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mev-beta/docs/master-plan/06-balancer-integration.md
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Balancer Integration Plan

Overview

This document outlines the implementation plan for Balancer exchange support in the MEV bot. Balancer is an automated portfolio manager, liquidity provider, and price sensor that supports pools with up to 8 tokens at any weighted ratio.

Contract Architecture

Core Contracts

  • Vault: 0xBA12222222228d8Ba445958a75a0704d566BF2C8
  • Weighted Pool Factory: 0x8E9AA87E45e92bad84D5F8DD1bfc9578C171874D
  • Stable Pool Factory: 0xc66Ba2b6595d3613CCe04132849632C544f5C791
  • Liquidity Bootstrapping Pool Factory: 0x7512224C69C447D30793f18fCD4AC25f830c6308
  • MetaStable Pool Factory: 0x67d2691E47E8834e0D0955Fd0f1FA0d14C59b3c1

Pool Types

  • Weighted Pools (constant weight AMM)
  • Stable Pools (for similarly-priced assets)
  • Liquidity Bootstrapping Pools (LBP)
  • MetaStable Pools
  • Composable Stable Pools

Core Functions

Swap Functions

  • batchSwap (single function for all swap types)
  • queryBatchSwap (simulate swaps without execution)
  • Pool-specific swap functions

Liquidity Functions

  • joinPool (add liquidity)
  • exitPool (remove liquidity)
  • queryJoin (simulate adding liquidity)
  • queryExit (simulate removing liquidity)

Vault Functions

  • manageUserBalance (internal token transfers)
  • managePoolBalance (pool-specific operations)
  • getPoolTokens (get pool composition)
  • getPoolId (get pool identifier)

Implementation Steps

  1. Create Balancer struct implementing the Exchange interface
  2. Implement Vault interaction layer
  3. Handle different pool types with appropriate pricing models
  4. Implement batchSwap functionality for multi-hop trades
  5. Add pool discovery and indexing functions
  6. Create weighted pool management functions
  7. Implement stable pool functions for similar assets
  8. Add support for Liquidity Bootstrapping Pools

Pricing Mechanisms

Weighted Pool Pricing

  • Implement constant mean market maker formula
  • Handle pool weights and token balances
  • Calculate spot prices based on weights
  • Account for swap fees which are configurable per pool

Stable Pool Pricing

  • Use StableMath library for stablecoin swaps
  • Handle amplification parameters
  • Consider fee structure for stable pools
  • Implement efficient computation for multi-asset swaps

Balancer-Specific Considerations

  • Account for different fee structures per pool
  • Handle pool specialization (GENERAL, MINIMAL_SWAP_INFO, TWO_TOKEN)
  • Consider oracle-enabled pools for price tracking
  • Handle pool weights that can change over time (Gradual Weight Updates)

Testing Plan

  1. Unit tests for weighted pool swaps
  2. Stable pool functionality testing
  3. Multi-hop trade execution testing
  4. Pool composition verification
  5. Fee calculation accuracy testing
  6. Edge case testing (pool imbalance, extreme weights)
  7. Integration tests with mainnet fork
  8. Gas optimization verification

Performance Considerations

  • Efficient batch operations using Vault
  • Optimize for pools with different token counts
  • Cache pool composition and weights
  • Implement efficient routing for multi-token pools
  • Consider pool liquidity depth for trade execution

Security Considerations

  • Validate pool parameters and token composition
  • Implement proper slippage protection
  • Verify pool permissions and restrictions
  • Handle pool-level rate limits
  • Check for pool-specific security measures

Integration with MEV Bot

  • Identify Balancer-specific arbitrage opportunities
  • Monitor weighted pools for profitable swaps
  • Track LBP opportunities during new token launches
  • Include stable pools in stablecoin strategies
  • Coordinate with other exchanges for cross-exchange arbitrage
  • Consider Balancer's voting escrow (veBAL) incentives