This proposal originally appeared on Balancer's forum and is faithfully reproduced here along with all proposed amendments.

The Proposal

For the remaining two weeks of the exchange gas reimbursement pilot, expand the list of eligible tokens to include all whitelisted tokens (the same list that is eligible for BAL liquidity mining). The change would take effect starting at 00:00 UTC on Monday, February 8, and we would continue to allocate up to 7,500 BAL each week to the reimbursement of gas costs for swaps performed through the Balancer Exchange Proxy.

Motivation

The pilot program has gone very smoothly so far, with 929 BAL being distributed to 441 addresses for the first week. Of these addresses, only 171 were LPs also participating in liquidity mining, meaning the other 270 were traders who gained the opportunity to participate alongside LPs in the ongoing distribution of BAL tokens. The second week of the pilot is not yet finished, but so far 1043 BAL are set to be distributed to 433 addresses, 342 of which are not participating in liquidity mining. Only 86 reimbursed addresses are included in both weeks so far, meaning a total of 788 unique addresses have been or will be reimbursed.

For all of us in the Balancer community, the decentralized distribution of governance power has always been a top priority. The liquidity mining program features an extensive list of over 400 eligible tokens and has been a key contributor to this decentralization, distributing BAL tokens to over 9,000 liquidity providers last week. In contrast, the gas reimbursement pilot so far has only included 5 eligible tokens in order to assess feasibility and reduce gameability at the outset.

But now that the basic, five-token version of the pilot has been validated, it is time to expand it to achieve the same degree of decentralization as the liquidity mining program. To ensure lasting robustness of the governance process, we need to get BAL tokens into the hands of as many Balancer users as possible; and that includes both liquidity providers and traders.

Mechanics

The overarching mechanics of the gas reimbursement pilot would not change. Please see the original proposal for details.

In lieu of the shortlist of eligible tokens included in the original proposal, we would use the existing whitelist used for liquidity mining. Swaps between any two of the tokens on the whitelist would be eligible for reimbursement of gas costs, with limits described in the original post and summarized here:

• Only transactions between an EOA account and the Balancer Exchange Proxy would be eligible. This roughly correlates to end users navigating the Balancer Exchange UI and would not include DEX aggregators or most arbitrage bots.
• The maximum amount of gas to be reimbursed would be 100,000 units per swap, where there can be more than one swap in a single transaction (a swap is one leg of a multi-hop trade).
• The maximum gas price (in gwei) used would be the median price of all transactions within the enclosing block.
• Reimbursements would be made in BAL, not ETH, with the median BAL/ETH price from CoinGecko for the weekly period being used to convert.
• If the number of tokens to be distributed in a single week exceeds the 7,500 BAL budget, all reimbursements would be scaled down proportionally so that exactly 7,500 BAL are issued in total.
• Claims would be made available via the same MerkleRedeem contract currently used in the liquidity mining program. Reimbursements and liquidity mining proceeds for the week would be summed and be claimable in a single transaction.

Amendment 1

If we detect any gaming of the reimbursement program, such as blatant wash trading, we would reserve the right to filter those addresses out of the distribution. We want this to be an opportunity for traders to safely utilize the Balancer Exchange without fear of having their reimbursements diluted by an attacker.