Last week, Balancer Labs – a non-custodial portfolio manager, liquidity provider, and price sensor – announced a $3M seed round lead by highly reputable funds like Placeholder VC.
For those who are unfamiliar with Balancer, the protocol allows users to contribute liquidity to larger pools with one token, rather than having to deposit an ERC20 and ETH in the case of Uniswap. What’s more, is that liquidity providers stand to earn fees whenever a pool is rebalanced, effectively providing an outlet for passive income on assets not supporting by major lending protocols like Compound.
Today, Balance builds on their fundraising momentum by unveiling their mainnet launch with a suite of features which have been battle-tested internally since February.
Balancer is Live ?? https://t.co/5cansWR7M3
— Balancer Labs (@BalancerLabs) March 31, 2020
What’s New?
For casual users, the Balancer Exchange offers a sleek Uniswap like feel – quickly allowing users to swap between two tokens in a few clicks. At the time of writing, the exchange currently supports 12 tokens, while those with liquidity include ETH, DAI, MKR, USDC, WETH, SNX, ZRX and REP.
For those with capital to spare, they can either create or add to a capital pool through the Pool Management aspect of the platform. Creators have the ability to customize the makeup of their Balancer Pool along with a Swap Fee to incentivize new capital to say within the pool.
Beyond the user-facing interfaces, the mainnet launch comes with a suite of open source code including:
- Core Contracts – A suite of contracts which allows anyone to fork and customize the protocol
- Smart Order Routing – A tool to optimize orders across the Balance ecosystem
- Exchange Proxy – A forwarding proxy that atomically executes all swaps provided from the SOR in a single transaction.
Similarly, Balance has partnered with the leading DEX aggregator 1inch to further seed liquidity on the exchange. Along with the opportunity for anyone to create a queriable dashboard using Dune Analytics and a Balancer-specific subgraph for faster queries using The Graph protocol, it’s never been easier to keep up with things happening under the hood.
What To Expect
In the coming weeks, Balance will be experimenting with different versions of “Smart Pools” – effectively seeking to mitigate existing liquidity hurdles like impermanent loss. As stated in the original article:
“We have several templates in the works for pools such as liquidity bootstrapping pools, rolling synthetic pools, zero impermanent-loss stablecoin pools, dynamic swap fee pools, and more!”
To synthesize, it’s evident that Balancer is taking a strong lead on incentivizing users to contribute liquidity of any kind through a suite of benefits currently unavailable or fragmented across the wider ecosystem.
1/ @BalancerLabs inverts the economics of indexed asset management.
Instead of investors paying annual fees to indexed portfolio managers, with Balancer the investors get paid for contributing their asset portfolios to indexed pools. https://t.co/i7AEUCIIUe
— Chris Burniske (@cburniske) March 28, 2020
Why Does This Matter?
As we continue to watch DEXs soar in volume, protocols like Balancer further optimize the trading experience by mitigating slippage and catering to specific investor profiles. For those who have used DEXs in recent month, its no surprise that the usability is becoming smoother by the day, and we further expect Balancer’s tools to expand on this conversation through digestible liquidity incentive onramps.
As a DeFi user, it’s exciting to see all the different opportunities at our disposal – both when it comes to trading and passive income opportunities.
If you’re a developer looking to integrate Balancer into your product or experiment, here’s a list of official documents.
To keep up on all things Balancer, we recommend following their official Twitter here.
Cooper is focused on building compelling blockchain products. He currently works as the managing director at Fitzner Blockchain Consulting and is a contributor to DAOs like MetaCartel and Moloch. He is an active member of the Ethereum community and has a strong interest in for-profit businesses such as The Block Crypto and Messari.
