Balancer Review for 2023
Quick Summary: Balancer features a newbie-friendly interface with intuitive partitions so traders and investors can easily access the tools they’re searching for. The best part is that investors have access to free automatic portfolio rebalancing. In other words, you can put your cryptocurrencies to work without doing anything and earn some passive income.
Overall, Balancer is a great crypto exchange because of its simple, beginner-friendly layout, great number of multi-asset liquidity pools, big APR rewards through liquidity pools, free automated portfolio rebalancing, good customer support, and safe and secure!
Balancer ($BAL) has carved quite a nice niche for itself on the crypto market by providing what traders crave most – making money in their sleep. As an automated market maker (AMM), the trading platform provides the absolute best quotes at minimal slippage. The trading exchange is decentralized by nature, which means that it does not rely on a mediator or a governing body on decision making, execution, and liquidity. Instead, it employs protocols that draw liquidity from a joint liquidity pool and places the control in the hands of its crypto users.
By taking advantage of Balancer Smart Order Router (SOR), the platform’s algorithm knows exactly when to strike and draw liquidity from the Balancer pool. With that said, let’s delve deeper into this crypto Balancer review.
Table of Contents
Balancer Exchange at A Glance
- Website: https://balancer.fi/
- Country: Lisbon, Portugal
- Mobile App: Not available
- Deposit Methods: Cryptocurrency only
- Fiat Currencies: Does not support directly
- Cryptocurrency: ETH ,WETH, BAL, USDC, DAI, WBTC, USDT, LINK, LDO and many more
List of Features
- Quick wallet connections to various networks
- Create your own token
- Arbitrage opportunities
- Impermanent Loss Reduction
- 100+ cryptocurrencies available to trade
- Free automated portfolio rebalancing
- A large number of liquidity pools with multi-assets
- The huge APR reward is derived from liquidity pools
- Lock and earn veBAL in order to gain the right to govern
- Secure and safe decentralized exchange
- Simple and easy-to-learn layout
- Create liquidity smart pools using simple adjustments
- Completely permissionless
- Create liquidity pools using simple adjustments
- Distribution of BAL through investment
- Good customer support
- Earn veBAL to control the exchange
- Rewards for BAL members that are free
- A range of liquidity pools
- Pretty large market cap
- Rebalance your portfolios automatically
- Amazing APR rewards
- Not the most effective learning material
- No mobile app
What is the Balancer Protocol?
Balancer was founded under the name Balancer Finance in September of 2020, with co-founders Mike McDonald and Fernando Martinelli at the helm. The trading platform’s interface relies on N-dimensional invariant surfaces for its interface API, which comes directly from Uniswap and its dApp offering.
The Automated Market Makers (AMMs) used by Balancer are a series of artificial intelligence protocols that hold everything together. From managing fees, to balancing finances, to catapulting Balancer at the very top of the decentralized finance (DeFi) industry, it seems like the AMMs are well on route to nudging out any competition that has to rely on motivation in order to execute a task.
The platform also provides a native token called Balancer Token (BAL), which stands as a Compound Protocol governance DeFi asset that can be deployed in a plethora of ways. Most notably, the token can assist in building DeFi projects but it can also be set against blockchain ecosystem operations such as mining and yield farming.
Besides having a super popular liquidity protocol service, Balancer is still a decentralized exchange platform at heart. This means that users aren’t subjected to anything resembling a KYC or AMP test and get to retain their anonymity and sensitive data at all times.
In order to set up and execute a trade at Balancer, all that users have to do is connect their crypto wallet like Metamask and they’re off to the races. Once plugged in, traders have a lot of avenues to go by. Namely, they can deal in some of the most relevant and coveted tokens around, such as ZRX, BAT, USDC, REP, SNX, KNC, COMP, WBTC, pBTC, sBTC, WETH, DAI, MKR, etc.
Balancer Liquidity Pools
The trading platform’s pools can hold more than $11 million USD in USDT, BAT or COMP pools. Once a crypto trader makes an order, their assets go against the funds of the pool, so the pool acts as the counter to the shift of the pendulum and absorbs the ripples.
The exchange platform also makes use of so-called controlled or private pools. These pools offer set liquidity that is directly provided by the trade executioners themselves. This is how most centralized exchanges, like Binance and Coinbase, operate.
Of course not everyone can afford to employ their own personal pool, so most crypto traders have to rely on shared pools. If you’ve done a decentralized crypto trade, chances are you’ve probably come across a shared trading pool. Here, everyone contributes in order to keep the Merry-go-round going.
Even though these are the most widespread pools in the industry, they aren’t the only ways in which traders are able to liquidate a trade. For instance, Liquidity Bootstrapping Pools (LBPs) work in close relation with project tokens in order to build up liquidity. Users that want to dive a bit deeper into the different types of pools and learn how they can take advantage of them will have a blast setting up and exploring the training platform’s Pool Creator tool.
Balancer didn’t have its own native token when it was first made available to the public. The $BAL was introduced recently, in June of 2020, when it was set in motion to be distributed on a week per week basis. The governance $BAL token can only be redeemed by the trading platform’s liquidity providers.
Even though the $BAL tokens have no initial value, which means that they cannot be used to buy Bitcoin (BTC), they have particular value when it comes to voting with your dollars. The token is employed towards governing the exchange’s protocols and development. This way, token holders have a say in how the Balancer protocol is structured and how it moves forward in terms of fresh features, trading fees, and the employment of blockchain contracts.
With over 100 million tokens in print, Balancer’s asset is nothing to sneeze at. Most of the tokens are owned by the platform’s founders, developers, team advisers, as well as notable investors. However, Balancer users that add liquidity to the platform are welcome to engage in mining and stash some on their balance sheets.
Over 145,000 $BAL tokens, which comes at around 7.5M, are being distributed on an annual basis.
BAL Token Liquidity
Traders that are interested in BAL token liquidity mining have to understand that they are basically taking part in the platform’s liquidity supply. They are working on the DeFi protocols and are paid in governance tokens for their efforts.
By staking their acquired crypto assets they are able to earn a passive income, while their funds are being utilized as a part of the platform’s shared liquidity pool.
BAL tokens are given out proportionally in regards to the trading volume of liquidity that every trader provides. Balancer has a clever infrastructure in place that incentivizes liquidity providers to lower their fees. The lower their swap fees are set, the more BAL tokens they get on transaction fees. The liquidity creators are provided with both short term and long term options.
The Balancer Governance token is under quality control via the Balance Coin Whitelisting feature, which makes sure that liquidity pools need to feature two whitelisted coins, at the very least, in order for the transaction to fall through.
|Transaction Fees||Protocols Swap Fee||Trading Fee|
Depends on the crypto network
Depend on the fee set by the pool owner
0.0001% and 10%
The trading platform’s fee structure largely depends on where the pool owners have decided to lay their support the most. So, there are no set fees at Balancer. It all depends on the liquidity pool you employ and your digital asset of choice.
Once a trade is set in motion, the platform automatically finds the best offer on the market. From there on it’s up to the traders to check out the liquidity and the fee structure of the pool that will be employed for the execution of the trade. The numbers are still transparent, however, nothing is set in stone and can fluctuate from end to end. If traders want to browse pool fees before they automate an offer, they can always take a look at the pool management page that has all the fees and fee structures on all pools at all times.
Deposit and Withdrawal Methods
In order to deposit assets on Balancer, users will need to have a crypto wallet and handle the blockchain protocol gas fees that guide their deposit from their pocket to their balance sheet.
Withdrawals are straightforward as well. Users just need to zero in on an asset and transfer it to their Ethereum wallet, from where they can withdraw their digital currencies to the next destination or stack them and hold on to them.
Because Balancer functions as a decentralized platform, it has no funds or digital assets on its premises and servers. This by extension means that even if someone were to breach the platform or hacks happen, they won’t be able to get a hold of any user data or funds of any kind. You know when lower-ranking army officials aren’t briefed so that in the event of their capture, they can’t reveal the attack strategy even if they want to? Same principles.
However, this does not mean that DEX’s safety is bulletproof. Funds can still be traced to and from the platform. That’s why traders should always be wary of suspicious activities on fee processing and check their wallet balances.
Frequently Asked Questions
What is a Balancer Swap?
Instead of relying on order books or horsepower to process fees, Balancer employs a Balancer AMM or automated market maker protocol that automatically swaps assets at certain preferences. The preferences are manually punched in, moulded and modified by the traders that employ the protocol.
What Is Balancer Crypto?
Balder is an automatized market maker (AMM) that lets users create liquidity pools using at least eight distinct tokens, in any ratio.
Is Balancer Better Than Uniswap?
Uniswap and Balancer have distinct forms of attraction. Uniswap is a good choice for traders who want to enjoy a an unreliable level of slippage. Balancer's intuitive pools may provide more complicated trading strategies, staking techniques and are likely to appeal to crypto whales with the funds to set up an own pool.
What Does Balancer V2 Do?
The Balancer portfolio management system is an automatic as well as an An AMM (automated market maker) trading platform that permits users to effectively trade assets by making use of their liquidity pools that are widely used with low (gas) costs.
How Do Balancer Pools Work?
Balancer Pools operate smart contracts and keep their value constant by holding at least two ERC-20 tokens. Each token is weighed and the users are able to trade the tokens with other tokens from the pool. The smart contracts can adjust the pool in order to ensure the same amount of liquidity.
What Is Balancer App?
Balancer is a piece of software that runs on Ethereum that aims to stimulate the creation of a distributed computer network to manage an exchange in which users can purchase and sell any cryptocurrency.
Who Is the Owner of Balancer?
The person who started Balancer labs is Fernando Martinelli.
How Does Balancer Make Money?
Compared to other cryptocurrency exchanges, Balancer makes money by charging traders fees to balance the portfolio, charging arbitrage charges.
Is Balancer a Stablecoin?
The Balanced Dollar (bnUSD) is an ethereum-backed stablecoin that is tied to one US Dollar. It relies on ICX for collateral in order to ensure its value and will soon be able to accept different collateral types that are not available in other blockchains. Take out bnUSD to pay for your cryptocurrency, or trade it with it on an exchange called Balanced.
When Was Balancer Coin Launched?
The Balancer Labs project began in 2018 as a project of research at BlockScience the firm that provides software and consulting services founded by Fernando Martinelli and Mike McDonald. In the year 2020, the company was able to raise $3 million independently through Balancer Labs.
What Network Is Balancer on Crypto?
The Balancer protocol is an automatic market maker (AMM) protocol that is built in the Ethereum network. It lets users trade and manage virtual currency.
Is Balancer a DEX?
The Balancer protocol It is an AMM, DEX, and liquidity pool protocol that can be utilized to swap ERC-20 assets, without needing to use any centralized entity.
Is Balancer a DAO?
The Balancer community is joining with other finance protocols that are decentralized through the exchange of its Governance tokens to the tokens of other DAOs and also referred to as Treasury swaps.