[BIP-159] Activate BAL Emissions for Mainnet EURS:USDC “FX Pool” w/2% emissions cap

Summary: Xave Finance (pronounced “Save Finance”) aims to enable financial services companies (such as “fintechs'' and neobanks) to leverage DeFi for actual use cases, such as real time remittance transfers and high yield consumer savings. Xave does this by building an FX accurate AMM via a custom “FXPool '' now and eventually a stablecoin lending market that shares liquidity with the Balancer V2 Vault via a BoostedFXPool.

References/Useful links: Pasting links in reply due to new user limit

Protocol Description: Xave has deployed its first custom pool type - the FXPool - that brings FX markets and lending to the Balancer DAO.

Motivation: “Bringing FX markets to the Balancer ecosystem”

Stasis, the licensed issuer of fiat backed stablecoins EURS, and its community will be supporting this pool to enable liquid FX trades and eventually work towards instant, on chain cross border remittance between Europe and Asia (EUR-SGD, EUR-PHP, EUR-IDR). Leading blockchain providers have tried to achieve this “on demand liquidity” but stablecoin FX is the true 10x improvement to traditional financial rails. This is especially true as stablecoin rails are able to offer end to end remittances at <1 % per transaction (if anyone is interested, we have a real world cost breakdown). This real world use case will bring sustainable fee generation via real economic activity to the BalancerDAO. Xave would like to work with the BalancerDAO to incentivize this initial pool with BAL rewards towards a real world use case in DeFi.

Specifications:

1. Governance: Governance will be done via snapshot for now. Later on Xave’s own VE governance structure will be deployed (forked from veBAL). Current admin of the EURS:USDC FXPool is the team’s ops 3/3 multisig 0xA4d521ae4302ffcf3cD5b257B45B16DAC726A057 (Ethereum Mainnet), until the community is ready to take on ownership of the Xave protocol. The FXPools have various parameters (read more https://docs.xave.co/product-overview-1/amm) that affect the range of FX accurate swaps across the bonding curve. These parameters are updated and optimized over time, thus the need for nimble response while the pool is new.

2. Oracles: The EURS:USDC FXPool utilizes a Chainlink oracle to allow FX accurate swaps for a predetermined range of the bonding curve. Beyond this range (called the “beta region”), LP ratio then dictates the price of trades. At this point, arbitrageurs are incentivized by significantly cheaper fees to trade the pool back to the “beta region” where FX price is followed. LPs are also incentivized to keep liquidity in the pool especially while it is outside the “beta region”, due to existing parameters that yield much higher fees charged to traders swapping the pool away from the “beta region”. See linked docs to learn more

3. Audits: v2 Final Audit - Xave Finance

4. Centralization vectors: 3/3 operations multisig that owns contracts until contracts are “battle tested” and community is ready to takeover. The owner of the pool will be changed to the Balancer recommended address 0xbalbalbalbalbalbalbalbalbalbalbalbalbalb once the pool has been running for sometime without issue to allow for quick response time in the event of an emergency. Until then the Xave operations multisig will be assigned as the pool’s owner.

5. Market History: EURS is an asset backed stablecoin, fully collateralized and issued by Stasis - the licensed issuer of fiat backed stablecoin EURS. USDC is an asset backed stablecoin issued by Circle

Pasting links of gauge and pool in reply due to new user limit

6. Value: FXPools deployed on Xave are highly capital efficient allowing for the pool to support larger trade volumes despite the minimal liquidity.

Gauge with 2% emissions cap: 0xE629c43BCad1029E12ED51432B9dd3432b656cc9 Pool: 0xAd0e5e0778cAC28f1ff459602b31351871B5754a