The Liquidity Provision Game Deepens with Balancer Aave v3 Boosted Pools

https://medium.com/balancer-protocol/the-liquidity-provision-game-deepens-with-balancer-aave-v3-boosted-pools-c2a47a21cfff

v3 Boosted Pools are now live for integrations

Balancer has launched new Boosted Pools bbaUSD and wstETH/bb-a-weth on Aave v3. Aave is a key partner, and we plan to make Aave v3 Boosted Pools an important building block on the network. As the transition to v3 progresses, Balancer Boosted Pools aim to increase capital efficiency for liquidity providers.

The original bbaUSD on Aave v2 has proven to be one of our most popular and successful pools, regularly seeing above 100% utilization.

https://medium.com/media/662f56236de2002cab148f194b9d52e1/href

“The relationship between Balancer and Aave continues to strengthen over time. We’ve seen substantial success from the previous bb-a-USD pools, and we’re excited to continue the synergy of our teams with Aave v3. This next level of Boosted Pools aims to provide deeper liquidity with pool composability and higher yields.” — Fernando Martinelli, Balancer Labs CEO & Co-Founder

ICYMI: Boosted Pools

https://medium.com/media/c728fa332a57bb44ddee8a82814e56e1/href

Launched in 2021, Boosted Pools achieve high capital efficiency by storing the majority of their liquidity on external protocols as yield-bearing versions of common tokens. This gives users not only deep liquidity in all pool tokens, but also great flexibility: both in swapping between the common and yield-bearing assets and in moving funds between composable layers or even different Boosted Pools.

Alongside the advantages of high capital efficiency and superfluid, consolidated liquidity, Boosted Pools are geared towards several types of users.

  • Swappers — Enable deep liquidity → good swap prices
  • Liquidity Providers — Deeper liquidity and increased yield
  • Pool Creators — Swap fees and liquidity mining incentives
  • Aggregators — Simplifies the paths for multi-pool operations (can keep everything within Balancer)

Regarding Automated Market Makers (AMMs), only a small percentage of liquidity deposited into a liquidity pool is used to facilitate trades. Most of the time, the daily volume of trade activity is much smaller than the net sum of the pool’s available liquidity. That deep liquidity contributes to low price impact trading and efficient markets, but most of those funds are just sitting there, doing nothing. Boosted Pools monetize those idle resources on other protocols.

A full breakdown of Balancer Boosted Pools can be found here.

“Given the past success of Balancer boosted pools on Aave V2, it was a natural next step to envision this capability on Aave V3. As a result of this integration, deposits of stablecoins into Balancer Aave boosted pool will bring additional yield to balancer LPs, including boosting the pool liquidity.” — Stani Kulechov, Aave CEO & Founder

Functionally, the v3 pools act the same as all Boosted Pools, boosting efficiency and composability for LP positions via routing liquidity to other parties. Most of the assets in the pool will be deposited to Aave v3 to earn extra yield, while a small number of assets remain in the pool to facilitate trading. The pool then rebalances between wrapped Aave v3 tokens and unwrapped stables using an asset manager rebalancer.

Closing Thoughts

Aave and Balancer have solid reputations for safety and place high importance on security audits. Balancer is still the only DEX offering Boosted Pools technology or similar mechanisms. As Aave prepares for the coming GHO launch, Balancer is gearing up for a GHO/bbaUSD pool, reinforcing the synergistic relationship between the projects as it supports GHO liquidity, builds Aave v3 TVL, and facilitates trading activity.

Website | TwitterDiscord

This article is for informational and educational purposes only. It should not be construed as investment or trading advice or a solicitation or recommendation to buy, sell, or hold any digital assets. Transactions on the blockchain are speculative. Carefully consider and accept all risks before taking action.


The Liquidity Provision Game Deepens with Balancer Aave v3 Boosted Pools was originally published in Balancer Protocol on Medium, where people are continuing the conversation by highlighting and responding to this story.

Cron Takes TWAMM to Mainnet

https://medium.com/balancer-protocol/cron-takes-twamm-to-mainnet-dd63e41c5eed

Balancer Grants recipient Cron Finance launches on Mainnet, adding to the thriving ecosystem of diverse teams building on Balancer Protocol.

We’re excited to announce that Balancer Grantee Cron Finance, the team building out a Time-Weighted Average Market Maker (TWAMM) functionality using Balancer custom pools, has launched on Mainnet. The success of Balancer comes not only from the Balancer Community but from the projects building on top of it. Since its inception, ​​Cron has laid the groundwork for deploying the most user-friendly and capital-efficient TWAMM solution.

Why Cron Finance

Cron Finance is building advanced trade execution algorithms to execute large swaps on-chain. On-chain trade execution algorithms in Ethereum are limited because of various factors such as contract space, gas costs, and algorithmic complexity. Large swaps cannot be executed on-chain because of slippage and MEV attacks that diminish returns. Advancements in trade routing and concentrated liquidity have only partially addressed this issue.

TWAMM Enters the Scene

Time-weighted automated market makers (TWAMM) are a special class of AMMs that execute orders over multiple blocks. They’re an ideal on-chain solution for large and time-insensitive trades such as peg maintenance, liquidations, treasury diversification, index funds rebalancing, etc.

Learn more: https://www.youtube.com/watch?v=RkgYAms_Q10

How Do TWAMMs Work?

TWAMM automates the execution of large orders by breaking the order into smaller virtual orders. Arbitrageurs pay gas fees to write virtual orders on-chain when they correct asset prices as they deviate. Liquidity providers earn swap fees plus MEV kickbacks, and the entire trade lifecycle stays on-chain.

Unlike atomic (one block) trades happening on AMMs today, trades on TWAMM aim to be particularly advantageous to long-term investors such as DAOs, protocols, liquid funds, etc., and retail traders who are interested in utilizing DCA to gradually enter/exit positions.

TWAMM provides a unique opportunity to explore MEV protection because most short-term traders are arbitrageurs, and a big chunk of long-term trades are uninformed flow. This enables the team to better align incentives between traders, arbitrageurs, and liquidity providers.

Lower Slippage for Traders: Long-term traders care about good price fills, i.e., low slippage, and are time-insensitive so that the trade can be spread across multiple blocks. Instead of paying gas for executing sub-orders, TWAMM automates the trade & transfers the gas costs for correcting asset prices to arbitrageurs.

First Right for Arbitrageurs: Instead of grim triggering (paying miners most of the profit), select arbitrageurs get a lower swap fee to correct asset prices and, in turn, earn a return. Instead of paying the profits to miners for transaction priority, the searchers share MEV profits with liquidity providers.

Higher Profits for Passive LPs: Finally, LPs actively benefit from the MEV captured in this new model. Unlike the old model, where LPs received a standard swap fee regardless of the amount of MEV extracted, LPs receive a chunk of the extracted MEV in addition to a lower base swap fee.

Why Balancer?

The design space of the Balancer Vault is infinite. Balancer Protocol offers limitless capability for projects looking to build a novel AMM and tap into the primary source for programmable liquidity. If a project wants to design a new invariant, it can do so by focusing on the math while retaining the security and asset management functionality of the Vault.

“We’re a small team and wanted to use existing AMM technology to build and launch TWAMMs without worrying about launching a token, sourcing initial liquidity, etc. Balancer’s greatest strength is the ability for teams to build custom AMMs on top of the novel Vault architecture. Additionally, the lindy effects of building on a battle tested AMM, gas optimization features, extensibility, and network effects of other protocols building on top of Balancer sealed the case for us to leverage Balancer’s platform to launch our protocol.” — 0x70626a, Cron Finance Co-Founder

Balancer Grants Program

The BAL Grant program is one way Balancer DAO promotes the development of the Balancer Protocol and Ecosystem.

The BAL Grant program provides support and funding ($1K — $100K) to projects committed to supporting Balancer Protocol in achieving its mission to become the number one source for Decentralized exchange trades. This program is a good fit for individuals and groups that want to run a project that builds technology or resources on the Balancer Protocol.

Closing Thoughts

Cron Finance’s Mainnet launch is a beacon of this statement and adds to the thriving ecosystem of diverse teams building on Balancer, focusing on different problems, and addressing different markets.

What’s Next?

If you are interested in supporting the development of the Balancer Ecosystem or want to build on top of the Balancer Protocol, this is your chance! Get started by filling in the Grants Application form.

Website | TwitterDiscord

This article is for informational and educational purposes only. It should not be construed as investment or trading advice or a solicitation or recommendation to buy, sell, or hold any digital assets. Transactions on the blockchain are speculative. Carefully consider and accept all risks before taking action.


Cron Takes TWAMM to Mainnet was originally published in Balancer Protocol on Medium, where people are continuing the conversation by highlighting and responding to this story.

Unlocking the Power of Balancer on Gnosis Chain

https://medium.com/balancer-protocol/unlocking-the-power-of-balancer-on-gnosis-chain-92aa6aaeeb0b

We are excited to announce Balancer has arrived on Gnosis Chain. karpatkey and Balancer are working together to bring Balancer’s innovation to one of the original Ethereum sidechains with untapped potential. Backed by Gnosis DAO, a large LP on Balancer and significant holder of BAL & AURA, this expansion to Gnosis cements Balancer’s technology on a promising chain.

Gnosis is a very promising and OG chain. Deploying there is an exciting next step for our ecosystem and further strengthens the ties between Gnosis and Balancer. Working alongside Karpatkey, our communities can more effectively collaborate and help shape the future of DeFi liquidity on L2s.

— Fernando Martinelli, Balancer Labs CEO & Co-Founder

Balancer has revolutionized the DeFi landscape by providing access to secure infrastructure for liquidity applications. karpatkey, a well-known crypto treasury development team, has leveraged Balancer’s algorithmic rebalancing, customizability, and Boosted Pools functionality, making it a powerful tool for managing assets in the rapidly growing DeFi ecosystem. Let’s explore further how Balancer’s technology has empowered karpatkey to grow treasuries effectively on Ethereum, and soon on Gnosis Chain.

I’m excited to see Balancer deploy on Gnosis Chain and I think the ecosystem there has a bright future ahead. This will be a great showcase for how Balancer technology like Boosted Pools can be used to supercharge growth. Gnosis DAO and Karpatkey are important long term partners for Balancer — this deployment marks the latest milestone in our journey together.

— Solarcurve, Balancer Maxi

Balancer Boosted Pools has Entered the Chat

Adding Balancer’s technology to Gnosis Chain will spur growth in the burgeoning ecosystem. karpatkey and Balancer are working jointly to bring Balancer’s innovation to Gnosis Chain, including Boosted Pools through Gnosis Chain lending platform Agave. Key assets are going to be prioritized first, including GNO, WETH, WBTC, xDAI, and USDC, in order to have the Gnosis DeFi ecosystem thrive.

Users will need to bridge funds to Gnosis Chain and then deposit/withdraw/trade as usual on the Balancer UI.

Incentives for the following Pools will start in a few weeks:

◽ Agave Boosted USD (DAI/USDC/USDT)
◽ Agave Boosted Tricrypto (weth/wbtc/stable)
◽ Agave Boosted GNO/WETH
◽ Agave Boosted GNO/stable

Balancer, karpartkey and Gnosis Chain: A Trio

Balancer’s Customizability & Performance

The karpatkey team benefits from Balancer’s technology, providing increased flexibility in creating custom pools of up to 8 different assets with various weightings. Balancer’s superior performance compared to standard liquidity pools includes lower slippage, better pricing for trades, and the ability to route trades across multiple pools to find the best price and reduce costs

Balancer’s Risk Management & Time-Saving Features

karpatkey values Balancer’s risk management capabilities, including the automatic rebalancing of pools to maintain desired asset weightings and reduce risk. The customizable weightings of Balancer Pools can also result in lower price fluctuations compared to other liquidity pools. This is particularly useful for treasury management as it can help reduce the impact of price fluctuations on the pool’s assets and the impact of impermanent loss. Additionally, Balancer’s automatic rebalancing and customizable weightings help to save time, reducing the need for frequent adjustments and constant monitoring. Karpatkey is aware of the potential costs associated with using Balancer, such as higher gas fees or potential impermanent loss if the asset weightings are not set up correctly. Once the contracts are deployed on Gnosis Chain, gas costs will be minimal, eliminating those incurred costs.

Balancer’s Composability and Ecosystem

Through different integrations, Balancer enriches its value proposition for DeFi users. One of those integrations is Balancer “Boosted Pools’, which are pools that hold interest accruing tokens from lending platforms. These pools improve capital efficiency and generate extra yield for the liquidity providers and Balancer DAO. Part of this yield is then utilized as incentives to drive gauge emissions to these pools. One of those pools that karpatkey leverages to generate value is Balancer’s Boosted Aave USD Pool (DAI/USDC/USDT), which currently has an APR range of 2.2% to 4.8%, surpassing other stable-coin protocols that generate between 0.1% — 1.9%.

Another great example of composability in Balancer’s ecosystem is Aura Finance. Through Aura’s social aggregation of voting and economic power, karpatkey is also able to increase generated yield on key Balancer pools. The platform also enables karpatkey to participate in Balancer’s governance and gauge voting, efficiently allocating voting power.

Closing Thoughts

The strategic decision to deploy on Gnosis Chain introduces Balancer’s tech to a burgeoning ecosystem to ensure DeFi liquidity provision with the scope for sustainable, scalable, innovative growth that is highly competitive in the industry. By collaborating with karpatkey, our communities can work together to shape the future of liquidity for DeFi. The innovation that Gnosis Chain brings to the table in terms of scalability, speed, and capital efficiency will foster the perfect environment needed for our Protocol to flourish.

Connect with Balancer : Website | TwitterDiscord

Connect with Gnosis Chain: Website | TwitterDiscord

Connect with karpatkey: WebsiteTwitter


Unlocking the Power of Balancer on Gnosis Chain was originally published in Balancer Protocol on Medium, where people are continuing the conversation by highlighting and responding to this story.

Introducing Balancer’s 80/20BPT Launchpad

https://medium.com/balancer-protocol/introducing-balancers-80-20bpt-launchpad-f5e4ffdb3511

Diving into [BIP-146] and incentivizing 8020 BPT Staking (ve8020)

One of the main differences between Balancer’s veTokenomics and the initial model proposed by Curve is that in the Balancer model, BAL/WETH 80/20 BPT is locked instead of only BAL. Locking BAL itself would take the token out of circulation while locking the BPT of an 80/20 pool does the opposite. The BAL tokens remain in the pool, and the locking allows the creation of onchain liquidity. Moreover, liquidity creation happens without spending costly emissions on BAL liquidity incentives.

With the unanimous approval of BIP146, any protocol can get support to leverage this same infrastructure for its governance token.

Program Outline

This program is intended to support all systems which involve the locking of 80/20 BPT. ve80/20 is one such system, and it’s a convenient shorthand to use, but this program is not limited only to vote-escrowed systems.

When assessing projects for eligibility, the Balancer governance will consider the following criteria:

  • Project track record — has it been around awhile, is it likely to exist going forward, does it have an active community/user base, etc.
  • Circulating market cap and trading activity — is there a reasonable likelihood for this ve80/20 to contribute significant protocol revenue for Balancer?
  • BAL incentives should go to ve80/20 lockers only, and the lock should have a minimum duration of 16 weeks.

The program consists of 3 milestones. The milestones are given in relation to the value of BAL to future-proof this program against changes in market conditions.

The initial criterion is that the project is enabled to join the program by the Balancer governance.

Upon a successful Balancer governance vote, the project would immediately be eligible for a grant of 25k BAL. If all milestones are met, the cumulative grant is 250,000 BAL.

Please note that only TVL and revenue from locked liquidity will be counted toward the milestones.

Milestones:

25k BAL

  • TVL exceeds the value of 25k BAL by 30x
  • Lifetime total revenue earned exceeds ⅓ the value of 25k BAL

50K BAL

  • TVL exceeds the value of 50k BAL by 30x
  • Lifetime total revenue earned exceeds the value of 50k BAL

50k BAL

  • TVL exceeds the value of 50k BAL by 100x
  • Lifetime total revenue earned exceeds the value of 50k BAL by 4x

100k BAL

  • TVL exceeds the value of 100k BAL by 200x
  • Lifetime total revenue earned exceeds the value of 100k BAL by 4x

If your project is looking to apply for the launchpad, complete the following form to get in touch with our team.

Website | TwitterDiscord

This article is for informational and educational purposes only. It should not be construed as investment or trading advice or a solicitation or recommendation to buy, sell, or hold any digital assets. Transactions on the blockchain are speculative. Carefully consider and accept all risks before taking action.


Introducing Balancer’s 80/20BPT Launchpad was originally published in Balancer Protocol on Medium, where people are continuing the conversation by highlighting and responding to this story.