Plaza uses Balancer Pool LP (BLP) tokens as the underlying pool asset to allow user to contribute and gain exposure to a variety of underlying pool when creating bondETH and levETH. A user may deposit a single asset, which is converted to BLP tokens and automatically deposited in the pool. The pool calculates a fair price for the deposited BLP when calculating the number of derivatives to return.
The managed pool consists of a range of liquid staking tokens (LSTs) and liquid restaking tokens (LRTs) for ETH:
The pool is governed by the Balancer Pool mechanics, where each asset is assigned a specific weight and contributes to the overall price of the Balancer Pool LP tokens.
Instead of determining rewards based on the price of ETH, the system calculates the value of derivatives using the price of the Balancer Pool Tokens (BPT). These LP tokens represent a share in the entire pool, which includes the listed LSTs and LRTs. The contract integrates directly with the Balancer liquidity pool, using the Balancer invariant formula to evaluate the on-chain price of the LP tokens.
Using Balancer’s invariant formula, the contract determines the fair value of the pool’s LP tokens, and this value is then converted into USD by referencing the real-time ETH/USD price from Chainlink. This allows the system to dynamically adjust the amount of derivatives distributed based on the real market value of the pool.
The formula used to calculate the price of each BPT is the following:
Price_{BPT}=\frac{V}{Supply_{BPT}}*\prod_{i}^{n}(\frac{Price_i}{Weight_i})^{Weight_i}
Where the invariant, V, is defined as below:
V=\prod_{i}^{n}Balance_i^{Weight_i}