The Balancer Report: Exploring Hiddenhand
The blockchain ecosystem is a multi-layered structure. There are L1s, L2s and even L3s. There is however another layer that is often overlooked. It is commonly referred to as “the social layer” and the term encompasses a wide array of concepts and phenomena ranging from social consumer apps to complementary tooling.
While most of these social apps form their own niche, some coordination features have made their way to the wider DeFi space. Hiddenhand is a prime example of this. This week we are looking at how it helps foster decentralized incentive alignment and ensures that coordination happens in a seamless and continuous manner.
Before we take a deep dive into Hiddenhand’s role in incentive alignment, it is important to take a detour and explore the underlying concept of decentralized incentive distribution.
Protocol incentives come in different shapes and forms. Some can be allocated in a fully predefined centralized manner while others are always in motion with dynamic distribution structures. The latter case reflects the notion of decentralization as well as some of its challenges. If decentralization is to be embraced, there needs to be a transparent system for allocating dynamic and ever-evolving incentives. This means that there is a need to align incentive providers and those benefiting from them.
This raises the following question: how can incentives be allocated and distributed in an efficient yet fully decentralized manner which works for everyone involved? HiddenHand does just that through governance voter engagement. It allows protocols to deposit incentives and direct them towards priority gauges.
Here’s how it works for Balancer:
- Balancer has a market for BAL gauges
- Protocols deposit incentives for veBAL voters
- veBAL voters vote based on their incentive assessment
- Pools with gauges receive emissions based on the results of said votes
This creates a new incentive layer for governance token holders which encourages them to stay involved with the protocol and its latest developments. It also establishes a clear incentive growth framework for protocols that are part of the Balancer ecosystem. Instead of searching for individual solutions their teams can leverage the existing infrastructure and not only channel incentives the way they want to, but also stay in tune with what other participants are doing and adjust their approach accordingly.
Although social coordination is often overlooked, it remains one of the most important underlying DeFi concepts. It powers up incentive structures and keeps participants aligned and incentivized. You are welcome to check out Balancer’s current set of gauge bribe votes here.
It is now time to explore the latest ecosystem news:
Balancer and Frax launch a yield-bearing $sFRAX stable pool.
The pool has been deployed on Arbitrum. It leverages Balancer’s advanced technology to ensure that sFRAX’s internal yield is reflected correctly and that LVR is mitigated.
You can explore the pool here.
Aura Finance shares their 2023 recap.
The protocol’s voting power share doubled which was in part thanks to leading protocols such as Aave getting involved. The protocol also expanded to Arbitrum, Polygon, Polygon zkEVM, Optimism, Gnosis and Base. Last but not least, Aura played an important role in fostering LST growth. It helped onboard protocols such as Rocket Pool and Ankr to core liquidity pools on Balancer.
Gyroscope’s TVL has reached $42 million.
The protocol currently has a variety of active incentives on its pools including Balancer’s native rewards and an additional Aura boost. The latest TVL milestone was made possible by concentrated liquidity pool growth as well as rising GYD adoption. Gyroscope’s E-CLPs also account for 7.5% of Aura’s TVL.
BeethovenX contributors share the results of the latest gauge vote.
The total number of votes reached 46,625,566 with the protocol ROI standing at 168%. Notably one of the top five pools of this round is deployed by Layer Zero, which shows the versatility of BeethovenX incentives.
You could learn more about the full results here.
As always, HiddenHand incentives can be explored here, the current round ends on January 4, 2023.
Balancer: TVL and Stats — Defilytica
Balancer’s Total TVL across all networks is sitting at $808,41m.
The Total Mainnet TVL is $510,34m with a dominance of 63,05%.
Speaking of protocol volume metrics, in this last week we were able to see a cumulative volume of $193,58m.
As for protocol fee metrics, we can verify cumulative fees of $257,70k.
As for our liquid wrappers, they are under the following parity to veBAL:
This section will list the top three expected pools to receive most of the next period’s emissions. Voting is open for four more days, and the next period is scheduled to start on Thursday at 00:00 am UTC.
- Mainnet — rETH / WETH — currently at 9.83%
- Mainnet — KNC / USDC / WETH — currently at 8.77%
- Arbitrum — GOLD / wstETH / USDC — currently at 5.48%.
You can find an overview of the current LM incentives on the Balancer Mainnet below:
This voting round is ending with 2 new Snapshot votes including the following:
- [BIP-523] Enable LUMIN/rETH Gauge with 2% emissions cap [Arbitrum]
- [BIP-524] Seed BAL Liquidity on Optimism
Stay tuned for this week’s Governance Recap to learn about the results.
This time Dubstard shares his monthly report with us. Do not miss it by clicking here.
And as usual, this week Dubstard shares another set of security tips that will help you stay safe:
- Do not open any links sent to you in DMs from any one pretending to be a “mod”, “admin” “staff member” and etc.
- Do not message anybody offering help if you DMs them first, those are scammers.
- Remember, Balancer operates primarily under the following domain: https://balancer.fi/
- Never share private keys, seed phases with anyone.
- Remember, there is NO AIRDROP!
- There is no compensatory $BAL distribution and any website or user promising otherwise is trying to scam you.
- There is no compensation for the recent Ledger incident. Don’t fall for “compensation” scams.
Balancer has a flourishing ecosystem. You’re welcome to contribute to it whether you’re a dev, a community person, or a graphic designer! We strive toward onboarding every new member in a smooth and personalized way.
Join the Ballers and start your Balancer journey now: http://discord.balancer.fi/
Are you looking for a grant? Learn more here.
This article is for informational and educational purposes only. It should not be construed as investment or trading advice or a solicitation or recommendation to buy, sell, or hold any digital assets. Transactions on the blockchain are speculative. Carefully consider and accept all risks before taking action.
