[BIP-339] Enable Stafi rETH/WETH Gauge 10% Cap [Arbitrum]

PR with Payload

Authors: StaFi Contributors

Summary:

StaFi proposes the creation of a Balancer gauge for a rETH-ETH pool on Arbitrum, with a 10% emissions cap. This pool will be enrolled as a core pool as well due to the yield bearing token it contains.

Protocol Description:

StaFi is a liquid staked derivatives protocol launched in Q3 2020, with a focus on bringing liquidity to staked assets on Ethereum and other Proof of Stake chains such as Polygon, Solana, and Polkadot. Since launch, the protocol has accrued over $36,000,000 worth of staked assets across 11 tokens, with 3,439 active validators.

Similar to other LSD protocols, StaFi issues a liquid receipt token (rETH) representing your share of ether staked on the Beacon Chain via a permissionless validator set. Deposits are partially covered by validator deposits. The exchange rate between rETH/ETH will gradually increase as staking rewards accumulate, though rETH is not redeemable for the ether principal and rewards until after the Shanghai upgrade.

StaFi has a native governance token with the ticker “FIS”. FIS is freely tradable on a number of centralized exchanges, alongside some decentralized exchanges not inclusive of Balancer. FIS has governance utility and can be staked by validators in the StaFi consensus network.

Motivation:

StaFi currently has an existing rETH-ETH pool on Balancer on Mainnet which has seen healthy growth.

StaFi is looking to expand the availability and liquidity of its staked derivatives, starting with rETH, through Balancer on Arbitrum. Ahead of and after the Shanghai Ethereum hard fork, liquidity and yield on LSDs will be a key competing factor as LSD protocols seek integrations and a broader base of holders.

StaFi is committed to driving value to the veBAL and vlAURA ecosystem by incentivizing pool liquidity via Hidden Hand voting incentives. Deeper liquidity should lead to increased volume and revenue accrual.

Specifications:

Governance: DAO forum

Oracles: Direct Balance Query: The rETH rateProvider has a getRate() function that calls rETH’s own getExchangeRate() function. See the contract here

Audits: StaFi rToken App Audits

Centralization Vectors:StaFi’s rebalancing is done by a bot that is run by the foundation. Presently the bot is not profitable to run, so we would not expect anyone else to run it. However, there is no chance of money being inaccessible as a result of the bot stopping–Just that the bridge would run less efficiently.

Market History: rETH has been a tradable asset since March 2021. Trading has primarily taken place in the aforementioned rETH-ETH pool on Curve. FIS is a liquid asset traded both on top centralized exchanges as well as decentralized exchanges.

Value: StaFi will make its Balancer rETH-ETH pool a primary source of liquidity for rETH on Arbitrum. By bolstering liquidity of the pool, Balancer should gain from increased trading fees.

Links & References

Website:https://www.stafi.io/

Documentation:https://docs.stafi.io/

Github Page: stafiprotocol · GitHub

Communities: Community | StaFi

Other useful links: https://twitter.com/StaFi_Protocol

Pool: 0x01990f1e6f7F32296f125eE9469705C1C070054D

10% capped gauge: 0x870Cd189889C1117b33bc8c94394a7477d4EB6fa

Transaction Specification: The Balancer Maxi LM Multisig eth:0xc38c5f97B34E175FFd35407fc91a937300E33860 will interact with the GaugeAdderv4 at 0x5DbAd78818D4c8958EfF2d5b95b28385A22113Cd and call the addGauge function with the following arguments: gauge(address): 0x870Cd189889C1117b33bc8c94394a7477d4EB6fa gaugeType(string): Arbitrum