Managed Pools

Overview

Managed Pools are designed to bring extreme flexibility to Balancer, unlocking possibilities for sophisticated portfolio strategies and fine-grained control.

Managed Pools use Weighted Math and allow users to have pools of up to 50 tokens. These pools provide a framework for fund managers, can be used to track a wider crypto sector, and feature time-based weight shifting mechanisms similar to those of Liquidity Bootstrapping Pools.

Advantages

Feature Rich

Managed Pools are feature rich. Some of the features include:

• Pool Owner(s)
• Management Fees (optional)
• Liquidity Provider Allowlists
• Up to 50 tokens
• Active Token Management
  • Add
  • Remove
  • Change token weights
• Circuit Breakers to protect from malicious/compromised tokens

Swap Fees

Swap fees are collected during token swaps (as well as some joins and exits: specifically when the transactions are not proportional with the rest of the pool). Swap fees accrue to the pool, and therefore increase the amount of underlying tokens in the pool. This in turn translates to collected fees going to Liquidity Providers by means of increasing the value of their LP tokens (BPT). Unlike most other Balancer pools, Managed Pools do not split swap fees with the protocol.

owners can adjust swap fee percentages in order to influencing the economic activity and incentives around a Managed Pool. For example, when re-enabling swaps in a previously paused pool, running a swap fee update from a very high swap fee to a low swap fee can help mitigate arbitrage losses.

Limits

ManagedPoolSettings.sol (opens in a new tab) defines _MAX_SWAP_FEE_PERCENTAGE = 95e16 or 95% and _MIN_SWAP_FEE_PERCENTAGE = 1e12 or 0.0001%. Swap fee limits exist to safeguard from potential math errors and to incentivize Liquidity Providers to join pools. owners can set custom swap fee percentages in their own implementations as long as they are in the bounds of _MAX_SWAP_FEE_PERCENTAGE and _MIN_SWAP_FEE_PERCENTAGE.

Gradual Updates

Gradually updating swap fees over a set period of time is the recommended method for adjusting swap fee percentages, especially if the owner is lowering fees. An example concept is to implement a linear shift in swap fees, starting from the upper value swap fee set by the owner and gradually reducing it to a nominal or near 0% fee. This approach promotes healthy interactions with the pool and enables arbitragers to adjust the pool's balances gradually over time mitigating arbitrage losses.

Instantaneous Updates

Instantaneous updates occur when swap fees are updated immediately instead of on a slow, gradual basis. Lowering fees instantaneously is generally not recommended as it can lead to instantaneous arbitrage opportunities, giving arbitragers an opportunity to extract value. Instantaneous swap fee increases are generally considered safe.

Examples:

ManagedPoolSetting.sol (opens in a new tab) provides the necessary logic for viewing and updating swap fees within a Managed Pool. Below are a few basic examples of how an owner can interact with swap fees on a Managed Pool.

// Set custom swap fees (Must be >= 1e12 and <>= 95e16)
uint256 private constant _INITIAL_SWAP_FEE_PERCENTAGE = 92e16
uint256 private constant _FINAL_SWAP_FEE_PERCENTAGE = 2e12

// Update swap fees from max fee to min fee
_managedPool.updateSwapFeeGradually(
  block.timestamp,
  block.timestamp + _REBALANCE_DURATION,
  _INITIAL_SWAP_FEE_PERCENTAGE,
  _FINAL_SWAP_FEE_PERCENTAGE
);

// Get the current value of the swap fee percentage
uint256 swapFeePercentage = _managedPool.getSwapFeePercentage();

Management and Protocol Fees

Assets Under Management (AUM) fees are paid out to the owner for maintaining the pool. In Managed Pools, protocol fees are only taken as a percentage of AUM fees, as opposed to the standard method of being extracted from swap fees. The maximum allowable AUM fee that an owner can set is 95% (represented as 95e16). The protocol fee percentage is established by ProtocolFeePercentagesProvider (opens in a new tab).

Examples

ManagedPoolSetting.sol (opens in a new tab) provides the necessary logic for collecting and setting management fees. Below are examples of how an owner can set and view AUM fees in a Managed Pool.

// Set AUM fee to 2%
uint256 desiredAumFeePercentage = 2e16;
_managedPool.setManagementAumFeePercentage(managementFeePercentage);
 
// Get the current AUM fee, as well as the last time fee collections occured
(uint256 aumFeePercentage, uint256 lastCollectionTimestamp) = _managedPool.getManagementAumFeeParams();