. What is Balancer (BAL)? Crypto Currency BAL Token in Details – In this article, What is Balancer (BAL)? We will answer the question and provide detailed information about the project.
What is Balancer (BAL)?
Balancer is an automated market maker, decentralized exchange and liquidity pool protocol built on Ethereum that allows users to provide liquidity for multiple assets simultaneously.
Developing the idea of liquidity pools pioneered by Uniswap and Bancor, Balancer allows specific asset ratios for each pool rather than just 50-50 of each asset.
Each pool can set its own customized transaction fee that rewards liquidity providers at risk of temporary loss due to fluctuations in the value of the assets they hold in the pool.
Balancer’s BAL token acts as a governance token to help the project identify features such as issue rewards and whitelisted pools for liquidity mining.
When users trade, their orders are filled by multiple pools with better pricing and lower slippage.
Balancer ($ BAL) is an automated market maker (AMM) protocol that reduces the cost and slippage between trades of different cryptocurrencies.
Balancer is a decentralized alternative to the traditional market maker, a 3rd party asset that provides liquidity to the traded assets. Balancer protocol can be called by different decentralized trading platforms to automatically find the best rates and transaction prices using Smart Order Routing (SOR). The protocol also provides the necessary funds to complete the trade using funds from existing Balancer Pools. Balancer Financing was started in September 2019 by Mike McDonald and Fernando Martinelli, since then the Company has had a successful seed round with an investment of $ 3 million.
Balancer uses N dimensional invariant surface built on Uniswap dapp. They also use Automated Market Makers (AMM), such as UniSwap, which are made up of computer algorithms to regulate the market.
Balancer shifted itself to a prominent position within the Decentralized Finance (DeFi) hierarchy, as the BAL token caught the rise of the Compound Protocol’s governance tokens at the beginning of 2020. This saw increased interest in the stock market and was allocated as a competitor in the DeFi space. This perception coincides with the increase in popularity and mining qualities of DeFi projects.
BAL Token
Balancer did not have its own native token at its initial launch, but this year the company changed by announcing the management token BAL. The company started distributing the token on June 23, 2020 and will be distributed weekly to liquidity providers on the site.
However, BAL tokens have no economic value, instead they are the currency for governance rights in the protocol. These rights allow owners to have a say over the structure of the Balancer protocol, with its weight in terms of implementing new features, protocol fees, and larger structural changes such as layer 2 scaling, as well as contracts on other blockchains.
There are 100 million tokens created, but 25 million of them have already been allocated to founding members, core developers, consultants and investors. The rest are free to mine by Balancer users who add liquidity.
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