Boosted Pools
Overview
Boosted Pools are a type of liquidity pool in which some or all of the tokens can generate yield. The yield-bearing tokens can constitute anywhere from 25% to 100% of the pool's total tokens. While the operation of Boosted Pools is not restricted to a specific trading algorithm, they often employ Stable Math. This is due to the effectiveness of Stable Math in handling assets that are highly correlated.
Advantages of Boosted pools
The main advantage of boosted pools in the Balancer ecosystem are:
100% yield bearing possibility
Balancer v3 boosted pools allow for 100% of an LP position to be considered boosted, meaning held in a yield-bearing token. Prominent examples include bb-a-USD, which is a StablePool containing Aave yield-bearing DAI (aDAI
), Aave yield-bearing USDC (aUSDC
) and Aave yield-bearing USDT (aUSDT
). The Balancer BatchRouter can handle user requests to trade among all these assets in a seamless and gas efficient manner (e.g., depositing and withdrawing underlying tokens DAI, USDC and USDT). The front end or aggregator can construct a batch swap with everything the router needs to perform the operations, including interacting with liquidity buffers (see below), and only wrapping or unwrapping when absolutely necessary.
Gas efficient swaps between boosted pool's base assets
Boosted pools leverage the Vault's liquidity buffers concept to facilitate gas-efficient swaps between boosted pools. This allows LPs to maintain 100% boosted pool positions and still earn swap fees from base-asset to base-asset trades.
Boosted pools are "plug and play" for ERC4626 Vaults
Any token that complies with the ERC4626 standard can easily become an asset within a boosted pool and can be swapped on Balancer gas efficiently while keeping swap prices competitive due to liquidity buffers.
Great way for a DAO to facilitate liquidity for their token product
Boosted pools are an excellent method for introducing LSTs and yield-bearing tokens to the market. As a DAO, you can fund liquidity buffers with yield-bearing assets and base assets, allowing your users to benefit from the advantages of 100% boosted pools. This also provides the same "entry" price for your LST or yield-bearing token that a user would get when entering natively.
Examples
Info
Once v3 launches this will be updated.