Balancer (V2) cryptocurrency exchange is a DEX and an AMM that offers liquidity infrastructure for DeFi. The objective of Balancer is to quicken the pace of innovation in the DeFi space by giving users access to a trustworthy infrastructure for liquidity apps.
Balancer (V2) is an upgraded version of the primary Balancer (V1). The latter focused on portfolio management and liquidity provision, as well as offered a price sensor. Balancer (V2) moved closer to the founder's vision of decentralized liquidity and came with enhanced gas efficiency, capital efficiency achieved with the help of Asset Managers, permissionless AMM logic subjected to customization, protocol fees controlled by the community, and powerful oracles.
The shift to a single vault that is tasked with holding and managing the assets in all Balancer pools is the primary feature that significantly distinguishes the two versions of the protocol. Balancer (V2) has also included the possibility of holding internal token balancers, which can significantly improve the efficiency of high-frequency trading.
Overall, Balancer (V2) implements potent features that cut gas costs, supercharge capital efficiency, enable arbitrage with zero-token beginning capital, and open the door to customized AMMs.
Balancer (V2) spot market has over 120 trading pairs. The most important Balancer (V2) trading pairs include WSTETH/ETH, RETH/ETH, and OHM/DAI. The trading pair WSETH/ETH, has the highest Balancer (V2) trade volume, which makes it the most popular. Also, note that Balancer is a crypto-only exchange that doesn’t allow crypto-fiat trading.
With the release of Balancer (V2), the native utility token, BAL, was also released. It primarily is a token used for the governance of the project. BAL was released in May 2020 with the goal of making the platform's architecture more robust and competitive on the market. BAL holders can vote on various decisions concerning the Balancer (V2) platform, as well as fee usage.
The exchange has a number of different options for protocol-level Balancer (V2) crypto fees. The expenses associated with trading, withdrawing cash, and obtaining short-term loans are all included in these expenditures. Overall, the Balancer (V2) exchange fees may be as little as 0.0001% or as high as 10%.
The Vault is the most important component of the Balancer (V2) crypto exchange. Each token linked to a particular Balancer pool is stored and managed by the Vault, which, in essence, is a smart contract. In addition, it serves as the gateway for the majority of Balancer operations, including swaps, joins, and exits.
Even though the consolidated liquidity in the Vault does not have an impact on pricing on a per-pool basis, it does allow Balancer Protocol to leverage that combined liquidity by issuing Flash Loans. Flash Loans are unsecured loans that must be repaid in the same transaction as they were obtained, and Aave was the first platform to come up with the concept.
Talking about Balancer pools, they are essentially smart contracts that specify how traders can switch between tokens on Balancer. The unlimited versatility of Balancer Pools sets them apart from those of other protocols. Balancer can handle pools of any composition and underlying math, unlike other exchanges that use pools with fixed specifications. It has weighted pools, composable stable pools, liquidity bootstrapping pools, managed pools, boosted pools, and custom pools.
About the Company
Balancer (V1) was released in 2018 on the basis of the Balancer Protocol. Balancer (V2), on the other hand, rolled out on May 11, 2021.
Balancer Labs is the company that is responsible for the development of the platform. The co-founder and the CEO of Balancer Labs is Fernando Martinelli. He holds a Master's degree in robotics and vision processing and is a mechatronics engineer. He also attended business school to advance his career. Prior to this, he worked for companies like WEG, Airbus, NEO Entrepreneurial, Areva, and others. He also co-founded Cybercafe game, PrepLounge, and Brasil Mate.
Over the course of time, Martinelli became familiar with the members of the MakerDAO team and, thus, collaborated with Mike McDonald, who later became the CTO of BalancerDAO. He also collaborated with Nikolai Mushegian, who became the co-author of the Balancer Protocol whitepaper along with Martinelli.