As we’ve been discussing in the Discord the last few weeks, there are BAL rewards accruing in the three staking rewards pools that accept Balancer LP tokens (xSNXa, xAAVEa, xAAVEb). Balancer’s script assigns the rewards to the address holding the LP tokens, not the true owner of the LP tokens. That means that the xToken-controlled staking rewards contracts are the addresses eligible to claim the BAL.
The fairest solution would be to pass through the BAL rewards proportionally to users based on number of LP tokens and amount of time staked. Unfortunately, this is near impossible on chain and quite complicated off-chain. It would require significant developer hours and would be highly error-prone. We’d have to write a block-by-block script recording number of tokens staked at each block for all participating addresses. Additionally, the BAL rewards for many addresses would be smaller than the gas fees required to register them and claim them, making this approach inefficient on both ends.
I’d like to propose an in-between measure that is both highly capital efficient and also benefits LPs proportionately. It would save us time and allow us to focus on upcoming product releases, while increasing the value of XTK liquidity rewards.
Proposal: Claim BAL rewards on behalf of the pools each week; use BAL to buy XTK on the open market; transfer the XTK into the community treasury to be distributed during future community vesting programs.
In just our first full week of BAL mining, the contracts earned nearly $50k in BAL. While that amount is small in the grand scheme of things, $50k or more in weekly buying pressure could provide a floor for the XTK price, benefiting LPs.
We’re opening up this proposal to community discussion with an eye towards resolving it within the week. We’d begin claiming and buying back XTK weekly starting next week.