Tutorial: Setting Up a Pool

Here we'll walk through a step-by-step guide to deploying and setting up a new pool. The deployment should be carried out using the blend_utils repo which has scripts for doing so.

NOTE: this guide may be out of date - we recommend cross-referencing with the up to date guide here: https://github.com/blend-capital/blend-utils?tab=readme-ov-file#pool-deployment

Step 1: Decide on an oracle

The oracle is backbone of a pool, and cannot be changed once an oracle is set.

Please review Selecting an Oracle.

Step 2: Deploy a new Pool Contract

We first deploy a new pool contract by calling the deploy() function on the Pool Factory Contract. The function takes the following parameters:

Parameter	Type	Description
admin	Address	Address of the pool admin. More Information : Pool Management
name	String	The Pool name. Used by UI's to render a name for the pool.
salt	BytesN<32>	Random bytes used to generate the pool contract address
oracle	Address	Address of the oracle contract used by the pool. More Information: Selecting an Oracle
backstop_take_rate	u32	Pool backstop take rate. Scaled to 7 decimals. More Information: Setting Backstop Take Rate
max_positions	u32	Pool max positions. No decimals. More Information: Setting Max Positions
min_collateral	i128	The minimum collateral amount required to open a borrow position. Should be set higher than the gas cost required to liquidate the position. $1 is fine.

The deployment function will return the new Pool Contract's address.

The Pool Factory contract address can be found here: Deployments

Many of the pool setup functions can only be called by the pool admin. If the pool creator intends for the admin to be a DAO or multisig it may be preferable for them to continue using their account to finish setting up the pool, then transfer pool ownership to the final admin using the Pool Contract's set_admin() function.

Step 3: Add Pool Reserves

After the pool is deployed we add assets (reserves) to it by calling the Pool Contract's queue_set_reserve() function. The function takes the following parameters:

Parameter	Type	Description
asset	Address	Token Contract address of the asset being added to the pool
metadata	ReserveConfig	The reserve configuration for the new asset.

The ReserveConfig struct is constructed as follows:

pub struct ReserveConfig {
    pub index: u32,      // the index of the reserve in the list
    pub decimals: u32,   // the decimals used in both the bToken and underlying contract
    pub c_factor: u32,   // the collateral factor for the reserve scaled expressed in 7 decimals
    pub l_factor: u32,   // the liability factor for the reserve scaled expressed in 7 decimals
    pub util: u32,       // the target utilization rate scaled expressed in 7 decimals
    pub max_util: u32,   // the maximum allowed utilization rate scaled expressed in 7 decimals
    pub r_base: u32, // the R0 value (base rate) in the interest rate formula scaled expressed in 7 decimals
    pub r_one: u32,  // the R1 value in the interest rate formula scaled expressed in 7 decimals
    pub r_two: u32,  // the R2 value in the interest rate formula scaled expressed in 7 decimals
    pub r_three: u32, // the R3 value in the interest rate formula scaled expressed in 7 decimals
    pub reactivity: u32, // the reactivity constant for the reserve scaled expressed in 7 decimals
    pub collateral_cap: i128, // the total amount of underlying tokens that can be used as collateral
    pub enabled: bool,        // the enabled flag of the reserve
}

• The reserve index will be assigned by the set_reserve() function, the parameter does not matter when setting up the asset.

• The reserve decimals must match the number of decimals the new asset has, as defined by the asset's Token Contract. Stellar Classic assets have 7 decimals.

• More information on reserve c_factor, l_factor, and max_util, can be found here: Risk Parameters

• More information on reserve util, r_base, r_one, r_two, r_three, and reactivity can be found here: Interest Rates

After the reserve is queued we finalize the addition by calling set_reserve() function. The function takes the following parameters:

Parameter	Type	Description
asset	Address	Token Contract address of the asset being added to the pool

Pool creator's should be careful not to update the pool status before adding all initial reserves. If they do there will be a manditory 7 day delay between calling queue_set_reserve() and set_reserve()

Step 4: Set up Pool Emissions

After reserves are added, we set up pool emissions by calling the set_emissions_config() function. The function takes the following parameters:

Parameter	Type	Description
res_emission_metadata	Vec<ReserveEmissionMetadata>	A vector of ReserveEmissionMetadata structs. These structs govern how pool emissions are distributed between pool assets.

The ReserveEmissionMetadata struct is constructed as follows:

pub struct ReserveEmissionMetadata {
    pub res_index: u32, // index of the reserve as defined by the ReserveConfig
    pub res_type: u32,  // 0 for liabilities, 1 for supply
    pub share: u64, // percent of the total pool emissions this reserve should receive. Scaled to 7 decimals
}

• res_index is the index of the reserve defined by the ReserveConfig struct. It was returned by the set_reserve() function. Reserve index's are set based on the order the reserves were added to the pool (the first reserve will have index 0, the next index 1, etc.).

• res_type designates whether lenders or borrowers of the reserve will receive emissions. If liabilities are designated borrowers receive emissions, if supply is designated lenders receive emissions. It is possible for both to receive emissions, the vec input into the set_emissions_config() function just must include a ReserveEmissionMetadata struct for both reserve liabilities and supply.

• share is the percent of total pool emissions the reserve (and reserve type) should receive. The total of all input ReserveEmissionMetadata share's must equal 10000000.

Step 5 (optional): Set up Pool Backstop

If the pool creator wishes to, they can fund the pool's backstop at this point so that the pool meets the minimum backstop threshold allowing it to be activated and potentially added to the backstop reward zone.

It is highly recommended to test your pool before depositing into the backstop.

For example, is there is a reserve that cannot have a priced fetched on the oracle, you will not be able to use the pool.

An easy way to preview pool configuration is to navigate to your pool via the Blend UI. Searching /dashboard?poolId=C... will attempt to load the pool via the UI.

How many Backstop Tokens do I need?

To reach the minimum backstop threshold a blend pool's backstop must have enough backstop LP tokens for their associated reserves to reach a product constant value of 200,000. This can be calculated with the following formula

$$k=x^{0.8}*y^{0.2}$$

Where:

• k = Product Constant

• x = Blend Amount

• y = USDC amount

At current rates each LP token's associated reserves have a product constant of around 2. So 50,000 LP tokens are sufficient to reach the backstop threshold.

Acquiring Backstop Tokens

To fund the backstop module we first need to acquire backstop tokens (80:20 BLND:USDC comet LP tokens). These can be acquired in 3 different ways depending on the assets we have on hand.

Individuals based outside of restricted jurisdictions can acquire backstop tokens via any of these options using the Blend UI https://mainnet.blend.capital/

Option 1: Acquiring Backstop tokens using only USDC

To acquire backstop tokens with only USDC we must execute a single sided deposit on the Comet Liquidity Pool by calling the dep_lp_tokn_amt_out_get_tokn_in function. The function has the following parameters:

Parameter	Type	Description
token_in	Address	Address of the token being deposited (in this case USDC)
pool_amount_out	i128	The number of pool tokens to mint
max_amount_in	i128	The maximum amount of tokens (in this case USDC) you're willing to deposit
user	Address	Address of the user depositing

Option 2: Acquiring Backstop Tokens using Both BLND and USDC

We use the Comet Liquidity Pool's join_pool function to mint backstop tokens using both BLND and USDC. It has the following parameters:

Parameter	Type	Description
pool_amount_out	i128	The number of pool tokens to mint
max_amounts_in	Vec<i128>	The maximum amount of tokens you're willing to deposit. BLND amount is first in the Vec, USDC amount is second.
user	Address	Address of the user depositing

Option 3: Acquiring Backstop Tokens using BLND

To acquire backstop tokens with only BLND we execute a single sided deposit on the Comet Liquidity Pool by calling the dep_lp_tokn_amt_out_get_tokn_in function. This is much the same as option 1, except the deposit token is BLND and the max amount in is the maximum BLND you're willing to deposit.

Depositing Backstop Tokens

We can deposit backstop tokens into the backstop by calling deposit() on the Backstop contract. It has the following parameters:

Parameter	Type	Description
from	Address	The address of the user depositing the tokens
pool_address	Address	The address of the pool the backstop deposit is being made to. In this case it's the address of your pool.
amount	i128	The number of backstop tokens you wish to deposit.

Other Options to Fund the Backstop

If the pool creator does not wish to fund the entire backstop themselves they have 2 options.

Backstop Bootstrapping

A pool creator with a large amount of BLND or USDC that does not wish to create significant market impact by setting up their backstop can choose to use the Backstop Bootstrapper contract to facilitate a community backstop deposit.

More details can be found here:

Backstop Bootstrapping

Community Funding

If the creator does not want to put much (or any) capital into the pool's backstop they can still deploy the pool without depositing into the backstop and just publicize the deployment to the blend community, inviting them to deposit.

The contract addresses for the Comet Pool contract, the Backstop contract, and the Backstop Bootstrapper contract can be found here: Deployments

Step 5: Activating the Pool

Now that all pool parameters are set we need to turn the pool on. We can do so using the Pool contract's set_status() function. It has the following parameters:

Parameter	Type	Description
pool_status	u32	Pool Status: 0 = admin active - requires that the backstop threshold is met. Allows both deposits and borrowing 2 = admin on-ice - allows deposits but not borrowing 4 = admin frozen - does not allow deposits or borrowing

Here we recommend that you set the pool to on_ice then, if the backstop has been funded, call the Pool contract's update_status() function (no parameters) which will set the status to active. Admin active is a elevated status which makes it harder for the backstop to shut the pool down.

Step 6 (optional): Add Pool to Reward Zone

At this point if the pool's backstop was funded in Step 4 so that it has met the backstop threshold we can add the pool to the Backstop Contract's reward zone so it begins receiving emissions.

We do so by calling the add_reward() function on the Backstop contract. It has the following parameters:

Parameter	Type	Description
to_add	Address	The address of the pool being added to the reward zone. In this case your pool's contract address.
to_remove	Address	The address of the pool being removed from the reward zone. This parameter only matters if the reward zone is full (it currently isn't), in which case your pool must have a larger backstop than one currently in the reward zone. In that case this parameter will be the address of the pool your pool is replacing.

And that's it! Your done! If you've completed all 6 steps your pool will now show up in the markets page at https://mainnet.blend.capital/