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What Is Balancer?

Released in March 2020, the Balancer protocol is an Ethereum-based automated market maker (AMM) that enables users to earn fees by contributing to the platform by providing liquidity using multiple tokens. Balancer is a second-layer infrastructure platform built on top of Uniswap that allows AMMs to combine multiple unevenly weighted assets into a single pool.Described by some as a self-balancing crypto-ETF, Balancer allows users to create and manage their own personalized index fund by creating liquidity pools, or invest in an existing LP. These funds are self-balancing, meaning that currencies can be exchanged without the need to exit the liquidity pool.

AMMs allow market-making to take place without intermediaries, rather, by the use of algorithms that determine the rules of trades.

The Balancer Pool Management dashboard allows users to add or remove liquidity from different pools and oversee the liquidity and trading volumes of each pool.

With the use of Balancer’s Constant Mean Market Maker (CMMM), up to eight different crypto assets can be entered, swapped, and removed from LPs without friction.

How Does Balancer Work?

Balancer has a sleek UI, but under the hood, there are some sophisticated mechanics at work that allow such dexterity in LP management.

There are three variations of the Balancer pool: Private Pools, Shared Pools, and Smart Pools.

Private Pools:

There is only ever one single LP in charge of the pool.

Shared Pools:

Liquidity can be added by anyone. Ownership of the pool is tracked by the Balancer Pool Token (BPT).

Smart Pools:

Similar to Shared Pools, liquidity can be added by anyone, with ownership tracked by BPT. The main difference is that this pool is operated by a smart contract that enables users to readjust balances, weighting, and fees.

Pools are owned by liquidity providers that can create pools and profit from the trading fees. This model is similar to that of Uniswap, but the key difference is that LPs on Balancer can use ERC-20 tokens of their choice to create a pool and also set custom trading fees.

Rebalancing works when an LP creator decides how much of each asset will be in a liquidity pool. As an asset is traded from the pool, the percentage of that asset’s weight within the pool reduces. If the prices of the assets within the pool begin to deviate from market prices, the price differences are taken care of by arbitrators.

Though there are currently no fees from trades on Balancer, this could soon be implemented.

What Problems Does Balancer Solve?

Centralized exchanges provide an on-ramp for new users. Once a user has gone through KYC, the rest is pretty simple. Custodial services from centralized exchanges are also appealing to those that are new to crypto.

However, the incredible rise in decentralized exchange volumes in recent months are shadowing their heavily regulated counterparts. DeFi platforms like Balancer allow users to provide liquidity and trade without KYC, from anywhere in the world.

The BAL Token

When released in March 2020, Balancer was not fully decentralized. Parent company “Balancer Labs” raised $3 million of investment in the March seed round. The first iteration of the protocol meant that users were not able to participate in the governance of the protocol, though the BAL token is designed to take care of this.

The BAL token is intended to be a governance token, similar to COMP or MKR. BAL will give users governance rights to decide the future of the protocol as it matures into decentralization. The yield farming hype that has propelled DeFi in recent months has made BAL a speculative and highly traded asset.

The Balancer Hack

Very early in the protocol’s history, Balancer was hacked. Four months after launch, the protocol was exploited for roughly $500,000. The sophisticated attack was carried out using a Flash Loan from dYdX and the deflationary Statera (STA) token.

The attacker took out a flash loan from dYdX to the sum of approximately 104,000 WETH, worth around $23 million at the time. This was swapped multiple times for STA. As each transaction burned around 1% of the STA, the amount of WETH increased dramatically.

Balancer did assure users that all lost funds would be reimbursed, which shows a great deal of integrity considering the impact on the reputation of the platform so early on.

Conclusion

Users can put their crypto to work by earning fees for participation, which is handy for the over-hodlers among us. You could deposit your entire portfolio, should you wish to, into these rebalancing LPs as others trade against your portfolio.

Asset prices are not fed by outside oracles as LPs don’t change unless a trade takes place within the pool. In the future, Balancer could be used to pool real estate and other assets. DeFi platforms aimed at the retail sector are becoming increasingly popular, expanding into new territory regularly.

With Curve and Uniswap both upping their AMM game, Balancer could be a serious competitor in the DeFi space if they are able to incentivize users. Balancer is still very young and has come a long way in such a short period. In time, it could compete with some of the most popular DeFi platforms on Ethereum.

Qtum Teams Up with Blockpass To Deliver On-Chain KYC

Qtum, the advanced blockchain platform and growing decentralized finance (DeFi) ecosystem has announced its partnership with the leading on-chain KYC provider Blockpass.

According to the recent press release, the new partnership will see Qtum begin offering subsidies to specific firms looking to implement Blockpass’ on-chain KYC services to achieve regulatory compliance.

With an increasing number of blockchain-powered projects looking to securely implement KYC services, providers like Blockpass represent an increasingly attractive proposition in an industry where regulatory compliance is becoming the focus of many startups.

As a KYC and AML services provider, Blockpass’ services make it easy for firms to easily and securely verify the identity of their customers and clients, and thanks to its clever use of blockchain technology and automation, it can screen users for as low as 12 cents per individual — making it attractive to firms looking to screen large numbers of users quickly and with zero hassle.

On-chain KYC will become a critical component for numerous protocols on the decentralized web,” said Qtum co-founder Jordan Earls in the press release. “Rather than hinder innovators who are seeking to stay compliant while enabling new technologies, the Qtum Foundation would like to support those builders by backing Blockpass’ expansion to the Qtum blockchain.”

This is the latest in a series of announcements for Qtum, which recently ramped up its moves in the decentralized finance space with the launch of its own automated market maker (AMM) platform in QiSwap, as well as a generous grant program for innovators looking to build creative DeFi solutions on Qtum chain.

As arguably the most successful fork of Bitcoin, Qtum separates itself from other blockchain platforms in that it combines the UTXO transaction system of Bitcoin with the Ethereum Virtual Machine (EVM). This makes it uniquely positioned to offer a stable, secure environment for decentralized applications while being accessible to Solidity developers experienced with building on Ethereum.

“We’ve known and been fans of the Qtum team and network for a long time, and it’s great to have the opportunity to work closely with them,” said Blockpass CEO Adam Vaziri.

Biswap DEX Unveils Improved AMM as Part of Its Ambitious 2023 Roadmap

New York, United States, 31st January, 2023, Chainwire

BNB Chain decentralized exchange Biswap has published its 2023 roadmap which includes a number of proposed improvements and upgrades. It includes details of a new AMM, route optimization, and perpetual trading.

Take a look at the main Biswap benefits: https://biswap.org/.

A new AMM protocol with concentrated liquidity will allow Liquidity Providers to accumulate their capital to smaller price intervals than from 0 to infinity, increasing capital use efficiency and providing users with more profitable exchange conditions with less slippage.

Improved routing to find the best trading pairs will allow users to execute larger transactions with less slippage and increase capital efficiency, as well as receive greater rewards from trading fees for Liquidity Providers.

To reduce pressure on the price of the native Biswap token and provide opportunities for more earnings for long-term BSW token holders, the Biswap team has developed several initiatives. In the future, they will be explained and put forward to BSW holders for voting.

Evolving market trends have also prompted the Biswap team to implement decentralized futures trading (with an on-chain order book on the BNB network). To implement this idea in a safe manner, the team has decided to connect a ready-made solution from ApolloX at this stage of product development.

As part of the Biswap ecosystem expansion, there are plans to create a widget that will increase trading with Biswap Liquidity and make it more convenient for users to exchange tokens. This will be available for implementation on third-party products.

Biswap’s progressive DEX on BNB Chain features a Multi-type Referral Program and low trading fees of 0.1%. The platform provides various services with cryptocurrencies, such as Exchange, Farming, and Staking. Moreover, the project has its native BEP-20 token, BSW, which allows users to join the most popular features on the platform. The primary BSW function is to incentivize liquidity provision to the Biswap platform.

High LP rewards allow Liquidity Providers to get 0.15% back from token swap transactions. Also, Liquidity Providers can stake LP tokens on farms to earn BSW tokens with competitive APYs. Up to 50% trade fee reimbursement returns users the transaction fee when they exchange tokens. The system automatically gives back the fee in the form of BSW tokens. Explore Biswap NOW

About BiswapBiswap is the progressive DEX platform on the BNB Chain network with a Multi-type Referral Program and the lowest trade fee of 0.1%. The platform provides various services with cryptocurrencies, such as Exchange, Farming, Staking and others.

Contact

Marketing BiswapBiswapmarketing@biswap.org

Ripple CTO Advocates for Community Consensus on XRP Ledger's AMM Feature Integration

David “JoelKatz” Schwartz, the Chief Technology Officer at Ripple, has been actively engaging with the community regarding the integration of an Automated Market Maker (AMM) feature on the XRP Ledger (XRPL). Through a series of posts on the social media platform X (formerly known as Twitter), Schwartz highlighted the importance of community consensus before moving forward with this significant feature addition.

On 6th October 2023, Schwartz voiced his plan to review performance testing results and conduct code checks based on recent comments and concerns raised by the community. Through his post, he displayed a methodical approach, ensuring that all uncertainties are addressed before urging the validators to consider supporting the amendment. When probed by a community member about the communication channel with validators, Schwartz humorously mentioned that most of his arguments take place on Twitter.

The discussion primarily revolves around the integration of AMMs, which Schwartz describes as an intriguing part of decentralized finance (DeFi). The XRP Ledger, known for its speed, scalability, and suitability for various financial applications including cross-border payments, stands to benefit from this integration. AMMs are not merely about introducing a new trading engine; they also promise enhanced interaction with XRPL’s decentralized exchange.

The new feature, introduced in the rippled version 1.12.0, also carries the potential clawback feature. The clawback feature, as explained by Schwartz in previous discussions, aims to protect developers from potential legal liabilities within the XRPL ecosystem.

Schwartz emphasizes the need for a majority consensus within the community before implementing the AMM feature. Responding to a question about the timeline for AMMs going live post-governance voting, he mentioned that with majority support, the changes could be seen in as little as two weeks. However, no validators have endorsed the vote to the best of his knowledge, underscoring the importance of community agreement before proceeding with such amendments.

He advised against validators voting independently to promote these modifications, stressing that the community should reach consensus first. Only then should validators overwhelmingly vote YES, when a substantial number of nodes endorse the adjustment, reflecting a broad agreement within the XRPL community.

David Schwartz continues to play a crucial role in fostering a dialogue between the Ripple team, XRPL validators, and the broader community. His meticulous approach towards integrating new features like AMM, while ensuring community consensus, reflects a balanced stance towards evolving the XRPL while maintaining its decentralized ethos.

Sushi Announces Final Steps for Trident Pools Deprecation, Urges Liquidity Withdrawal

Sushi, the innovative decentralized exchange, has announced the commencement of the final phase of Trident pools deprecation. This marks a pivotal moment for the platform as it streamlines its offerings to enhance user experience and operational efficiency. As Sushi continues to evolve its services, it has initiated the last call for liquidity providers to withdraw their assets from the Trident Pools before the deprecation deadline on March 15, 2024.

The Evolution of Sushi’s AMM Platform

The Trident framework was launched with the promise of offering an improved Automated Market Maker (AMM) design, featuring the Constant Product Pool, lower gas fees, and integration with BentoBox for better efficiency. In May 2023, Sushi V3 AMM was introduced as the next iteration of this platform, paving the way for the deprecation of Trident Pools.

Urgent Call to Action for Liquidity Providers

Sushi has made an urgent call to its users to withdraw their liquidity from Trident Pools by the specified deadline to avoid any potential issues. After March 15, 2024, the user interface (UI) for Trident Pools will be discontinued, leaving smart contract interactions or manual support as the only methods for withdrawal, which could result in delays.

Migrating to Sushi V3 AMM

For liquidity providers interested in continuing their participation with Sushi, the platform is encouraging a migration to the more efficient Sushi V3 AMM. To aid this transition, Sushi has made available detailed guides, frequently asked questions (FAQ), and dedicated support channels to assist users throughout the migration process.

Implications for the DeFi Ecosystem

The deprecation of Trident Pools is both a reflection of the natural progression of DeFi platforms and a reminder of the importance of user engagement in maintaining the health of decentralized ecosystems. Sushi’s proactive approach in guiding users through this transition highlights the platform’s commitment to user-centric development and innovation.

Preparing for the Future

As the DeFi landscape continues to mature, Sushi’s actions underscore the need for continuous adaptation and improvement. The platform’s focus on enhancing efficiency and usability through its V3 AMM indicates a forward-thinking strategy aimed at securing its position as a leading player in the DeFi space.

In light of this announcement, Sushi has reasserted its dedication to delivering a seamless DeFi experience. As the March 15 deadline approaches, users are urged to take the necessary steps to transition their assets and continue their DeFi journey with Sushi’s evolving ecosystem.