The 8020 Initiative

We propose creating an 80/20 LP position on Balancer Protocol to utilise as the primarly staking token in the SAFE ecosystem instead of locking single-sided SAFE to increase onchain liquidity for SAFE.

Why 80 / 20?

• Single token staking modules reduce the circulating supply of a token and as a result reduce the onchain available tokens to provide liquidity → higher slippage and more price volatility.
• Using a 80% SAFE + 20% ETH pool as the Staking Token creates deep liquidity, while having limited impremanent risk to users.
• Allows for reduced slippage and lower price volatility.

What tokens to put in the LP? The LP should consists of 80% SAFE + 20% counter asset. There are various options for which counter asset to use

• ETH or staked ETH equivelent: By having ETH, or a staked ETH equivelant such as rETH, stETH or EZETH - the SAFE stakers and token continue to have exposure / relationship with ETH. This leads to increased price volatility relative to the USD.
• USD or staked USD equivelent: By having USD, or a staked USD equivelent such as sDAI, stUSDT, USDE - the SAFE stakers and token have a relationship to the USD, leading to reduced price volatility relative to the USD.

Additional ways to benefit from 80/20

• Leverage onchain incentive program solutions, such as Paladin / Aura / StakeDAO to create more efficient incentive campaigns for SAFE stakers.
• Leverage the relationship with GnosisDAO / Karpatkey, who control significants shares of AURA / BAL tokens to increase the rewards flowing to SAFE pools.