A short introduction guide to Balancer
- First steps
-- prelim draft --
-- awaiting Quarterly Report - Hyperion Q2 Report -- - Listing on Balancer Finance
-- The IHF token now has a NAV of $0.1765 --
…by implementing the token buy-and-burn protocol. Much like a share repurchase in traditional markets, the Hyperion fund will place buy orders on exchange below, and up to, the prevailing NAV price per token
-- Hyperion Fund (IHF) 2020 Q2 Quarterly Report
https://invictuscapital.com/article/hyperion-q2-2020-report
IHF now trading on Balancer.Finance, the user can swap IHF tokens directly with Ether using WETH or USDC
Balancer Finance - https://balancer.finance
This is a guide to providing liquidity to IHF tokens by utilizing Balancer liquidity pools, using the 1inch.exchange aggregation (on the 'Earn' tab), also enabling users to purchase/redeem IHF via multi-hop smart-order routing pairs with other stablecoins/tokens
To strike a fine balance between slippage and APR, and facilitate arbitraging on the usual exchanges with WETH/USDC pairings with Hyperion Fund (IHF) token, a Liquidity Provider (LP) participates in trading volume (earns liquidity pool token swap-fees) with Balancer Pool-liquidity tokens (BPT). By supplying to a Balancer Pool, LPs also receive weekly BAL Governance tokens.
-- Using Liquidity Pools - https://pools.balancer.exchange
-- Liquidity Pools tracker - https://pools.fyi/#/?platform=balancer
The following are eligible pools for tracking price discovery between market price and the underlying Hyperion Fund (IHF) AUM -- current NAV
IHF Balancer Pool address:
80% IHF -- 20% WETH
IHF Balancer liquidity pool earned swap fees is @ 1.19% (per trade)
Providing USD$ 10,000 worth of IHF liquidity,
For illustration:
- Staking 56,657 IHF tokens (quoted price @ NAV $0.1765)
- Staking $ 2,500 worth of WETH tokens
IHF -- C20 Balancer Pool address:
74% IHF -- 8% USDC -- 18% C20
IHF Balancer liquidity pool earned swap fee is @ 1.19% (per trade)
Providing USD$ 10,000 worth of IHF -- C20 liquidity,
For illustration:
- Staking 56,657 IHF tokens (quoted price @ NAV $0.1765)
- Staking $ 2,430 worth of C20 tokens
- Staking $ 1,080 worth of USDC tokens
BAL token imparts governance/voting rights, which incentivize liquidity providers aiming to achieve yield on IHF holdings, along with future improvements reaping gas savings over time.
There are shared token pools of varying degrees of liquidity, and pool fees. IHF Balancer Pools are whitelisted, and approved for the BAL Governance distribution rewards.
-- About BAL governance tokens:
https://docs.balancer.finance/protocol/bal-balancer-governance-token
-- Discussion on multi-hop pools compared to ETH <> Token 50/50:
https://twitter.com/mikeraymcdonald/status/1250099292200742915
Now accepting seeding of liquidity directly on Balancer.Finance, help us to grow the current targeted capture of $125K across DeFi markets for the IHF Balancer Pool, aiming to achieve ~$20K in daily volume on both legs
Total liquidity, on Liquid Exchange -
BTC pairs | Range $0.06-$0.16 | $ 2K : $ 125K
Total liquidity, on Liquid Exchange -
ETH pairs | Range $0.06-$0.16 | $ 20K : $ 30K
Total liquidity, on IDEX Exchange -
ETH Pairs | Range $0.06-$0.16 | $ 3K : $ 25K
Current market amounts, buy:sell sides- totaling ~$223K
The yield generated on the IHF token Balancer pools derives from swap fees of 119 basis points (per trade), in addition to annual BAL distribution rewards.
To show how pairing IHF tokens within the pool; by using a higher ratio than 50/50 serves as protection against impermanence loss (IL), as seen in the following examples:
Pairs with WETH, ratio factor of 0.80
IHF -- WETH (0.80)
80% : 20%
(Liquidity pool with 2-assets)
Pairs with C20, ratio factor of 0.80
IHF -- C20 (0.80)
74% : 18%
IHF -- USDC (0.90)
74% : 8%
C20 -- USDC (0.69)
18 % : 8%
(Liquidity pool with 3-assets)
- Navigate to https://balancer.exchange
(or use https://1inch.exchange aggregator) - Click Connect Wallet to connect your prefered Ethereum-compatible wallet. Enabling trading across pools with smart-order routing (SOR)
- Search for 'IHF' keyword / use the IHF contract address in the token search field, IHF token on Etherscan.io - https://etherscan.io/token/0xaf1250fa68d7decd34fd75de8742bc03b29bd58e
- Navigate to https://pools.balancer.exchange
or use the 1inch.exchange aggregation (on the 'Earn' tab) - Click Connect Wallet to connect your prefered Ethereum-compatible wallet.
- Using the Filter token(s) button, and search for 'IHF' keyword / use the IHF contract address in the token search field (Shared Pools)
- Click Add Liquidity to add individual tokens into the IHF Balancer Pool.
Using the Add Single Asset feature on Balancer; allows you to assign and swap using the choice of one asset into the entire pool, good for smaller amounts.
Note: If this is the first time your wallet connects with this smart-exchange contract you will need to click Setup Proxy, which will create and use a DSProxy contract to manage your liquidity pools
You will also need to click Unlock for each token, which gives the smart-exchange contract permission to receive your digital assets
1inch Exchange via 1inch.exchange aggregation
Totle Swap exchange via swap.totle.com
Balancer Exchange - https://balancer.exchange
Uniswap Info - https://uniswap.info (IHF token)
Mooniswap Info - https://mooniswap.info (IHF token)
IDEX - https://idex.exchange
OVEX - https://www.ovex.io/products/c20
Balancer pools management
-- https://pools.balancer.exchange
BAL Distribution
-- https://docs.balancer.finance/protocol/bal-liquidity-mining
Weekly BAL distribution reports
-- https://bal-reports.herokuapp.com
Liquidity Pools tracker
-- https://pools.fyi/#/?platform=balancer
Full listing and ability to filter views of selected pools in the header sorted by annual BAL rewards
-- https://pools.vision (IHF token)
Now you can swap directly between IHF and C20 tokens with Pool B - (still gathering feedback) whether there is a need for such a smart pool or shared/private pool
When there is keen interest in Balancer pools with stablecoin pairings, might be up for consideration to have a IHF and/or C20 pool linking to stablecoins.
Before writing this guide, was perusing this article on 80/20 Balancer Pools. So, a fellow DeFi enthusiast later shared a concise reading about Swing trading with High-fee Balancer Pools. I was now hooked.
Update: The levied fees per trade remains the same @ 1.19%. The circulating IHF tokens are rather scarce, so with the upcoming vote on the FeeFactor, pools charging a higher fee would be penalized less, to make it sustainable for liquidity providers without dependance on BAL subsidy.
Fees are accrued and available upon withdrawal from the pool, and BAL rewards are a nice bonus, the main gist is that as a continuously rebalancing pool; which behaves like a swing trading strategy, prices are set automatically using the constant mean market maker mechanism, which keeps overall reserves in relative equilibrium.
https://balancer.finance/whitepaper
With a larger pool of liquidity, more traders yearning for low slippage are led to the proverbial pot of gold. The IHF Balancer Pool smart contract holds those liquidity reserves, and the trades are executed directly against these reserves.
Reserves are pooled between a network of liquidity providers who supply the system with tokens via DSProxy contracts, thereby receiving a proportional share of transaction fees accrued.
Midst of researching on the equity holdings in the closed-end Hyperion Fund holdings and having read the whitepaper, which states that:
Token holders can realize their returns by selling into the purchase order made by the Hyperion Fund. Tokens purchased by the Fund are then destroyed, thereby reducing the supply of tokens.
https://cdn.invictuscapital.com/whitepapers/hyperion.pdf
This inspires confidence in the longer term, given that the tokenized closed-end VC fund is performing well, allowance of token buy-and-burns are occuring every quarter, sought to propel the price of the token closing towards the NAV.
Well, if you are reading this IHF Balancer Pool introduction guide and find that it piques your interests (so do I); you can start by being active in the #hyperion-ihf channel; be part of the community, this is a side-project of mine and I'm not affiliated with Invictus Capital.
Thanks to the Hyperion community, especially prof_k for the wonderful guidance when creating the IHF Balancer Pool, and the DeFi concepts gleaned from the discussion.
Join in the discussion on discord - #hyperion-ihf channel:
https://invictuscapital.com/hyperionFund#aboutHyperion
Thank you for reading!
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