Following the success that trailed the release of veBAL, Balancer DAO has passed a new proposal to incentivize its veBAL strategy of using the BAL/WETH 80/20 BPT (ve8020).
“BIP-146: Incentivize 8020 BPT Staking” was approved on Monday night following a Snapshot vote. Details from the voting page show that approximately 100% of the 263 voters were in support of the initiative.
Moving forward, the DAO will launch a new program to incentive ve8020 adoption by issuing BAL grants to projects that meet certain TVL and revenue milestones. However, the proposal states that all BAL released through this program must be locked in veBAL and “ideally the project will provide the necessary 20% of ETH so that no BAL is sold.” Successful projects will be eligible for a 25,000 BAL grant.
This program is intended to support all systems which involve the staking/locking of 8020 BPT. ve8020 is one such system and it’s a convenient shorthand to use, but this program is not limited to “ve” systems only.
According to the creator of the proposal, Solarcurve, using BAL/WETH 80/20 BPT as the locking token instead of BAL allowed BAL to have deep on-chain liquidity relative to its circulating market cap. The decision also lowered the emissions on BAL liquidity incentives. Consequently, Solarcurve argues that adopting a similar “ve8020 system across DeFi is a key strategic objective for the ecosystem” since “this kind of locked liquidity is far more sticky than usual TVL earned from liquidity mining.”
Meanwhile, to future-proof the program against possible changes in market conditions, the initiative will use a tiered structure in relation to the price of BAL.