[ARFC] Add BAL Ethereum v3

title: [ARFC] Add BAL Ethereum v3
Author: @Llamaxyz - DeFi_Consultants & @solarcurve (Balancer DAO)
Dated: 2023-01-31


This proposal presents Aave the opportunity to onboard BAL to the Ethereum v3 Liquidity Pool.


BAL is a strategic asset to Aave and any BAL earned from the pool could be used by Aave to bootstrap the adoption of GHO and/or the new aToken being developed by @AaveLabs.

The risk parameters provided within are the same as those provided by Gauntlet within the initial forum post discussing which assets to onboard to v3 Ethereum.

By presenting each asset to be onboarded to v3 Ethereum individually, the community can focus on a specific asset, with individual Snapshots determining how to proceed. Finally, approved assets listings can be grouped for the on-chain AIP vote.


Listing BAL as a priority for Aave v3 reflects the strategic relationship between the two communities. Balancer and Aave completed a 200,000 BAL for AAVE token swap and Aave later purchased an additional 100,000 BAL via a swap contract. With the launch of GHO getting closer and the new aToken from @AaveLabs currently in queue for audit, the potential use cases for veBAL are numerous.

Due to the potential use cases for veBAL in supporting bootstrap the growth of Aave, the BAL token is considered a strategic asset. Therefore, we believe listing BAL on Aave v3 Ethereum is a priority.

Balancer DAO is a large provider of liquidity on Ethereum v2 and also Polygon v3. A proposal by @llamaxyz for Balancer to deposit additional BAL into Polygon v3, up to the current SupplyCap, was recently approved by Balancer DAO.

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For listing BAL, this proposal uses risk parameters suggested by Gauntlet on the original [ARC] Aave v3 Ethereum Deployment: Assets and Configurations post. The interest rate curve parameters have been sourced from @Llamaxyz’s [ARFC] BAL Interest Rate Curve Upgrade post, which has passed through Snapshot.


Ticker: BAL

Contract Address: 0xba100000625a3754423978a60c9317c58a424e3D

Risk Parameter Value
Isolation Mode YES
Enable Borrow YES
Enable Collateral YES
Loan To Value 57%
Liquidation Threshold 62%
Liquidation Bonus 8.3%
Reserve Factor 20%
Liquidation Protocol Fee 10%
Borrow Cap 185k
Supply Cap 700k
Debt Ceiling 2.9m
Variable Base 3%
Variable Slope1 14%
Variable Slope2 150%
Uoptimal 80%
Stable Borrowing Disabled
Stable Slope1 20%
Stable Slope2 150%
Base Stable Rate Offset 3
Stable Rate Excess Offset 5
Optimal Stable To Total Debt Ratio 20

Note: Stable borrowing is disabled, however parameters are provided in case enabled at a later date without amending other parameters specific to stable borrowing. The last 6 rows in the table above are to be confirm Gauntlet.


Copyright and related rights waived via CC0.


Wanted to chime in to offer my support. Since BAL has a lot of good farming opportunities with low IL it’s attractive for heavy farmers to borrow. Balancer DAO has already deposited quite a bit of BAL on Ethereum and Polygon - this acts as a passive buyback effectively, with the DAO gaining BAL as interest is earned. We’d be keen to migrate over to v3 and bring those eager borrowers with us :slight_smile:


Hi @Pauljlei,

Would it be possible for Gauntlet to comment on this proposal given the initial parameters are derived from the aave v3 ethereum deployment assets and configurations publication?

This proposal has been on the forum for greater than the 5 day discussion window and we would like to progress the proposal to Snapshot, unless there are any comments to be incorporated.

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Thank you @Llamaxyz - we are re-evaluating the parameters, in accordance with updated market conditions, and aim to comment on this proposal within the next few days.

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Gauntlet recommends the below:

  • Lowering LT to 62% and LTV to 57% in order for BAL to better align with other assets on v3, with respect to the relationship between their risk profiles and their respective params.
  • Keeping the borrow cap at 185k, but updating the supply cap from 1000k to 700k per our updated supply methodology to reflect current market conditions.
  • Updated debt ceiling 2.9M USD to maintain debt ceiling / supply cap ratio.
  • Changing the LB to 8.3% to align with our original recommendation.
  • Maintain current variable IR curve settings (see notes below).
  • Increase Stable Slope1 to be 20% to be more aligned with the framework set forth in Borrow Interest Rate - Risk.

Variable IR curve analysis:
Previously, we had analysis about the BAL interest rate curves here. Namely, we had advocated for a higher Slope1 given the usage of auraBAL: “The proposed 14% interest rate at the optimal point is lower than the historical Polygon v3 market’s 30 day average borrow rate of 35% and Aura Finance’s staked auraBAL yield of 60%. Given the Aura staking yield, the breakeven utilization would be approximately 87% based on recommended IR parameters. The breakeven utilization represents the threshold at which the borrowing BAL to mint and stake auraBAL becomes unprofitable.” Given the changes in market conditions and declines growth trajectory, our analysis shows that the proposed variable interest rate settings will balance risk and capital efficiency.


Hi @wfu,

We have updated the proposal to include the proposed amendments.

A Snapshot has been created for the community to vote on:


1 Like

thanks for publishing the snapshot

this proposal has ACI support

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Hi Everyone :wave:

Thanks to a very favourable YAE Snapshot vote, @Llamaxyz will begin preparing the AIP for vote.

Thank you to everyone who participated in the vote.

Hi Everyone :wave:

This proposal was submitted as part of a combined v3 asset listing AIP submission for the community to vote on.

In parallel, @Llamaxyz has also submitted a BIP on Balancer’s Governance Forum to migrate BAL from Ethereum v2 to v3 once BAL has been added. Llama is hopeful the migration proposal will go live later this week for voting over the weekend.

This is expected to lead to 150,000 units of BAL to be deposited into Aave v3 Ethereum BAL Reserve. This is effectively 21.4% of the Supply Cap, worth an estimated $1.05M in TVL to Aave.

This is in addition to the current $1.05M already deposited in Polygon v3 via 0xee071f4b516f69a1603da393cde8e76c40e5be85.