Increasing DAO share of fees for more POL

We voted to add a bunch of the DAO funds into the sICX/bnUSD pool not long ago, and while I don’t have the hard numbers, my impression is that it has increased the fees quite a bit in recent times.

Now none of this is that surprising, we - Balanced earn fees on trade volume, and the deeper our liquidity pools, the more we earn. Unsurprising the top ‘DEFI metric’ is TVL. But seeing in person, live, really hammers it home - TVL or more importantly ‘efficient’ TVL is king.

At the moment, from the fees 60% goes to bBALN holders and the other 40% goes to the DAO.
The thing I want to discuss here is changing that to shift more into the DAO. I am personally in favour of a 30/70 split, 30 to stakers, 70 to the DAO, but we can decide the fine tuning in this thread.


POL is good

Don’t want to bore everyone, this is something discussed everywhere

Value held by the DAO, is directly value for BALN

If we would recall a very popular project awhile back Olympus DAO, people at large were extremely willing to throw a lot of capital into what is essentially liquidity pools. This is something we can have, but for our own liquidity pools, with the benefits of no middle man and a vertical integration.
Baln value will partially be supported by a direct interest in all the POL owned by Balanced. (Except it will be more than that)
This will also come into focus when we talk about trading BALN for POL but to stay on topic we just need to think about it in terms of what we want to do with fees.

Balanced is just getting started

It is a well known investing trend that small entities, with good growth prospects, tend to keep all earned profits to reinvest in the business, to grow even faster, compound, exponential growth, etc. etc.
By taking our profits out, we clip the faster curve of compounding growth before it can really get started.
Now I hope its fair to say, Balanced is still small, and Balanced has lots of growth left. Not only that, that growth is not say - Risking a new expensive factory, or trying out some new unfounded tech. No, that growth is literally holding hard currency. More POL > more earnings, more earnings > more POL.
By taking lots of profits out, we are basically saying we don’t think Balanced can do anything profitable with this money.

ETH and BTC pools

To really hammer home how much POL can help, our ETH/bnUSD and BTC/bnUSD pools are downright tiny. Even at current earnings we can meaningfully expose ourselves to the volatility of ETH and BTC.
Yes we have plans for BALN > POL via karma, but we can do it all, we should do it all. More earnings more growth.


Fees will go down (not really)

This one is pretty obvious, you will get less fee payouts, but not really.
They are just being held in the DAO for you, while earning some, AND making your BALN better.
The one scenario it is objectively worse - is if you are a genious investor, that always makes a lot, and think Balanced can’t grow fast enough. This is true, if this is you, Balanced may not be the investment for you.

bBALN is worse

This is the one aspect with real impact. This makes staking BALN objective worse than before. However, it also makes normal BALN objectively better than before.
As someone with a moderate amount staked for 4 years, this is not a real problem.
All I want is for Balanced to do well.
bBALN still would retain

  • 30% fee payouts
  • voting rights
  • LP weighting votes
  • LP/Loan boosting

To me thats plenty of reason. Will that make people stake less, for sure. Is that bad for Balanced, I don’t think so.


Recent choppy markets and our tiny ETH and BTC pools suggest to me, we are leaving a TON of profit on the table. Lets divert more fees to POL and allow us to collect on that profit.

This post is inspired by the discussion among community on Discord here:

Come join us for meaningful community discussions!


Agree 100% the more money in daofund the more we can spend on developing the DAO.

However it might also be reasonable to discuss how more fees will be invested into POL.
There are right now three ways to invest in POL.

  1. Use funds directly to deposit to dex.
  2. Use funds to purchase on our dex then deposit.
  3. Uitilize karma to buy not only via Baln but also sICX and bnUSD.

1 and 2 might be sufficient when Liquidity in ETH and BTC pools are deeper and we are doing small regular increases.
But to make the goal of increasing fees clearer perhaps we should setup some community standard? Like end of month there should be a POL vote of how much to invest this month or should there be development plans to automate some % and use votes only for larger investements.

Just any plan from how we go to more fees → more POL.

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I am in favor of voting to send more fees to the DAO. I have my BALN locked up for 4-years so I am more concerned about the long-term than about a little bit of fees now.

I don’t know if it would be possible, but my only suggestion would be to have the fee change be temporary. The new fee ratio would last for x-months and be reverted to the original value after that unless a vote is made to change it again or extend it. For example a proposal could read something like:

“In order to increase protocol-owned-liquidity for the Balanced platform, we should boost the amount that the DAO receives from fees from 40% to 70% (with 30% going to bBALN stakers) for the next 6 months. After 6 months, the value will revert to the current ratio of 40% to the DAO and 60% to bBALN stakers unless another vote is passed to change or extend it.”

I think viewing it as a temporary boost vs a potentially permanent change would make the idea palatable to more voters, and we could even go more extreme with it like 80-100% to the DAO. I know that I personally would have no problem voting for 100% to the DAO knowing that it would revert in 6 months (or whatever timeframe), but would be very hesitant to vote for the same if there was no timeframe provided and required another 2/3rd vote to change again.

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Disagree. That is not align with the white paper. We invest in balanced is because od the higher share of profit sharing and it should maintain this to protect the initial investor.

Just a heads up. A vote like this is not possible atm. There are no timed vote actions for governance. But it can still be a agreement and just another vote in 6 months to confirm the revert. But not really possible without 2 votes.


Don’t have much to add, just wanted to drop in and give my support for this proposal. A stronger/more well-capitalized DAO translates into a higher probability of success over the long term. I’m a BALN maximalist so I’d even be down for a 10/90 split, but I acknowledge that could be viewed as extreme. 30/70 sounds like a fine place to test the waters.


I don’t know if it would be possible, but my only suggestion would be to have the fee change be temporary. The new fee ratio would last for x-months and be reverted to the original value after that unless a vote is made to change it again or extend it. For example a proposal could read something like:

This sounds like it would make the smart contract more complex without much benefit. If 30/70 is deemed to be a bad split, it can always be changed back with another vote.


Disagree. That is not align with the white paper. We invest in balanced is because od the higher share of profit sharing and it should maintain this to protect the initial investor.

I just read the white paper again and don’t see anything about “higher share of profit sharing”. :joy:


Good reading through all the thoughts so far, something I think worth also discussing is the actual methodology of executing this. Doing perodic votes could be okay, but some sort of automated or semi automated method of injecting DAO holdings into POL should be discussed.

It would be good to know of the viability of something like that smart contractwise or development time wise or governance wise.

EDIT: This is to build on @Andell 's post around the same points

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I understand where you’re coming from, but this is only true if you believe Balanced has peaked. Meaning you want to protect your share of the current profits, but limit the ability to develop greater profits.

If you believe Balanced has avenues of growth (creating more fees) which can be achieved with more capital (POL), then directing a higher percentage of fees to the DAO is more logical.

More liquidity in pools that can be arbitraged means more fees. We have the infrastructure to earn more fees through our arbitrage clients (with the eth/btc:BnUSD LPs), but we need deep liquidity to make it possible.

We are leaving a huge amount of fees on the table simply because we cannot rent enough liquidity to support the volume needed to attract arbitrage traders to the ETH/BTC pools in any meaningful way.

Our current strategy, renting liquidity with BALN incentives, does not seem like a viable solution. As many are hesitant to supply sICX/ETH/BTC against a stable (bnusd), due to impermanent loss. We have recently seen an increase in fees after adding POL to the sICX:BnUSD pool.

This proposal is about changing the fee distribution to allocate more fees into the DAO. More capital in the DAO means a potential for more POL, which means more fees.


@arch thanks for distilling the conversation on Discord into a formal post, much appreciated and well said. I support this proposal 100%, as-is, to change the allocation from 60/40 to 30/70. Glad to see all the support this is getting as well.

I’ll share some thoughts on a few other items discussed here.

I’m actually going to push-back on this just a bit. While of course the yield is lowered, the intrinsic value of bBALN is actually increased and the NPV or terminal value of the cashflows is also increased. I’d say it’s objectively short-sighted to argue that bBALN value decreases with lower network fee yield. Doing a simple DCF, which accounts for cashflows 10+ years into the future, the expected revenue increase from greater POL will greatly outweigh any decrease in network fee payouts.

Nonetheless, we’re in agreement, so no need to really debate this much haha. Overall, I see where you’re coming from with this section. There could be less incentive to lock right now.

I think monthly votes are a great idea, but would say I don’t like the idea of automating the POL process. At this stage, I want to protect the integrity of our contracts as much as possible. Adding additional complexity, primarily for convenience, isn’t worth it imo. Also, regular votes keeps the community engaged, which is a great thing, and offers us more flexibility.

@CryptoKnight I see where you’re coming from and agree with the strategy, it’s just not necessary (nor currently possible). I’d point to traditional markets. It’s understood by those that hold AMZN or TSLA that, at some point, once these companies have reached an acceptable level of growth, that they will start paying dividends rather than reinvesting entirely in the company. This article was shared on Discord and I think it’s worth a read for more background on this proposal. At the risk of you not actually reading the entire article haha, I’ll still share a screenshot of these two key takeaways.

Again, appreciate everybody chiming in with genuine intellectual contributions to the DAO. I love this project and love this community.


I’ll echo the majority of the discussion here in agreement of increasing fees going to the DAO.

30/70 is great but I would even be in favour of a higher % going to the DAO.

If profit share being reduced to stakers is a worry, then you must keep in mind this is only short term. Long term more profit will go to stakers due to higher fees earned due to this strategy of gaining POL that can be arbitraged. This is coming from a day-1 4 year bBALN staker.

Cryptoknight raises a good point on the duration of this change which should be a part of the proposal discussion. I would imagine 1 year minimum would be a good time-frame for this change but a vote to change this can be raised at any point should factors change.


I agree with everything but the idea of time frames. Its a dao at any given time anyone can make a new proposal to switch it back.


I’ll second that as well. The very nature of our governance is being flexible to changing market conditions, changing revenue models, etc. To ease any worries, of course, this is a temporary decision in order to reinvest in growth.

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I guess I should add that what I am suggesting is only relevant if the vote is unable to pass.

If this proposal goes up and passes as-is, then great (I would vote yes, btw).

However, in a scenario that we can’t get 2/3 on board, it might be a compromise worth thinking about (if it is worth the dev time to make it possible).


Fully agree long term its still beneficial for bBALN stakers, but in the short term it is worse than before


As a large balance Staker I support this.

Three things to keep in mind for success in the years to come.

  1. We need to focus on nailing down a continuous audit cycle with the same company ICON uses.

  2. We need to heavily utilize the 200M interoperability fund from ICON. We are the number one use case of interoperability for ICON. We are positioned for success as ICON continues to develop.

  3. We need to allow interoperability to develop after a strong focus on security, even if it costs more to take extra steps for security. We are here for the long haul.


Great points @BALNSupporter really appreciate you sharing your opinion here!

Great post ser, well thought out. As someone who is here for the long haul, i agree that we should indeed aspire to acquire as much POL as possible as it will help us become more efficient. I also agree that the tradeoff here for bBaln is negligible and whats most important is the long term health of the protocol. Sacrificing this 10% in the short term for long term growth is a trade i’m willing to make. Thanks for the proposal, well done ser.


I think it is a good proposal. It got my support. Having a decent amount of POL is key for Balanced to allow larger trade volumes independently. And as a bBALN holder the 10% profits are not lost on you but put to good use in the platform that you have a share in.

I do find it curious that most (if not all) responders agree here that it is a good proposal but that the vote is not meeting the required 2/3 majority atm.

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I am strongly against. This remind me on ICONbet whitepaper said 80% earnings go to players, then they change to 10% after everyone has pumped it for more than 4 years.
ICONbet is now dead, same fate will be with balanced if we continue this road.

No Reddit post on this? This looks very fishy to take from what Balaced stakers earning now on such quiet and short notice.

Take from the community, give to DAO, then take from DAO to pay Karma Finance or some other sneaky way.

Me personally will stop investing in balanced if this get adopted.

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What reddit? If there’s a Balanced reddit, I don’t use it and never have. This forum is the primary medium of governance discussion and always has been. This was posted 9 days ago and discussed in Discord at length.

The community owns the DAO, the community IS the DAO.

Outside of this individual post, I hope that those who voted No come to this forum to share some tangible and logical reasons for their decision. Those in support have spent time and effort to provide genuine insight into the logic of the proposal and why it brings more value to bBALN. We are all open ears about why the current 60/40 split (or another split) is best for bBALN value so long as the response is grounded in logic.