What is Balancer (BAL) ?

In 2020, DeFi projects became a new trend in the space of cryptocurrencies, and the Balancer platform turned out to be one of the most breakout ones. Besides, it launched its own token called BAL, so let's take a look at it and the project in general. Balancer is a protocol that was designed to reduce slippage that follows exchanging cryptocurrencies. This project was developed to become a decentralized replacement for a traditional market maker, a third party that provides liquidity to traded assets. Balancer can be used by various DEX trading platforms to automatically determine the best rates and trading prices with the help of Smart Order Routing.

Who created Balancer?

Balancer Finance is a decentralized ecosystem that was launched in September 2019 by Mike McDonald in cooperation with Fernando Martinelli. At the very beginning, it used to be just a research project that was being developed on the basis of a consulting company called BlockScience. Balancer is quite similar to Uniswap except for one thing: Uniswap's users need to deposit 50 % ETH and 50 % of any crypto asset they like.

2020 was a breakthrough year for Balancer and its founders. The project became independent and got 3 million dollars in funding. The total supply is 100 million tokens. 5 % of them were awarded to investors, 25 % are owned by shareholders and employees of the company. It is also known that 10 million BAL are frozen for the fund and new investors. Other ones are in circulation and can be traded on crypto exchanges, including P2B.

Balancer (BAL)

BAL crypto token

Private pools
Give the owner governance over the pool, and make the person the sole contributor of liquidity to the pool. Also, all the parameters are mutable by the owner.
Shared pools
Are for those who want to become liquidity providers (LPs). The LPs are rewarded with the Balancer Pool Tokens (BPTs).
Smart pools
are similar to private pools but are controlled by a smart contract. They also reward using BPTs and allow anyone to contribute liquidity to the pool
Fernando Martnelli, a serial entrepreneur and Maker community member, has many years of work experience outside of Balancer. He co-founded many other companies before he started Balancer with his partner, Mike McDonald.
Mike McDonald is the co-founder and CTO at Balancer. He is a security engineer and the creator of mkr.tools He joined Fernando Martnelli to build the Balancer platform.
Frontend developers
Timur Badretdinov, is the frontend developer and has worked on several projects before working at Balancer. He founded a company called “Longcaller,” a platform focused on providing cryptocurrency reviews and educational blockchain content.

About BAL crypto

BAL was released on June 23, 2020 on the basis of the blockchain of Ethereum . On the first day, 1,000 investors received BAL from the initial supply of more than 3.5 million tokens.

After BAL was released, the token was immediately listed on the Uniswap exchange. Thanks to traders, the cost of this token jumped from $7 to over $20, but the mean daily trading volume remained on a relatively low level.

BAL crypto

On June 1, the Balancer developers launched liquidity mining. By the end of the month, they distributed 435,000 BAL tokens. In total, liquidity miners (holders of DeFi assets and pool members) are to receive up to 65 million BAL tokens. In accordance with the project documents, 25 million BAL tokens will be distributed between the Balancer technical specialists and 10 million ones will be used to develop the ecosystem.

There are two options to earn BAL:

  • The most common way to earn BAL tokens is the mentioned above liquidity mining. The platform rewards users for holding their assets in pools. The company provides BAL tokens in proportion to the amount of liquidity that each address contributes in relation to the pool's total liquidity.
  • Another way is creating a pool and taking advantage of trading fees. This system also stimulates a pool creator to reduce fees, since the lower fees, the more BAL tokens may be received. Currently, the core liquidity pools return up to 30 % per annum. The rates rose sharply after the Cap Factor update.

How does Balancer work?

BAL crypto Balancer

Balancer pools include up to 8 different cryptocurrencies just like an index fund involves several different stocks. The project uses a more detailed version of an AMM protocol. Unlike common AMM protocols, it enables users to involve much more assets. However, the basic principle between an automatic market maker and a constant mean market maker is preserved.

For example, a crypto trader may want to sell 1.5 ETH for $405 per ETH, but a buyer, in turn, is ready to purchase just 1 ETH for $395. Since there is a mismatch between the prices on each of the deal parties, no order is executed. Thus, a seller reduces the price to $400, and a buyer raises the purchase price to the same value. This leads to completing a part of the deal.

When demand is weak, sellers have to reduce prices, this means that they have to make compromises. As a result, the price of an asset decreases, but when there are too many buyers, the opposite situation occurs. In the end, both buyers and sellers tend to complete their orders without losing too much.

Why does BAL have value?

BAL have value

Balancer has proven itself to be a powerful tool for automating market making and reducing transaction fees for various cryptocurrencies. At the moment, it is a leader in the liquidity pool market. Due to its unique formula that prevents large fees the developers of Balancer have created a decentralized project that can turn into a self-sufficient ecosystem focused on the community.

As too much attention is currently paid to Balancer, its token BAL is also a hot topic. It may be interesting for cryptocurrency investors, active traders, and portfolio managers. It makes sense to invest in BAL in the long term or if you are interested in the development of the platform. Compared to many other DeFi projects, this one is definitely one of the most promising, that is why BAL is in demand now.

How to buy Balancer token?

If you would like to start trading or investing in this cryptocurrency, it is not necessary to register on Balancer BAL. BAL is available on P2B along with more than 300 other coins and tokens. Our dev team has created a safe and organic space for companies, investors, and private traders including those who are only starting their crypto journey.

On P2B, you can buy cryptocurrency in the most convenient way, for example, with a credit card. We guarantee that all transactions carried out on the platform are totally protected against any types of data leaks or cyber-attacks. Join our crypto team, participate in our traditional referral games, and get 50 PACT tokens as a welcome bonus!