&A. You are all welcome to join us!
Wave 4 is ending, but grants will continue. Apply now!
If you are interested in supporting the development of the Balancer Ecosystem or want to build on top of the Balancer Protocol, this is your chance! Get started by filling in the Grants Application form. You can also check out our RFP page for inspiration!
Do you have marketing/sponsorship related opportunities you would like to discuss? Please check out the Marketing subDAO here and its own application form here.
For further questions about how the Grants subDAO works, check out the grants page, follow us on Twitter, or send an email to grants@balancer.community.
