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Adding EEFI/ETH Liquidity to Balancer

Why is EEFI/ETH liquidity important?

In order to function properly during positive AMPL rebases, the Elastic Vault requires sufficient EEFI/ETH liquidity, given that EEFI is purchased and burned during positive rebases (using surplus AMPL generated by the positive rebase).

To facilitate less expensive liquidity provision, the Balancer pool is set up to require:

  • 90% of EEFI
  • 10% of ETH

Adding ETH to the liquidity pool is important because this allows for smooth trading between EEFI and ETH, both for the Elastic Vault and the market.

Given this, it is vital that liquidity providers provide both EEFI and ETH when adding liquidity to the pool.

Balancer defaults to single-sided liquidity provision, here's why this is not ideal

In its interface, Balancer defaults to single-sided liquidity provision, where individuals only have to provide EEFI or ETH to add liquidity to the pool. This is not ideal because adding single-sided EEFI liquidity requires selling EEFI for ETH, which reduces the amount of ETH in the pool available for trading.

Given this, liquidity providers should follow the following process to ensure they are adding both EEFI and ETH to the liquidity pool when staking.

Step I: Visit the "Invest" Page

When you click the "Invest" button on the Balancer interface, you will be presented with the screen below.

Balancer Invest Screen

If you have EEFI in your wallet, you will be presented with the option to add liquidity by clicking the "Max" link. Do not click the "Max" link.

Instead, click the "Optimize" link (green rectangle). You will be presented with a screen that looks like the one shown below, which will enable you to deposit EEFI based on the amount of ETH in your wallet.

Step II: Make an Optimized Deposit

When making an optimized deposit, you will see a screen like the one below.

Balancer Invest Screen

Optimized deposits have two benefits:

  • 1: They have no price impact on the pool
  • 2: They do not drain the pool of ETH or EEFI, which makes trading via the Elastic Vault and for others less optimal

After reviewing your deposit, click the "Preview" button, and you'll be presented with a screen that looks like the one shown below.

Note that optimized deposits have 0% price impact.

Balancer Invest Screen

Where to add Optimized EEFI/ETH liquidity

Click the link below to add EEFI/ETH liquidity. Remember: Optimized liquidity deposits are best for the Elastic Vault protocol, traders and others in the community.

Click here to add EEFI/ETH Liquidity to Balancer - Remember to Select the "Optimize" Option