Overview

In December 2024, Balancer launched the latest iteration of its technology stack, Balancer v3, on the Ethereum mainnet. With it came a new custom pool type known as 100% Boosted Pools, which allows liquidity providers to gain exposure to lending market supply interest rates with 100% of their underlying liquidity while continuing to facilitate and earn rewards from swaps.

100% Boosted Pools address what we call the "liquidity trifecta," offering benefits to users, protocols, and the network in a single position:

• Users: Boosted Pools simplify yield generation, allowing users to amplify their rewards by accessing the two leading yield markets—DEXs and lending markets—within a single position.

• DAOs/Protocols: Boosted Pools optimize incentive structures for token liquidity growth, enabling protocols to direct incentives to a single pool while scaling liquidity in both crucial markets.

• Networks: Boosted Pools simultaneously grow two critical liquidity markets—DEXs for permissionless swaps and lending markets for permissionless loans. This means that for every $1 in a Boosted Pool, the network's metrics increase by $2.

  

The value of this pool type is evident, with approximately $82 million seeded in liquidity and $957 million in cumulative swap volume facilitated since launch. Notably, while Balancer and Beets host $82 million in liquidity, the same $82 million is deployed across Aave, Morpho, Silo and Avalon resulting in a total of $164 million in net liquidity across the network.

This proposal seeks to allocate this grant specifically to 100% Boosted Pools on Optimism and Base. Doing so will ensure the most efficient use of incentives by doubling network liquidity, providing users with the simplest solution for generating diversified and sustainable rewards, and fostering capital growth in both essential markets—DEXs and lending markets—simultaneously.

Lending Estimate

While we lack direct backtesting data on TVL generated from Boosted Pools under previous grants, we will follow the same grant structure implemented on Optimism. The key difference is that, with Boosted Pools, the liquidity generated on the network will be doubled, as these pools seed two markets simultaneously.

The grant strategy on Optimism utilized an automated program with intelligent reward distribution, yielding the following results:

• The Optimism grant allocated a total of 100,000 OP tokens, with up to 24,000 OP used as initial bonuses for the first eight pools and the rest as liquidity mining incentives based on veBAL votes multiplied by a Boost system.
• The first incentives were deposited on 4th July 2024, with emissions starting on 12th July 2024 and concluding on 18th October 2024.
• The total LST/LRT liquidity on Balancer’s Optimism deployment grew from ~2,950 ETH at the start of the grant period to ~5,460 ETH by 18th October 2024, an 85% increase.
• Even after the program ended, sustained growth remained, with liquidity at ~3,725 ETH (~26% increase from the start).
• The grant facilitated the creation of five new pools: weETH/wstETH, wrsETH/wETH, wrsETH/wstETH, inETH/wstETH, and instETH/wstETH.
• The grant successfully onboarded new projects, including Ether.fi (weETH) and Kelp DAO (wrsETH), strengthening relationships and expanding the ecosystem.