IIP-22 Bankless BED Index

hey @Kiba, a bunch more questions for you.

what’s your take on intrinsic productivity with Balancer via Set? Can we put ETH & BTC to use if it’s sitting in Balancer? Another question - can we change the underlying assets, if we wanted to add stETH or another type of productive ETH or BTC into BED? Basically, how much flexibility are we giving up if we launch this on Balancer?

Also, you say the end product is the same. I assume you mean that the BPT token representing the pool is the final product? Are there any current BPT-ETH pairs on Uniswap? Can that BPT token be given a name? How would wallets and other providers approach listing BPT tokens?

  • Yes the BED token is a BPT representing shares in the liquidity pool
  • Idk of BPT/ETH pairs on Uniswap but Sushiswap has all of PieDAO and CVPs tokens which are all BPTs listed on the dex and even on their onsen menu
  • Yes you can name BPT tokens whatever you want when you launch the pool
  • BPT are just ERC20s. We can get BED added to Balancer’s and CoinGecko’s tokenlists which should get viewable on most wallets
  • Intrinsic productivity has 2 options with Balancer: 1. Wait for Balancer v2 which has baked in asset management and should be out by the time BED goes through all governance stages. 2. We change token allocations in the pool from 33% ETH to 20% ETH + 13% stETH. This transition can be smoothed out if we use a smart pool (like LBPs) and it doesn’t require any action from BED holders.
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I think the intention here would be to use Set to maintain optionality for Uni LP tokens for the 3 corresponding pools.

Just wondering, if we use V3 of UniSwap, what impact does that have on LM with our existing staking contracts using ERC20 tokens. I understand UniSwap V3 uses NFTs for LP tokens.

This is premature because Bankless was very clear they don’t see any need for providing liquidity incentives. I think based on the meeting we can assume Bankless will not allocate capital to LM incentives. LM would be purely at the discretion of Index Coop.

I’d be keen to learn what the implications this has on engineering as our existing staking contract input is an ERC20 token and V3 would utilise a NFT token.

Seems like we are going with UniSwap over Balancer, I’m not sure I understand why. @LemonadeAlpha can you outline the benefits of V3 UniSwap relative to Balancer, help me understand the comment below.

Sure, maybe I’m overlooking something technically that presents itself as a challenge for Uni v3 as I’m admittedly underversed on the new design.

The goal of using Set would be to maintain the ability to do 3 Uni LP pool tokens (DPI-ETH, DPI-wBTC, wBTC-ETH) in equal weight (or maintain the ability to do this with IP), so that users or the Coop can earn trading fees while maintaining the same exposure and so that it seeds a baseline of liquidity for DPI/ETH.

I think @Kiba said this would be possible with Balancer? Would it be helpful to get on the call with some folks over at Balancer?

@LemonadeAlpha @dylan - Have we already start writing the BED Smart Contract directing us to UniSwap, or is this still early enough to have a conversation around/with Balancer.

Seems like we have a few things ^^ to consider.

We have not started any smart contract work for BED. The Balancer pool should earn trading fees, but I suppose the amount of volume going through Balancer vs. Uniswap is another consideration there.

The Balancer 3pool is way suboptimal to fortifying the DPI/ETH pool on Uni for strategic reasons, imo. I respect the arguments for using a Balancer pool but it’s not part of the plans for BED as I understand them.

Any reasonable trader goes through an aggregator there’s no reason to focus on uniswap. If it’s about integrations then they’ll use whatever dex they want anyway and that volume will attract LPs anyway.

Why is this valuable? It’s the same effect as balancer pool but higher gas fees to mint/redeem BED and we can’t configure the pool with custom swap fees (lower fees = higher volume than uni for DPI trading), yield bearing tokens (intrinsic productivity with no additional contracts), or BAL liquidity mining rewards.

The only valid argument to use Set is if putting the btc/eth/dpi to work will earn more for our users than they are paying in fees but based on how DPI is going I would not make that bet. Even then you can get the same yield with Balancer pools as I’ve mentioned.

Let’s take a step back from talking through the different technologies. EOD the difference is honestly marginal for the end user who doesn’t know what Set or Balancer or AMMs are.

To me the core issue is this point above, whether or not we are willing to tread Bankless as a methodologist or a “marketing partner” (in quotes because that is an undefined term and not something we have used before).

Technologies aside, framing within the scope of DG1, if you believe Bankless is NOT a methodologist, you should vote NO on DG1. If you believe, that isn’t the case, and they are a methodologist, you should vote YES on DG1.

If we believe Bankless is a methodologist, and especially a long term methodologist, this discussion is irrelevant as you can’t charge a management fee on Balancer and a management fee is important for a methodologist’s economics.

Let’s let this discussion run till Monday where I think we should put a stake down and take it to the DG1 vote.

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Why would we charge a fee for something that can be automated by smart contracts? That’s the entire point of smart contracts is disintermediation and business process efficiency.

We all know they’ve done a lot for DPI and the coop in general, we can partner with them regardless of BED but we’re conflating “what is the best way to run BED” with “what is the best way to partner with Bankless”. Bankless clearly has value outside of BED and BED (plus the entire IC reputation) loses value by tying BED to Bankless.

I’m not sure I understand where the idea they are not a/the methodologist comes into play. I first heard of this construction on Bankless and they produced the proposal after I mentioned to them the idea of formalizing the product with the Coop.

I would like to clarify that I am not the methodologist and not seeking to be. I have simply managed the relationship between Bankless and the Coop and I made up the acronym and meme behind it.

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Don’t think you can automate the inclusion of asset classes with >$25B in market value.

Generally appreciate this line of thinking as its customer first. Though from my perspective, distribution and education are major value adds for the end user. Potentially much more so than better rebalancing. At the end of the day, it’s how our products can deliver the most value to our end users and technology is really only a small piece of it.

You definitely can automate inclusion of new assets >$25B using Balancer Smart Pools and Chainlink oracles that return mcap of a given asset. Liquidity Pool → Smart Pool controller → Asset Class Registry → ChainLink Oracles. Then you just have a function on smart pool that keepers can call if an asset should be added/removed, smart pool reads from the registry if oracles have confirmed it should be included, then smart pool takes care of the rest.

That’s an overly complicated answer lol. As I said before we can change tokens and weights anytime we want since we own the pool. Balancer pool automatically does rebalances via the market so you don’t need anyone to manage that process once you do the very difficult math of figuring out what 1/4 is vs 1/3 and sending a tx to update weights

I’ll circle this back to the high level as I did in the last thread on this topic:

  1. This debate evidences the Coop needs to consider a general framework for partnerships. (@BigSky7)

  2. In this case, the Coop needs to outline what role each party plays, what reward each party receives, how long the partnership will last, and what happens to roles/rewards/product in the event the partnership is terminated (and what would cause a termination).

  3. So, do we partner with media companies (eg, Bankless) in the the form of marketing partners (ie, pay marketing fees for specific marketing assets—an Insertion Order), in the form of co-branded ventures (ie, BED is a Bankless + Index Coop production with some form of split streaming fees, and each party specifies exactly what they will do and for how many months or years), or some other framework?

I think it would be helpful if anyone has notes from the Discord so we can cut down the redundant questions and assumptions.

Understandably, without a high level general framework for “How to Partner with a Media Partner,” there will be heavy tension around roles and rewards every time one of these proposals arises. Frameworks provide a starting point for “How we do business” and then each case can negotiate from that starting point (and we can choose to make an exception because it’s warranted, or we can stick to the framework policy when an exception is unwarranted).

This might seem ahead of where we are as a “startup,” but trust me it is not. The earlier we can build partnership frameworks the sooner we can save time/energy/resources for other things…and there are a lot of things :wink:

I also offer my sincere gratitude to @ryanseanadams @TrustlessState and @LemonadeAlpha for having the patience to let us work out the kinks in this alpha test. Bankless is a premium media company in crypto and we would love to find a way to have a win-win partnership that adequately rewards both parties. I believe we can figure this out.

Thanks everyone!

Tim

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It looks like PieDAO charges fees on their balancer smart pool by creating their own token and inflating the token supply by minting new tokens to themselves instead of using base balancer pool token. I’m still vehemently opposed to charging fees but if we must. I might be reading that wrong, they have no docs on how their fees work on the product site, docs site, or in the smart contract repo

I am starting to agree with @Kiba that for something this simple, we should not charge streaming fees for this.
My thinking is from a competition standpoint, anyone could spin up a balancer pool (paying modest gas fees) and perfectly replicate this.
The coop still benefits because this no-fees index introduces new users to Index Coop and the DPI. I think this is valuable. Imagining myself as a new user I would lose a bit of trust in Index Coop, if upon finding about BED, someone tells me there’s a different token that I can buy, which is EXACTLY the same as BED and does not charge fees.

EDIT:
And as many have said already, I also have a lot of respect for Bankless, and enjoy their shows. This is in no way trying to deny their contribution, but perhaps some other arrangement rather than streaming fees are more appropriate.

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Agree, great product. The fee structure need to be seen as fair, or a copy cat product with a more long term fair structure will be created and people will move there. There will be tons of products like this and better to do it right from the start. How low can a sutainable fee be? <—that would be the place to set the % Buy hey, it’s a competitive, transparent, crypto market economy so fees will be lower over time.