Balancer weighted liquidity pool for WETH - ARB on the Arbitrum Network

Proposal: utilization of a portion of our ETH holdings for potential profit generation through automated asset rebalancing via the Balancer DeFi Liquidity Protocol on Arbitrum One.

Proposed Allocation

• Pool Composition: 30% ARB / 70% wETH (locked weight, allowed for auto rebalance)
• Network: Arbitrum One
• Swap Fees: 1%

Further explanation and personal opinion

- Why automated rebalancing?

Weighted liquidity pools offer a mechanism to capitalize on price fluctuations within long-term holdings. I propose allocating a specific percentage of our ETH to a Balancer pool containing Arbitrum (ARB) and wrapped Ethereum (wETH). This strategy leverages the inherent price correlation between ARB and ETH on Arbitrum One, a Layer 2 scaling solution for Ethereum.

- ARB Price Volatility:

Compared to ETH, ARB exhibits higher volatility. This characteristic presents an opportunity for profit through automated rebalancing. By the time this proposal ends a high amount of ARB tokens are unlocked, giving us a cheaper entry.

- Price Movement and Rebalancing:

Price increases in ARB will trigger the automated sale of a portion of the asset, capturing profits in the form of wETH. Vice versa, price decreases in ARB will result in the acquisition of additional ARB tokens using wETH, effectively increasing our overall holdings in both assets.

Proposed steps / Implementation

1. Bridging and swapping the initial amount of wETH:

The initial ETH allocation needs to be bridged to Arbitrum One, resulting in arbETH. Then, swapped from arbETH to arbwETH, keeping 0,01 arbETH for future transaction fees.
2. #### ARB Token Acquisition:
30% of the arbwETH will be swapped for ARB tokens.
3. #### Liquidity Pool Creation:
The combined arbwETH and ARB tokens will be deposited into a newly created Balancer pool.