A few thoughts towards algorithmic PCV management

Hey Pavel, I agree, Balancer V2 is very promising to FEI. They will launch stable pools (similar to curve) in the following weeks in V2. It is a good opportunity. The benefits are:

  • Earning yield on a great part of the PCV (more capital efficiency in providing liquidity)
  • Increase the liquidity between FEI and other stables (particularly important to pave this road and enable liquidity and low cost for these trades)
  • Diversifying operational risk of using Uniswap
  • Diversifying PCV with other stable assets (DAI, USDT, USDC)
  • Liquidity mining of BAL tokens

I like the idea of using the yield to buy-back and make model with a smart treasury in Balancer for the future. But maybe in the beginning we could use to bootstrap new bonding curves. As the destination of yield can generate further discussion, I would divide the proposal in two. One related to the creation of the pool and other later of what can we do with the yield generated. Because it also depends on market conditions, collateralization of protocol and risk mgmt.

It would also be good to hear @joey on this discussion.

2 Likes