Balancer (BAL)

What Is Balancer (BAL)?

Balancer is an automated market maker (AMM) that was introduced in March 2020 on the Ethereum blockchain. Placeholder and Accomplice assisted it to raise $3 million in a seed round. The Balancer protocol is a weighted portfolio that self-balances, a price sensor, and a liquidity provider. It enables users to gain by contributing to customised liquidity pools via its newly launched token ($BAL).

The protocol runs several types of pools:

• The owner of a private pool has absolute control over the pool and is the pool's sole contributor to liquidity. The owner can also modify all the variables.

• Shared pools are intended for people who want to become liquidity providers (LPs). The Balancer Pool Tokens(BPTs) are awarded to the LPs.

• Smart pools are comparable to private pools, except that they are managed by a smart contract. They also incentivize the usage of BPTs and enable individuals to participate in the pool's liquidity.

Who Are the Founders of Balancer?

Fernando Martinelli and Mike McDonald formed Balancer Lab, however, it started as a research programme at the software firm "BlockScience" in 2018. The Balancer project brings together intellectual, resembling individuals who are well in the DeFi sector. 

Apart from Balancer, Fernando Martnelli, a serial entrepreneur and member of the Maker community, has extensive job experience. Before beginning Balancer with his partner, Mike McDonald, he co-founded a range of other companies. 

The balancer's co-founder and CTO is Mike McDonald. He is the founder of MKR. tools and a security engineer. He worked on the Balancer platform with Fernando Martnelli.

Kristen Stone, Balancer's COO, has almost five years of experience in the crypto industry. She served for Coinbase as a product manager and created product and engineering teams. 

Timur Badretdinov is a frontend developer who has formerly worked on a range of projects before joining Balancer. He established "Longcaller," a service that specialises in cryptocurrency reviews and educational blockchain content.

What Makes Balancer Unique?

In the same approach that Uniswap and Curve allow anyone to create token pools, Balancer offers that too. Despite price fluctuations, the pool alters itself to maintain the tokens' equal weight. Balancer, on the other side, has a distinct characteristic in that it enables you to add multiple tokens without using ETH. 

Even though Balancer isn't the first DeFi protocol to use AMMs, it has given liquidity a new face. The protocol's distinguishing feature is that it facilitates liquidity providers to have up to eight assets per market, each of which is automatically rebalanced and weighted by percentage.

Users don't have to deposit 50% of the desired asset with Balancer; rather, they can decide how much of a supported asset they want to deposit. Another unique aspect of Balancer Lab is that it allows customers to earn a high return on low-demand assets through arbitrage and slippage reduction.

How Many Balancer Tokens (BAL) Are There in Circulation?

A native token was not included in the launch of Balancer. Following the achievement of Compound's token COMP, they released a governance token, $BAL, in June 2020. The token's objective is to provide for increased decentralisation and to also provide an incentive for LP. 

25 million tokens were allotted for the team, core developers, investors, and advisors out of a total of 100 million tokens created. The Balancer Ecosystem Fund was issued 5 million tokens, which would be utilised as rewards for strategic partners. A further $5 million was set aside for the fundraising fund. Balancer will use this amount to assist its operations and growth at future fundraising events.

Liquidity providers on the platform will mine the rest tokens, which will be issued at a rate of 145K per week. It would take around 8.6 years to complete releasing the tokens if the distribution rate remained constant.

How Is the Balancer Network Secured?

Security is a foremost priority of Balancer, that is why it has been thoroughly verified three times by Trail of Bits, ConsenSys, and OpenZeppelin. There are no admin keys or backdoors, considering the system is unreliable, and the balancer pools cannot be upgraded. Although they may be used on some pools, Balancer does not support tokens that do not correspond to the ERC-20 standard. 

Balancer does not manage the tokens held in its pools; instead, they are smart contracts. However, this does not eliminate the risks related to smart contracts. CRPs (configurable rights pools) assure that tokens with known problems are not allowed to be utilised in pools.

Where Can You Buy Balancer Token (BAL)?

Balancer enables users to share to liquidity pools to earn $BAL, which is automatically distributed to users weekly. Some top exchanges support $BAL.