Stop ACX Emissions on wstETH/ACX LP Balancer Pool

Proposals
1

Title: Stop ACX Emissions on wstETH/ACX LP Balancer Pool
Authors: ACX Emissions Committee (Kevin Chan, David Korpi, Ryan Carman, Dylan O’Reilly, Chase Coleman)
Status: Proposal
Related Discussions: ACX Emissions Committee, ACX Emissions Committee Framework Update, Reduce ACX emissions for ACX LPs, WBTC LPs and wstETH/ACX LPs

Summary:
The Across DAO should stop ACX emissions for Balancer wstETH/ACX LPs following improved liquidity of ACX on CEXes and DEXes. The aim is to optimize DAO capital efficiency by aligning rewards with actual usage and market conditions. The current emissions are disproportionately high relative to the volume this pool supports. Better liquidity solutions are already in place.
The ACX Emissions Committee only has permissions and a framework to control ACX emissions for ETH, USDC, USDT, and DAI. We are putting together this one-off proposal to cease Balancer wstETH/ACX LP ACX emissions.

Motivation:
The wstETH/ACX LP staking pool current base emissions per second are 5,250 ACX/day. Taking into account the multiplier this means the pool currently receives approximately 11,350 ACX (~$2,600) per day in emissions while averaging just $100,000 in daily trading volume. This translates to a high cost per unit of onchain liquidity that is no longer justified. This proposal recommends reducing the emissions to 0 ACX per day.

There are three key reasons to support this proposal:

  1. Poor Capital Efficiency
  • The wstETH/ACX Balancer pool averages $100,000 in daily trading volume.
  • This comes at a cost of $2,600 per day (at $0.23 ACX price), resulting in disproportionately high incentives for relatively low return in terms of liquidity.
  1. Robust Off-Chain Liquidity
  • Since the Binance listing and other major CEX listings in late 2024, ACX now averages over $10 million in daily trading volumes across centralized exchanges.
  • This significantly reduces our reliance on onchain liquidity for ACX.
  1. Better Onchain Alternatives Already Exist
  • The DAO currently supports a Uniswap v3 vault through Arrakis, which provides onchain liquidity without direct emissions.
  • These vaults are funded via trading fees and represent a much more sustainable model for long-term liquidity provision.

Specification & Implementation:

  • Current emissions: 11,350 ACX per day (5,250 ACX base emissions per day)
  • Proposed emissions: 0 ACX per day (0 ACX base emissions per day)
  • This change will take effect at the beginning of the next epoch following proposal approval.
  • No changes to the underlying pool structure or staking mechanism are proposed.

Rationale:

  • Cuts daily emissions cost by ~$2,600, saving the DAO valuable ACX.
  • Encourages a shift toward sustainable, fee-based onchain liquidity strategies like the Arrakis Uni v3 vault.
  • Signals to the community and stakeholders that the DAO is taking a disciplined, data-driven approach to emissions and capital deployment.

Downside (Cons):

  • Likely a reduction in TVL or liquidity depth in the wstETH/ACX Balancer pool.
  • May discourage some LPs from continuing to provide liquidity if they are highly incentive driven.

Voting:

Should the Across DAO end ACX base emissions for Balancer wstETH/ACX LPs? A “YES” vote means that you would like to decrease the ACX base emissions per day being paid to Balancer wstETH/ACX LPs from 5,250 ACX/day to 0 ACX/day. A “NO” vote means that you would like the ACX base emissions per day being paid to Balancer wstETH/ACX LPs to stay the same.
  • Yes
  • No
  • Abstain
0 voters
2

Across volume is probably strong enough now that we shouldnt need to incentivize an LP. I use Uniswap over Balancer personally.

1 Like
3

Thanks for the feedback. The stronger cex liquidity seems to have helped Uniswap. Also, we can consider a bigger commitment to Uniswap vaults like Arrakis.