Summary

The BD Service Provider (BDSP) is seeking approval to raise the percentage of vlAURA allocated for strategic initiatives from 20% [BIP-508] to 100%.

Balancer DAO currently has 1.7m vlAura as a result of BIP-551.

This represents about 5.77% of vlAura voting weight and represents 2-3% of total veBAL votes.

Motivation

The BDSP was established in January 2024 under BIP-525. Since then, significant effort has taken place to onboard new partners, bootstrap new pools, and explore new growth opportunities for Balancer. See the BD SP January Update here for an update as of mid February.

With the pipeline continuing to grow and the market heating up, it’s clear the 20% of vlAURA eligible for BD use is getting spread too thin to be impactful for these new partners and pool types. Further, unforeseen use cases for vlAURA, such as the recent rETH migration, eats into the BD allocation hampering the dry powder Balancer can use for partners.

Considering the present market conditions, the influx of new partnerships, interest from additional chains seeking Balancer deployments, demand from existing partners to launch on new chains with Balancer, and the upcoming launch of v3, we are of the opinion that allocating the entire vlAURA amount for growth initiatives can enhance Balancer's potential for expansion and seize new opportunities.

The distribution of the vlAURA will be at the BDSP’s discretion. However, we recommend any vlAURA not used for BD initiatives in a cycle would revert back to the Core Pool and Revenue Producing Pools distribution outlined in BIP-508.