Over a month ago a large whale bought & locked around 1.5M veBAL across a few accounts. This voting power was directed first at an 80% BADGER pool and more recently at an 80% CREAM pool. Thus around 50% of Balancer’s emissions have gone to one of these two pools, plus the whale also collects 50% of veBAL’s share of protocol fees. This dynamic has caused a significant decline in protocol revenue as BADGER & CREAM pools generate virtually no fees.
Enter the “Core Pools” proposal. This would change the distribution of protocol fees from giving them passively to veBAL lockers to using them to bribe for votes on the pools that earned those fees. An added twist is a pool must be at least 50% yield bearing tokens that Balancer earns a protocol fee on to qualify as a “core pool”. This would create a strong financial incentive for people to lock veBAL and vote for “core pools”, especially if there is an entity controlling a lot of voting power who does not vote for them.
This mechanism aligns the interests of the protocol (wants to earn more fees) with the interests of veBAL voters (want to vote for the pool with the biggest bribe). Specifically how this hits home to the Tribe, you all are well positioned to take advantage of the core pool mechanism. You could create a wstETH/FEI core pool or a boosted FEI stable core pool. These pools would generate their own emissions without the Tribe having to spend a dime on incentives. Simply deposit POL and watch the magic happen.
The vote is scheduled to take place on June 30th and will mark a pivotal moment in deciding the future of Balancer. I hope the Tribe can join the rest of the Balancer community in support of this proposal and towards a bright future for everyone.