BOMB Shell Monday: Balancer V2 Farms, BUSM & More!
BOMB FRIENDS:
What an exciting day its been today! This morning our governance vote passed which allowed us to (in my opinion) fix the farm allocations, as well as introduce some new fancy “MAXI” pools! There is quite a lot to go over, let’s jump right into it!
Balancer V2 Forks. What are they and why do I think they are so great?
For those who may be un-aware, Balancer V2 is a protocol on Ethereum mainnet which has been forked onto a few other chains. Some notable forks are BeethovenX on Fantom, as well as the one I recently discovered on BSC, ACSI.finance. Balancer V2 is an automated market maker, much like the super popular UniSwap V2, but with a few differences and big advantages. You may or may not realize it, but just about every decentralized exchange is based on the core UniSwap V2 smart contracts, typically with their own additional features, liquidity farming, etc, on top.
Without getting into too much detail, let’s go over what sets Balancer V2 apart from your typical UniSwap based AMM, and then the reasons why we chose to implement some new pools on a Balancer V2 based protocol.
In UniSwap V2 based AMMs, all liquidity pools/pairs must contain exactly two assets, no more, no less. Also, both assets must be always of equal value. This is why large trades (relative to pool size) impact the prices the way that they do — trades that are quite sizable in relation to the size of the liquidity pool can drastically move the price, as the resulting two assets must be of equal value on conclusion of the swap. This is a great system, but it does have its downfalls, most of which are addressed with the Balancer V2 implementation of the automated market maker.
Firstly, Balancer V2 can have more than two assets in a liquidity pool. I believe most forks limit this to 8, someone please correct me if I am wrong here. In addition to allowing anywhere from 2 to 8 assets per pool, the assets can also have pre-determined weightings. Meaning you could have numerous assets, and some assets can occupy a larger percentage of the pool than others. This has countless use-cases, but let’s go right into how we are taking advantage of this feature.
As with most features, additions, use cases that have been added to the BOMB Money protocol, we are looking to either solve a problem, create lucrative opportunities, increase ease of use, or often a combination of these things. The Balance V2 fork on BSC, ACSI.finance, has allowed us to do just this with the creation of two new pools, the BOMB MAXI and BSHARE MAXI pools. Our governance vote passed this morning to allow us to apply 20% of total BSHARE rewards to the new BOMB MAXI pool, and 10% of total BSHARE rewards to the BSHARE MAXI pool.
What is a MAXI pool??
Its something I came up with a few days ago. Really. Although I wouldn’t be surprised if another protocol has done something similar in the past and given it the same name. The pools are both heavily weighted towards our own assets, with the pair asset having a much smaller weight. Let me break that down into English- Instead of being forced to have our pools be 50% BOMB and 50% BTCB (50% BSHARE + 50 WBNB for BSHARE pool), we created pools that are 80% BOMB and 20% BTCB (and 80% BSHARE, 20% BNB). The name “BOMB MAXI” and “BSHARE MAXI” comes from the fact that the vast majority of the pool is our own asset and not the pair asset.
Advantages of MAXI pools and Problems Solved
There were two key problems/issues we were able to address head on with these pools, in addition to many other benefits.
1) BOMB Single Stake pool had to end. It was doing nothing for the protocol except for taking rewards away from useful farms. (To me a useful farm is one that provides liquidity to facilitate smoother swaps and price stability). The BOMB MAXI being 80% BOMB allows a nice transition from BOMB Single Stake with creating too much sell pressure on BOMB, allowing those users to get back to farming. Of course, because this is liquidity, it also carries the inherent benefits of increased liquidity such as price stability.
2) When under peg, many community members are not sure what to do with their BSHARES. When farming BSHARE, many don’t like the impermanent loss potential, which is very understandable. Having a BSHARE MAXI pool with 80% BSHARE and only 20% BNB largely eliminates the impermanent loss issues, while still providing a farm to earn rewards on, and all the benefits of increased liquidity.
I could go on about Balancer V2, its smart order router, and all the different things we could do with the flexibility offered there, but I’ll save that for another day. I’m glad our vote passed so the community could experience and benefit from the power of Balancer V2 for our new MAXI pools!
I’d love to hear initial feedback on these pools, please stop by the livestream on Wednesday or twitter space Friday to let me know what you think!
MAXI Pools Next Steps
It has been a very busy day, I still haven’t got the farm total value locked (TVL) and APR stats showing on these, but will have that done sometime tomorrow at the latest. As well, the auto vaults are going to be something new for me with those pools, but I am sure I will have them operational sometime this week.
These pools were only released this morning, less than 12 hours ago, and our BOMB MAXI is already at a quarter million dollars locked! Incredible stuff BOMBSQUAD!
If there is interest in learning more about Balancer V2, please let me know and I can write a separate article strictly focused on it and how we can potentially benefit from it in the future.
BUSM.money (BOMB US MONEY)
We decided an Abracadabra partnership was too important to us to put it in the hands of another protocol. While we are still very much pursuing the Abracadabra Money partnership, and look forward to the day it happens, we are implementing our own similar solution in the meantime.
Just like Magic Internet Money (MIM), we have BUSM. xBOMB can be deposited as collateral, and BUSM can be borrowed, to sell for other assets, or to be used to supply liquidity and earn yield. We just started building liquidity on our BUSM-BUSD pair, and within a few short days are almost at 100,000 in liquidity and sitting at a perfect 1.0 peg last I checked! Way to go BOMBERS!!
I will be producing a series of short videos explaining all aspects of the BUSM protocol. I feel this is necessary for our community to feel comfortable using leverage and knowing how to use it safely and within their own risk tolerance thresholds.
For now, let’s keep building up the liquidity, and watch out for some new information videos from me!
xBOMB Promotion
The xBOMB promotion to regain peg was intended to be short lived. We did hit peg within 24–36 hours of the promotion starting, but then dropped below. My decision to continue to the promotion despite having hit peg has cost the protocol wallet the majority of its BOMB, and I have been tapering down those bonus rewards over the last few weeks. With the addition of the BOMB MAXI farm, and with xBOMB now having an additional use case in being BUSM collateral, I think it is perfectly safe to fully conclude the xBOMB bonus promotion.
Theres More!
There still may be room for another participant or two. If you have access to 1BTC+, we have a very safe short term investment opportunity you will want to hear about. Get in touch before its too late!
BOMBERS- I have a great feeling about what is coming to us this month. I can’t wait to celebrate success with each and every one of you.
WAGMI,
Aaron
