Q3-Q4 Update 2022
Two quarters flew by while we were busy building behind the scenes preparing and delivering the migration and veBAO launch! These will all be bite-sized pieces that go over progress, as there is so much to catch up on. We will change from a quarterly to a bi-monthly article in the future.
2023 Annual Roadmap
The Annual Roadmap was released and approved, going through quite a few goals for 2023, unveiling plans for the Bao’s Dim Sum House, a system utilizing our oracle factory Delphi to create data-driven actions.
Linktree
We now have a linktree that goes through the BAO Ecosystem, from its documents to its Dapps and the governance system. It is a one-stop shop to find anything you need to get you going on your steamy journey.
Treasury Management
As we have mentioned in a previous article, due to the volatile nature of the market, the treasury galaxy has changed its management strategy of assets within the treasury. Implementing low-risk liquidity mining to extend the runway has seen great success, maintaining two years of runway without any outside funding.
Medium Article going over the treasury’s management. https://medium.com/baomunity/bao-finance-treasury-update-9c2e1029846d
Galaxy Budget Adjustments & Mergers
When we defined our process to standardize and streamline contributions, we first started small because we had fewer contributors at the time and room for adjustment later. As more Galaxies were made, we saw contributors and Guardians become part of several Galaxies, adding unneeded complexity to the organization. Later, the budgets were adjusted. Recently, Galaxies were merged to create a leaner, more efficient operating structure as many Guardians/Contributors were in several Galaxies and sharing duties.
Our new budgets and Galaxies, as redefined by the Annual Roadmap, are as follows:
bSTBL rebalance
With uncertainty around the governance of Reflexer and the slightly more volatile nature of RAI, we want to add more US dollar-oriented stablecoins to spread risk and bring it more parallel to the US dollar to help it be better collateral for baoUSD. However, sUSD, the token approved to replace RAI, was incompatible with the current minting process for bSTBL. We have been looking for ways to implement this or an alternative safely. Until then, the existing underlying assets for bSTBL are USDC and DAI.
Galaxy Expansions
The Galaxies have all seen an increase in contributors, as well as long-time contributors, becoming Guardians.
New Contributors: Daizze, Coffee & Weed to Product Engineering Galaxy Specialedge to Community Sins, Senno, and Sho to the Community Galaxy (formerly creative content)
Elected Guardians: Jester as Guardian of the Community Galaxy n0x as Guardian of the Product Engineering Galaxy Baowolf becoming the Baomaster of the Maintainer Galaxy
The Migration & veBAO
Bao Finance underwent token migration on November 25 after much preparation throughout 2022. As the migration to a new token isn’t something done lightly, we wanted to fix flaws from our previous tokenomics.
From merging xDai and Ethereum farmers to providing unified governance power through our new veBAO ecosystem and rewarding users who mint synthetics instead of simply giving liquidity in farms.
This saw the launch of our new BAOv2 governance token with a 1000:1 reduction in token supply and the start of people being able to unlock tokens or put their entire locked balances to use in veBAO and entering our 2nd phase of distribution.
In the 1st phase, we had many pools to decentralize rewards and ensure that everyone had an excellentchance to gain voting power in BAO without requiring interaction with BAO products. Now in the 2nd phase, the use of the BAO protocol is the primarily rewarded behavior, from minting soft synths (baskets) or hard synths (baoUSD) and staking liquidity into our gauges. Here is a link to the slideshow.
Part of the reason for the migration was the Bao community recognized that the token model could have been better for incentivizing long-term participation and staking. Hence, it developed the outlines for a new one that properly aligns incentives between liquidity providers and Bao stakers.
BIP-14 had proposed the new framework and adjustments we would incorporate into the DAO, but BIP-21 defined the settings we would utilize:
The new tokenomic model centered around our staking program, veBAO, and our liquidity farms called gauges designed to reward liquidity providers and incentivize them to stake their rewards.
Any entity can apply for a gauge containing Bao synthetics to help build liquidity for any token they like on any platform. As long as a token is returned when you deposit liquidity somewhere, we can create a gauge for it — Dex LPs, lending market deposits, yield aggregators, or anything else!
veBAO holders vote for gauges they want Bao emissions to go to, receive a boost to rewards for providing liquidity, and earn a share of the project's revenue.
Launch of Incentives
Gauge emissions have started and are giving out new BAOv2 rewards. We have seen explosive growth in TVL, gathering 2 million in just a few weeks! We hope to see growth continue as we work together with other protocols. For example, setting up gauges in both protocols and creating pairs between each other's products, treasury swaps to vote for each other's gauges, and integrating our products into their projects which we have started on and have had a lot of success so far.
