Balancer DeFi project
A Balancer Pool is an automated market maker with certain key properties that cause it to function as a self-balancing weighted portfolio and price sensor.
Balancer turns the concept of an index fund on its head: instead of paying fees to portfolio managers to rebalance your portfolio, you collect fees from traders, who rebalance your portfolio by following arbitrage opportunities.
Balancer Exchange allow you to swap ERC20 tokens trustlessly across all Balancer’s liquidity pools.
Balancer is based on a particular N-dimensional surface which defines a cost function for the exchange of any pair of tokens held in a Balancer Pool. This approach was first described by V. Buterin, generalized by Alan Lu, and proven viable for market making by the popular Uniswap dapp.
We independently arrived at the same surface definition by starting with the requirement that any trade must maintain a constant proportion of value in each asset of the portfolio. We applied an invariant-based modeling approach described by Zargham et al to construct this solution. We will prove that these constant-value market makers have this property.
Balancer DeFi whitepaper https://balancer.finance/whitepaper/
Balancer was launched in March 2020 and has been audited by Trail of Bits. Balancer recently introduced its native governance tokens called BAL which are distributed to liquidity providers through a process called liquidity mining.
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 more than 40 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.
BAL token – Balancer Governance Token
Since inception, our goal at Balancer Labs has been to decentralize and diversify governance of the Balancer Protocol. We have looked into several approaches and designs, and have landed on an approach we are proud to share: the Balancer Protocol Governance Token (BAL).
We believe alignment between token holders and protocol stakeholders is crucial for successful decentralized governance. More explicitly, we believe BAL tokens are the vehicle to drive alignment and participation in the protocol. BAL tokens are not an investment; BAL token holders should be people that interface with the protocol in some way, are committed to its future development, and want a seat at the governance table.