What is Balancer? Balancer is an automated market maker (AMM) protocol built on Ethereum. It allows platform users to swap a variety of tokens, add liquidity to existing pools, and create new pools.
So, if there’s anything interesting about Balancer, let’s find out in the article below.
Balancer Overview
What is Balancer?
Balancer is a decentralized exchange and one of the leading automated market makers (AMMs) in the crypto world. Balancer runs on the Ethereum mainnet and allows users to benefit from several features to create DeFi products.
Balancer was launched in 2019 by Balancer Labs founders – Mike McDonald and Fernando Martinelli. Both co-founders are veteran contributors to the crypto industry and have worked collaboratively on other blockchain and DeFi projects.
During the early years of Balancer’s launch, approximately 100M BAL tokens (Balancer Navigation Tokens) were minted. The protocol released 75% of it to miners and distributed 25% to developers and their shareholders. During this process, Balancer sold off 5M tokens to the community.
Balancer Differences
Balancer’s outstanding products include:
The Balancer Exchange
Balancer allows users to trade at optimal prices. The protocol encourages efficient trading through aggregating liquidity from the community and investor portfolios to find the best prices for traders. Users can exchange any ERC-20 token pair on Balancer and have access to smart pricing, MEV protection, and gas fee optimization.
The Balancer Pools
The protocol provides two main types of pools:
Public Pool: These pools allow anyone to provide liquidity to Balancer by adding digital assets. Creators can set public pool parameters before launch, and these parameters cannot even be changed by them. The public pool is important for small-scale investors who want to earn fees from their holdings.
Private Pool: Here, only the creator can add or withdraw liquidity. Creators can also adjust pool parameters, including weighting, accepted assets, and fees. Private pools are great for asset managers who own large portfolios and want to earn fees on specific digital assets.
The Vault
Vault is the central component of Balancer. It is a smart contract that controls and stores all tokens in each Balancer pool. Apart from being an important part of the ecosystem, the vault also serves as a gateway through which users perform most of the operations such as joining, swapping and exiting the Pool.
Notes when using Balancer?
Main users on Balancer include: Liquidity Providers, Traders and Devs.
Advantage:
- Completely decentralized
- The liquidity pool is open to anyone
- AMM is customizable
Defect:
- Limited to ERC-20 tokens only
- No mobile apps available
- High gas fees
- Not beginner-friendly
- DEX is unregulated
Core Team
Balancer Labs is the organization established to begin the implementation and development of Balancer. The Balancer protocol was launched by Mike McDonald is Co-Founder of Balancer Labs and Fernando Martnelli – Founder and CEO of Balancer Labs, two active members of the Maker DeFi community.
Mike McDonald is the co-founder and Chief Technology Officer (CTO) of Balancer. He is a security engineer and the creator of mkr.tools.
Fernando Martnelli is a serial entrepreneur and Maker community member, with many years of experience working outside the home. He co-founded many other companies before co-founding Balancer with Mike McDonald.
Tokenomics
Information about Balancer tokens
- Project name: Balancer
- Token code: BAL
- Blockchain: Ethereum
- Token classification: ERC 20
- Contract: 0xba100000625a3754423978a60c9317c58a424e3d
- Token type: Governance Token
- Total Supply: 100,000,000
Token Allocation
- Liquidity Mining: 65%.
- Team & Founder: 25%.
- Ecosystem: 5%.
- Token Sale (Pre-Seed & Seed Round): 5%.
Token Release
Balancer does not provide clear information about the release time of BAL for the 3 categories Team & Founder, Balancer Ecosystem Fund and Seed Round.
Liquidity Mining will distribute 145,000 BAL per week (~7,540,000 BAL per year) and to distribute all 65 million BAL will take about 8.6 years.
Token Use Case
Currently, BAL token only has 2 main incentives:
- Governance: BAL token holders can participate in proposals, vote on decisions such as adding/removing protocol functions, changing fees, etc.
- Rewards: BAL is used as a reward for Liquidity Providers (LPs) on selected Pools.
Exchanges
Currently BAL is being traded on a number of exchanges such as Binance, Kucoin, Coinbase, Houbi,…
Balancer’s Information Channel
- Website: https://balancer.fi/
- Twitter: https://twitter.com/BalancerLabs
- Medium: https://medium.com/balancer-protocol
- Discord: https://discord.balancer.fi/
Summary
Since its launch Balancer has risen to be in the top 15 DEX exchanges on Ethereum by trading volume. Currently, Balancer is deployed on 3 blockchains Ethereum, Polygon and Arbitrum. With technological advantages and abundant liquidity of the Ethereum blockchain, Balancer may be the name that will go very far in the Defi segment in the near future. Let’s look forward to it!
