My personal opinion is that some sort of whitelist is overall reasonable.
The way will be implemented however can be a slippery slope, metrics for these decisions are extremely subjective. I think @mike explained the challenges well.
I think a positive outcome would ensure the following things:
Create policies where Liquidity Bootstrapping Pools are not penalized.
Create policies where projects building on top of Balancer are not penalized.
Create policies for decision making and voting which are inclusive to the community and BAL holders.
More on Point 1)
This one feels the most difficult to tackle imo, assessing the legitimacy of a specific token is extremely subjective and it’s not in the scope of a protocol to do so. Protocols are usually better off when they are agnostic for the most part in the way they are used.
One question that may be worth asking is: Are BAL rewards a protocol incentive or a Balancer Labs incentive?
More on Point 2)
It would make sense to create conditions for projects actively building on Balancer to not be penalized.
Since @fabien mentioned BTC++, I’d like to expand on that.
I think the goal here is to exclude bad actors gaming the system, which is not the case for PieDAO products.
BTC++ and USD++ are in fact products on their own different from other BPT pools, which is part of the reason why they are listed on Coingecko, Defimarketcap, etc.
At PieDAO we feel smart pools are a real game-changer and have been the first project building on top of it, spending time educating users and developing before Balancer Protocol arrived to mainnet.
For instance, we are actively working on flash loans, circuit breakers, dynamic fee pools, dynamic weights and other stuff that are likely to become a strong differentiation point in the industry. They also provide an alternative implementation of smart pools (something of value for a decentralized protocol).
BTC++ and USD++ by being the TOP2 largest private pools, provide a relevant venue for liquidity designed with multihop in mind and a great fit for specific risk profiles.
Instead of focusing on providing liquidity on other AMMs like Uniswap, Balancer has been chosen as the main platform to provide access to such products and to foster the platform success, not a way to game the system.
I think BTC++ and USD++ bring value to the Balancer community and ecosystem.
Some level of inception is, for now, inevitable because of the 8 tokens limit.
The next product being developed, for instance, called DEFI++, will likely be constituted by a DEFI Small Cap Pie and a DEFI Large Cap Pie.
Those tokens (DeFiSC, DeFiLC and DeFi++) are 3 completely different products designed for different risk profiles, different upside opportunities, and different people.
Maybe a solution lies in limiting the level of nesting, something like >3 not allowed.
We are debating the subject and working on a policy right now.
More on Point 3)
Moving forward, I’d hope to see more clarity on how the decision-making process for BAL holders looks like. Ideally taking into consideration the fact that this a worldwide community and minimum time are important for timezones.
The way I think about good practice in governance leans towards stimulating participation with a combination of reducing friction from token holders, ensuring the distribution of information about governance proposals to the involved token holder, and inclusivity.
Keep up the good work guys!