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The Balancer DAO's grant application and subsequent proposals for their AMM project in the DeFi space, aimed at boosting economic activity on the Arbitrum network, have sparked mixed reactions in the community. While some support the initiative for its potential to foster growth and innovation, others express concerns about Balancer's efficiency, the high grant amount, and the method of incentivizing LPs.
The community has been engaged in a series of discussions revolving around a grant application and subsequent proposals submitted by Tritium on behalf of Balancer DAO for their project, Balancer, an Automated Market Maker (AMM) in the DeFi space. The grant request, initially for 1.6M ARB but later reduced to 1.2M ARB, is intended to boost economic activity on the Arbitrum network by building an autonomous mechanism for distributing incentives in the form of ARB to all Balancer liquidity. The proposed incentive program involves a pool of 40,000 ARB weekly to augment incentives on Balancer Arbitrum pools. The discussions also cover Balancer's growth, collaborations, and deployment on multiple networks, including Ethereum, Arbitrum, Polygon, and others. The efficiency of Balancer pools compared to other AMMs and the high grant amount are also discussed.
The community's reaction to the proposals and discussions has been mixed. While some members have expressed support for Balancer's proposals, acknowledging the value of providing liquidity depth for a protocol and the potential benefits of integration on Arbitrum, others have raised concerns about Balancer's efficiency compared to other DEXs, the high grant amount, and the method of incentivizing LPs. Some members have also questioned the distribution of ARB in the RDNT WETH pool and suggested that the fee of the pool on Balancer is too high and should be reduced.
The discussions and proposals are seen as positive as they aim to foster growth and innovation within the Arbitrum ecosystem. They provide liquidity to new Arbitrum protocols, allowing economically intelligent builders to build cost-effective liquidity natively on the Arbitrum network. The proposals also ensure Balancer's competitiveness by adjusting the size of their grant to be in line with other grants offered to DEXes. The partnership with Aura to launch Balancer’s multichain boost system, focusing on Arbitrum first, is also seen as a positive move. The community's active engagement and constructive feedback on the proposal also indicate a healthy discussion environment.
The negative aspects of the discussions include concerns about Balancer's efficiency compared to other DEXs, the high grant amount, and the method of incentivizing LPs. Some members have questioned why a second grant would lead to a different outcome when the first grant failed to produce a beneficial outcome. The lack of analysis on the effects of the strategy was also criticized. There are also concerns about Balancer's lack of commitment to Arbitrum, inefficiency of their pools, and recent security breaches. Some members question the distribution of ARB in the RDNT WETH pool and suggest that the fee of the pool on Balancer is too high and should be reduced.
Posted 2 months ago
Last reply a month ago
Summary updated 24 days ago
Last updated 04/12 00:19