#OpenScience for DeFi: Establishing Token Engineering Infrastructure and Best Practices in the Balancer Ecosystem
In a three-month research program, Balancer, Ocean Protocol, and PowerPool collaborated with TE Academy to investigate different aspects of Balancer protocol’s Token Engineering. The program successfully introduced twelve teams of aspiring token engineers to a new protocol and encouraged broader cryptoeconomic R&D.
Token engineering was applied to a wide range of research topics in the context of Balancer protocol including defining new use cases for Balancer pools, verifying pool optimization strategies, building new modeling infrastructure, and more.
In the spirit of #OpenScience, we now have a new library of content that is publicly available to help educate new Balancer community members, and even inspire further research topics across the DeFi industry. Open-source models and simulations will be increasingly important for growing an ecosystem of successful applications on core protocols like Balancer, and the research participants have done incredible work contributing to this important resource!
Read on for highlights and links to dive deeper on each research topic explored in the program.
Balancer Simulations Results
Modeling and Simulations/
Balancer V2 Dynamic Parameter Adjusting Pools
Utilizing dynamic weights changing with the goal of minimizing impermanent loss through implementing a open-loop, closed loop system(s) in a Balancer pool.
Presentation (00:01:30–00:16:15) | Documentation | Github
Modeling and Simulations/
PowerPool: Fund of Funds Strategy
Research comparing different YLA Fund-of-Funds strategies by TVL and Share Price, considering vaults as automated fund management strategies. The Yearn Lazy Ape (YLA) Pool acts as Fund-of-Funds structured investment product holding Yearn Vaults LP Tokens.
Presentation (00:16:15–00:30:00) | Documentation
Modeling and Simulations/
Parameters of LBPs — Sensitivity Analysis
Sensitivity analysis using the BalancerV2cad model to explore parameter settings for liquidity bootstrapping. A Streamlit application displays the results and helps newcomers to easily get started with Balancer liquidity bootstrapping.
Presentation (00:30:00–00:42:30) | Documentation | Application
Infrastructure/
Balancer V2 JS SDK
Easy-to-use SDK for simulating the exact on-chain behaviour of various Balancer v2 pools in JavaScript.
Presentation (00:42:30–00:50:45) | Github
Cryptoeconomics Design/
Reimagine AMM Carbon Finance
A carbon credit permits credit holding entities to emit a certain amount of carbon dioxide, though could be scaled to other greenhouse gas (GHG). Carbon Air Tokens (CAT) are representations of a right to emit that carbon. Carbon credits act as the “currency” of carbon markets, though the market is disjointed globally. This research explores how an AMM can support convergence of carbon credits globally.
Presentation (00:50:45–01:02:30) | Documentation
Cryptoeconomics Design/
Liquidity for Alternative Risk Transfer Instruments: ILS use case for AMM
An Insurance Linked Security (ILS) is an alternative risk transfer instrument. Its purpose is for investors to be able to take on risks in a way that does not require them to be a regulated insurance / reinsurance company. The research explores mechanisms for providing a secondary market (AMM) for tokens which serve as virtual representatives of an ILS.
Presentation (01:02:30–01:15:00) | Documentation | Slides
Basic Research/
Zero-intelligence Analysis of AMMs: The Case of Uniswap and Balancer
Zero-intelligence framework to analyse price formation in a cryptocurrency decentralised exchange (DEX) combining agent-based modeling and real trading history.
Presentation (01:15:00–01:28:00) | Documentation
Infrastructure/
Balancer V2 Python Model
Open-source implementation of BalancerV2 in Python.
Presentation (01:28:00–01:36:15) | Documentation | Github
Modeling & Simulations/
TokenSPICE: Modeling Ocean Markets
Simulating tokenized ecosystems via an agent-based approach, with EVM in-the-loop.
Presentation (01:36:15–01:48:00) | Github
Modeling & Simulations/
oceanSPICE — TokenSpice Simulation for Ocean Market Ecosystem
Web solution to simulate the creation and economy of data assets with dynamic pricing on Ocean Protocol marketplaces via TokenSpice in the backend.
Presentation (01:48:00–01:58:30) | Documentation | Github
Modeling & Simulations/
Foundation Behavior Definition through Intelligent Agents (Reinforcement Learning)
Exploring software architecture designs for integrating intelligent agents in cadCAD simulations.
Presentation (01:58:30–02:14:15) | Github
Infrastructure/
Balancer AMM Explorations
Community repository with exercises to train intuition of the core algorithm of Balancer Pools, the Value Function.
Presentation (02:14:15–02:28:10) | Github
Exceptional Contributions
Additionally, five participants have been awarded by their fellow researchers for exceptional contributions. This award highlights special achievements in the following dimensions:
MULTIDISCIPLINARY: exceptional contributors enable others to look through the lens of a particular domain, while acknowledging and actively removing barriers for collaboration across disciplines (like different domain jargon and definitions, different mental models)
OPEN: exceptional contributors are open to collaborate, encourage and support others in building on their work
INNOVATIVE: exceptional contributors are most innovative in applying their specific domain knowledge to a token engineering challenge
Congratulations to @mark richardson | bancor @Vasily Sumanov | PowerPool @🐙 octopus @24nico and @trang_nv !
What’s next
TokenSPICE Weekly Hacks
We offer weekly hacking sessions open to everyone interested in TokenSPICE, the simulation framework for Ocean Markets with EVM in the loop.
All sessions and links can be found here
OMNIPool Engineering and Simulations
TE Academy is offering a new research group program in collaboration with HydraDX and BlockScience. HydraDX is a cross-chain liquidity protocol managing all assets in one shared liquidity pool.
This research group aims to onboard aspiring token engineers to a rigorous token engineering process. Together, we’ll create new insights, develop simulation infrastructure, and validate design choices — accessible and re-usable for the entire DeFi ecosystem.
The sessions are open to anyone interested, you can find the session calendar here
