Balancer

What is Balancer (BAL)?

Balancer is a DeFi (decentralized finance) protocol operating on Ethereum that aims to encourage a distributed or decentralized network filled with computers to run a DEX (decentralized exchange), which allows users to sell or purchase any cryptocurrency they want.

Founders and Partners

Balancer began its journey at BlockScience as a type of research project in 2018. It was founded by Mike McDonald and Fernando Martinelli. As for its partners, the more notable ones include the likes of Aave, 1inch, and ParaSwap.

Defining Decentralized Finance (DeFi)

DeFi is a model that has been emerging as a way to allow for and organize transactions based on cryptocurrencies, financial services, and exchanges.

The underlying premise behind the whole phenomenon is to remove centralized authorities from the mix, whereby they would no longer be able to control or dictate operations, allowing for an approach vastly different from traditional financial models. And AMMs are one aspect of the DeFi ecosystem that allows for such an approach to begin with.

Essence of Automated Market Makers (AMMs)

AMMs (Automated Market Makers) allow for the trading of virtual assets in a manner that is permissionless and automatic by utilizing liquidity pools instead of conventional markets of sellers and buyers. Through AMMs, users can use cryptocurrencies with which to supply liquidity pools, the prices of which may be discerned by constant mathematical formulas. What’s more, these liquidity pools may even be optimized for various distinct purposes and have become important instruments within the DeFi landscape.

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How Balancer Operates

Here, we will briefly discuss some of the basic aspects of Balancer’s functionality, i.e., how it is able to provide its services in the first place.

Liquidity Pools

Liquidity pools at Balancer come in two primary types, which include smart and native pools.

Native pools represent the pools that the users have created themselves and are responsible for setting up their parameters, i.e., the tokens, fees, ratios, etc., and these are further divided into two forms, mainly private or controlled forms, and public or shared forms.

With private pools, pool creators have all the control, and they can adjust or re-adjust the parameters anytime they want. With public pools, however, the parameters, once finalized, are set within stone, and no one can alter them any further.

Smart pools, on the other hand, are private pools whose management is dependent on automated smart contracts, functioning as gateways for those looking to provide liquidity. They are essentially a hybrid of public and private pools, probably incorporating the best elements of both.

Pricing and Swap Mechanism

Like any other decentralized exchange nowadays, Balancer comes with its own swap function, which allows you to easily swap tokens with one another at whatever their current prices are. As for the fees, they may range from 0.0001% to 10%. However, do note that since it is based on Ethereum, the gas fees may be a bit high.

Provision and Earnings

As alluded to earlier, users may provide liquidity to those pools and earn some BAL tokens in return, proportional to what they have deposited within pools in relation to total liquidity within the protocol. Tokens whitelisted by Balancer’s community can be accessed within pools, and subsequently, BAL tokens can be rewarded.

Interacting with Balancer Protocol

Within this section, we will be looking at how you can interact with the Balancer protocol through the wallets it supports and its integrations, executing trades or swaps, and managing or monitoring liquidity pools.

Supported Wallets and Integration

Since the Balancer protocol is based on the Ethereum blockchain, it supports several wallets, like MetaMask, for instance, and has integrated with several projects based on the same blockchain, namely Aave, Aura, 1inch, ParaSwap, PrimeDAO, and the like.

Executing Trades and Swaps

By connecting your wallet, you can easily swap or trade using the numerous cryptocurrencies it supports with minimal fees.

Managing and Monitoring

What’s more, you can even create your own liquidity pools. You can then set up the various parameters relevant to it and be entirely responsible for its management and monitoring.

Balancer’s Competitive Edge

Here, we will briefly delve into how Balancer fares against some of the other DeFi protocols similar to it, such as Uniswap and Curve.

Balancer vs. Other DeFi Protocols

Probably one of the more striking features it has that elevates it above many other DeFi protocols is how it can support so many assets within the same liquidity pool—up to 16, in fact—as opposed to only two with Uniswap and four with Curve, with more customizability.

Unique Features and Advancements

Some of its more unique features would definitely include multi-asset token pools and liquidity pool creation, having more options with regard to ratios, and investing in existing pools, all while receiving yields from simple trading.

Not to mention its customizability with regard to fees and token balances, which are among its more significant advancements.

BAL Token

We will now shift our focus towards its native token, BAL, discussing a bit about its utility and distribution.

Utility

The BAL token is what powers the entire protocol, from incentivizing liquidity provision and serving as a medium of exchange to governance.

Distribution and Allocation

The initial token distribution for BAL is 65% allocated to its community, 5% each allocated to both its fundraising and ecosystem, and finally, 25% allocated to options, investors, advisors, and founders.

Staking and Governance

Besides staking to provide liquidity for the protocol and earning some BAL, the token is integral to its governance as well, where holders either decline or approve of proposals through voting with the BAL tokens they own.

Investing Strategies

Due to the sheer customizability with regards to the creation of liquidity pools here and allocating assets —even BAL—to them, there can be a range of strategies that you can try out, which won’t be possible to the same extent on other similar protocols, like Uniswap, for instance.

Buying BAL Tokens on Binance

Now, if you have garnered an interest in the protocol and are looking to buy some BAL tokens, then let’s see how that can be done on Binance.

Registration and Verification Process

To start with, you will need to make an account on Binance first, which you can do by clicking on the link below and filling in the requested information.

Following that, you will need to get your newly created account verified or go through its KYC process. So, head over to its verification page, where you will need to enter a few personal details regarding yourself and then provide some documentation to prove whatever you entered.

Enabling Two-Factor Authentication (2FA)

To ramp up your Binance account’s security, you might want to set up 2FA on it. To do that, head over to its security page and select Set Up 2FA. Follow the instructions outlined by Binance to complete the setup, which will likely involve downloading either Binance’s own authenticator application or your standard Google Authenticator.

Funding Your Binance Account

Now, to buy some BAL tokens, you will have to fund your account first, i.e., make a deposit. To do that, go to the deposit page and select your preferred token and network, which will result in a deposit address being produced. Paste that into your wallet or an external exchange to initiate those transfers of funds.

Navigating to BAL Token on Binance

After properly funding your account, there can be a number of ways you can buy that BAL token. You can either convert what you have already deposited into it or head over to its spot or futures trading pages and search for the BAL token.

Executing the Purchase

So, after you have selected BAL as the token you want to swap or place an order for, just confirm your purchase and the tokens will be deposited into your account, which may take a while depending on what options you chose.

Storing Your BAL Tokens

Now that you have acquired what you want, you might want to store it in your wallet, which should be a secure one.

Presently, the most secure type of wallet you can own are cold wallets, which store your funds offline and are therefore more secure than their alternatives.

So, to store those BAL tokens in your wallet, simply go to Binance’s withdrawal page and select BAL as your withdrawal token and also the network for it. After that, you can just paste your wallet’s address within the withdrawal field after choosing exactly the same token and network on the wallet too.

Future Prospects and Developments

While we couldn’t come across any official roadmap for it online, as far as future prospects or developments are concerned, the protocol has explored various new chains this year, i.e., 2023. Some deployments have already gone live, and a few others have yet to go live, like zkSync, Scroll, and Linea.

Conclusion: Balancer’s Potential

Balancer is one of the more innovative and stronger DeFi protocols, one with a lot of potential. It offers various opportunities and features for its users coupled with sophisticated AMM technology that, when put together, allows the users to manage, create, and take part in numerous liquidity pools, providing a trading experience that is both decentralized and seamless.

We Coin-Labs.com provides only objective information about Balancer.
Therefore, we are not responsible for the investment decision in Balancer and the resulting loss.

Balancer Basics

Here are some factors that investors should consider before investing in Balancer.

Cryptocurrency Features	Balancer (BAL)
Publisher or Developers	Mike McDonald, Fernando Martinelli
Headquarters (Registration Number)
Symbol	BAL
Platform	Ethereum
Published Date (CMC Registration)	2024-11-01
Max Supply	96,150,704 BAL

Reliability Score of Balancer in 2024

These are indexes mesuring the investment reliability of Balancer conducted by Coin-Labs.com.

Investment Reliability Rating Items	Scores and Current Status
Company Activation Rate	/ 10.0 CAR
Communication Rate	/ 10.0 CR
Technology Transparency Rate	/ 10.0 TTR
Development Participation Rate	/ 10.0 DPR
Listing Status on the World's Top 10 Exchanges	Listed on 9 Exchanges
Number of Available Pairs Worldwide	670 Pairs
Market Cap of the Cryptocurrency	194,701,425 USD (Rank #240)

The table above shows the result of investment suitability evaluation for Balancer.
Check out how we evaluate cryptocurrencies on the crypto rating description page.

Balancer Price

Here are the price and recent trading volume of Balancer. (Data of 2024-11-02 00:35:00)

Price Items	Price and Trading Volume of Balancer
Balancer Price	1.860 USD
Price Change 24h	-2.98%
Price Change 7d	-4.57%
Trading Volume 24h	8,561,384 USD
Trading Volume Change 24h	13.84%

Cryptocurrency Metadata

You can check the development status and social media information of Balancer through the links in the table below.

Metadata Source	URL
🌎 Official Website
📖 White Paper
🛰️ Source Code (GitHub)
🐦 Twitter
🤖 Reddit
🎺 Message Board

Where to Buy Balancer

Here are the top ten world crypto exchanges where traders can buy Balancer in 2024.

Top10 Exchanges	Listed Status	Page URL
Binance	Listed	https://www.binance.com/en/trade/BAL_BTC
Coinbase	Listed	https://pro.coinbase.com/trade/BAL-USD
Kraken	Listed	https://pro.kraken.com/app/trade/bal-usd
KuCoin	Listed	https://www.kucoin.com/trade/BAL-USDT
Bitfinex	Listed	https://trading.bitfinex.com/t/BAL:USD?type=exchange
OKX	Listed	https://www.okx.com/trade-spot/bal-usdt
Huobi	Listed	https://www.huobi.com/en-us/trade/bal_usdt?type=spot
Bitstamp	Not listed
Bybit	Listed	https://www.bybit.com/trade/usdt/BALUSDT
Gate.io	Listed	https://www.gate.io/trade/BAL_USDT

Frequently Asked Questions