Balancer Labs has completed its first round of governance polls for the Balancer (BAL) network, the team announced via Twitter on July 18.
Balancer is a money market protocol through which users can contribute liquidity and consequently earn a portion of the generated trading fees. Launched in March 2020, it became the fastest growing DeFi platform in June, and despite suffering from a $500,000 security vulnerability, continues to grow. It is one of many DeFi protocols that features liquidity reward programs.
The polls follow the introduction of the Minimum Viable Governance tool, which uses the amount of BAL in an account to approve or reject a proposal. Three weekend polls were conducted:
- balFactor, which incentivizes BAL liquidity on Balancer
- Modifying feeFactor, which reduces the mining penalty for high fee pools
- wrapFactor, which changed the multiplier for soft-pegged assets.
balFactor incentivizes users to hang onto BAL tokens for governance by offering a multiplier of 1.5x. The feeFactor proposal changes the penalty for high-fee pools such that pools with higher fees would earn more BAL as compared to pools with lower fees. wrapFactor simply adds a small penalty to soft-pegged pools. All three proposals were passed.
The proposals will be implemented in the liquidity mining distribution in the week of July 20.
Several developments by some of the biggest players in the space have been behind the surge in DeFi, which had already been on an upward trend since the start of 2019. Kyber Network (KNC) recently launched its Katalyst upgrade, accompanied by the governance portal KyberDAO, while lending platforms like Aave (LEND) have released new features like credit delegation. Meanwhile, exchanges like Coinbase and Kraken have also added some of the most prominent DeFi tokens, increasing their exposure and availability.
The DeFi space now has nearly $3 billion in total value locked in at the time of publishing. Liquidity reward programs and the popularization of the yield farming, like that of Compound Finance’s COMP, Ampleforth’s Geyser program or Synthetix (SNX), have contributed to DeFi's growth significantly.
