As you know, Bao is planning to migrate to xDAI in order to reduce the fees on our farming.
So far I’m pleased to announce that all tests of the core contracts used for Bao have worked flawlessly in an xDAI environment and require no additional changes. So we are very confident in our March 1st release date.
What is the migration?
Migration may not be the best word choice. It is more like Bao is opening up a franchise on xDAI.
There will be a version of the Bao Farm contract on both xDAI and the Ethereum main net.
The rewards on the mainnet contract will be reduced (to 1/4th their current levels which is 250 base Bao per block) and the xDAI farm will be set at 750 base Bao per block.
As users begin to plan for this migration it is now time for us to outline some specifics:
#1 - General Timelines Details:
The official migration date is March 1st.
This is essentially “moving day” its the day you should expect to migrate your assets optionally across the chains.
Since there was some ambiguity to this, I will clarify that March 1st is the LAST day to harvest on the mainnet contract without penalty.
The actual transaction to lower the reward rate on the Ethereum mainnet will take place sometime after 11:59 PM PST, meaning that the transaction will actually execute on March 2nd to change the rewards. The exact time will depend on network gas that day.
Bao Farms on xDAI will have their pools open for deposit as of March 1st, but the farming will not begin until a few minutes after the Ethereum mainnet pools have been reduced. This will prevent their being an overlap of extra Bao printed during that time.
Currently the mainnet pools are set to have their rewards reduced from 250 → 0 in June. But I will be introducing another governance vote for consideration to suggest we do not make that change. You’ll see why in a later section.
#2 - How the Migration Works:
In order to migrate users will unstake their LP tokens from the Bao Farm.
xDAI is a sidechain of Ethereum. This means if you have an Ethereum address, then that same address is owned by you on xDAI (using your same private key) and you can connect to the network the same way you would connect to a test network.
If your LP tokens are Sushiswap LP tokens that are supported by the new xDAI Bao Farms, you’ll be able to immediately take your LP tokens to the xDAI “Omnibridge” (https://omni.xdaichain.com/) and add the address of your LP token and transfer it to your xDAI wallet. (Don’t worry our community team will be making detailed picture tutorials to guide you before the big day!)
If your LP tokens are Uniswap LP tokens, you can either keep them on the mainnet, or withdraw the underlying assets and move them across the bridge using either Sushiswap or one of the other supported LP pools on xDAI that are outlined later in this announcement.
We are currently testing the remaining LP tokens, but so far it seems that nearly all LP tokens have no minimum transfer requirement when transferring them over the Omnibridge. If any of them do fail because the LP tokens have such small units, then you will be able to unstake the original assets and move them over to LP tools on the xDAI side.
#3 - Changes on xDAI
Since xDAI has a faster blocktime than Ethereum, it is not possible for us to keep the two contracts in sync as the blocktimes will change.
We will aim to keep the time for each halving phase the same at roughly one week (measured in blocktime) but the specific blocks will differ. This will be based from the target time of the contract start and so we will post an updated chart of halving times for xDAI once the contract is deployed.
#4 - Timelock Adjustments
We will not be deploying the timelock on the xDAI sidechain until after the first halving of the xDAI contract. Given the complications we had early on with the timelock contract on the main network we want to make sure we can quickly respond to any issues that may happen on the xDAI side.
If you are in any way not comfortable with that then do not deposit your assets in the xDAI Bao Farm until after the timelock is implemented.
#5 - BaoSwap
Before we announce the pools that will be on the xDAI chain, it is time for one of our two surprise announcements.
As you know our community has a partnership with Sushi to use their mainnet LP tokens for our final synth products, and for this we decided we would not deploy our own swapping protocol on the mainnet.
However we feel comfortable doing this deploy on other networks where it is not competitive with Sushiswap, and given the lack of incentivized farms on xDAI and our need to create swapping tools we felt it was worthwhile to deploy our own.
So Bao will create a Uniswap fork on xDAI called “BaoSwap”.
BaoSwap will use the same smart contract source code as Uniswap and the core contract and router are already deployed on xDAI. We are currently going through final testing of the UI and will be releasing it prior to the migration.
BaoSwap fee collection will feed into a future Bao staking program (much like xSushi) which will require a governance vote to deploy once ready sometime later in the Spring.
#6 - Bao.cx
When users migrate the $BAO token to xDAI over the bridge they receive a “$BAO on xDAI” token an ERC677 that is trustlessly controlled by the bridge contract.
This means that the Bao Farm on xDAI cannot issue its on “$BAO on xDAI” and will instead issue $BAO.cx (Bao coupon xDAI)
Rather than create a brand new contract just for swapping and worrying about security issues and audits, we will set up an incentivized $BAO.cx/$BAO on xDAI pool on BaoSwap that will allow users to swap between the two assets on the xDAI side. If they want to bring their Bao back onto mainnet they will simply bring “$BAO on xDAI” back to the Omnibridge and switch back.
To provide the initial liquidity for this pool, the Bao treasury will allocate 2B Bao from the liquidity pool of the treasury (currently unused) to be migrated across and staked, and will do the same with the xDAI treasury when $BAO.cx farming starts.
#7 - Bao Baskets
As a brief update on the schedule of Bao Baskets. We are still on track to be able to do a spring release of these for our soft synths. As users know this is a fork of Balancer pools.
However Balancer has just announced that their V2 contract will be launching in March.
In order to set the right expectations I’m recommending that we wait to fork our own deploy of the V2 contract rather than deploying the V1.
This change will (at most) add 1-2 weeks to the deploy, but will allow for general pool AMM, built in oracles, community governed protocol fees and most importantly asset lending.
The community can of course choose to vote on and move forward with the deploy of V1 but I do not recommend it.
#8 - Pools
All pools that have at least $250k worth of LP deposits (based on BaoBoard.com) by the end of this week will be available on xDAI in both SushiSwap LPs with Baoswap LP farms incentivizing native pairs.
We will also be adding additional same asset pools (like USDT/USDC, wBTC/tBTC, etc) in order to let users farm with low IL.
#9 - YetiSwap
In our deploy of BaoSwap I realized three things:
- There are a great many chains that have liquidity but are not incentivized farms.
- Sushiswap does not operate on those chains.
- It is very easy for us to modify our infrastructure to run on multiple EVM chains.
With all this in mind, a new idea emerged to replicate Bao’s infrastructure on every EVM chain that is not the Ethereum mainnet.
The only challenge became that you cannot sync tokens between multiple chains that don’t have trustless omnibridges. To solve that we would have to deploy new tokens on each chain.
I wanted to prototype this idea, in looking at Bao Farms, BaoSwap and Bao Synths as essentially a franchise model to be deployed to multiple chains. It turns out it takes no more than a few days to adapt the system to get the ecosystem running on other chains, other chains that have hundreds of millions of dollars in liquidity waiting to be soaked up.
The idea here is that Bao will fork and deploy its infrastructure to other EVM chains where there is new liquidity to be had.
In each of these deploys it would be its own standalone brand and own token.
However, the Bao community would proportionally own the vaults from that token, and in turn have proportional governance over it.
Since these other chains share infrastructure with Bao, they can have a smaller dev fund and do not need an LP fund, meaning most of the fund of any new issuance can be part of the community fund.
To pilot this project I’ve set up “YetiSwap by Bao” on the Avalanche chain, the contracts are already live and working but the UI will be ready to deploy at the same time as BaoSwap. The swap will be ready first, with the farms to come later.
The farms will issue a $YTIS token to reward farmers, similar to $BAO.
But, 15% of $YTIS created will go into a vault owned by the $BAO community meaning that users will vote with $BAO to control that 15% of $YTIS and that 15% of $YTIS fees will come back into the future Bao staking programs.
This will allow $BAO to franchise its infrastructure across other chains and expand its liquidity footprint, only requiring a few days of dev time each time we deploy.
We will begin with YetiSwap as a pilot, but have prototypes ready to deploy for up to 6 other chains if Yetiswap goes smoothly and if other tests are successful.
Bao’s xDAI ecosystem will still be our primary and top priority. But, any time we can capture new liquidity and value for the Bao ecosystem without adding extra overhead and without competing with our partners then we will do what we can to capture that value.
#10 - Hiring
As many of you know we’ve hired one new full time dev, made an agreement with an experienced consultant and hired a full time community manager (Chickn)
Our full time dev will be starting on the Feb 27th. But we are still looking for at least one more senior dev.
The current set up and testing for xDAI and the migration, as well as BaoSwap and YetiSwap has been done by Baoman while we wait for the new dev to onboard. (Amazing what you can achieve once you have a community manager dealing with Discord :P)
Given this hiring we expect to be able to keep all of our current timeline goals for soft synths (spring) and full synths (summer)
If you have questions about the outlined info (which I am sure you do) post them here and I will try to get to them early this week.
A lot of this information is brand new, even to the community managers, so they may not have the full details to answer your questions yet.
I will also be taking most of Sunday off in order to rest after the busy week. So if you have questions about the migration or the new product please be patient and we will get to them as soon as possible.
Remember that everything in this project is run by you, the community, and as a community your thoughts will shape our path forward and bind it by votes.
For example if you as a community do not want to do franchised versions of Bao (which I think would be a bad idea to not do) then you could vote on it. If we want to push back dates, we can vote on that too. So a lot of open questions may be things that are up to you as the community.
I’m sure this isn’t ALL the possible info I could put in this announcement but I think its enough for now to show our progress, exciting new plans and outline some of the biggest questions of our migration.
It is exciting to see where we will go as a community together!
- Launching Uniswap clone all xDAI called BaoSwap.
- Also deploying clones of this to Avalanche to pilot ‘franchising’ Bao on other chains with the ownership and liquidity driving back to Bao.
- xDAI tests for farming and swapping have been successful.
- On track for all other timelines previously mentioned.
- New dev starts later this month. Community manager already started.