Balancer - Why is it popular among traders?

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Balancer (BAL) is an Ethereum token that powers the Balancer protocol, an automated market maker that lets anyone create or add liquidity to trading.

The application of Balancer was launched in the year 2020 and the development of the platform started in the year 2018. Within a few times of its establishment, it gained so much popularity that it has become one of the most used decentralized exchanges. We can say this based on the trade volume and the locked value along with many other features. 

This is also a decentralized application set up on the Ethereum platform that offers an alternative and better exchange to the users in place of other centralized applications. It permits the users to trade with Ether, ERC-20 in an environment where there is no need to take permissions and safety standards are low compared to centralized exchanges.

Why use Balancer?

There are over 17,500 liquidity providers and collectively these liquidity providers have made more than $70 million of collecting fees. Users prefer to use this because it offers many advantages such as:

  • Reduction in Gas Fees.

  • Enhancement of Capital Efficiency.

  • Customized AMMs is available.

  • Freedom of control and creation of their own asset pool.

  • The only platform that rewards its customers for using the application. 

  • Pools also receive fees if they are being rebalanced by the trader at the time of making a swap. 

  • If the pool has a large number of tokens in a good volume, then it also increases the chance to earn trading fees. 

  • It supports many types of assets hence, a user can keep 8 different types of assets in the pool.

  • Decreases the chances of transaction slippage for traders because the transactions here are not need to be routed via Ether.

Balancer serves both the parties including Liquidity Providers and Traders. On this platform the users can swap their asset or offer liquidity to anyone without involving any intermediary. 

Products of Balancer

To give users the best trading experience it has introduced 5 new products for the users which are named as follows:

  • Vault

It is the primary component of Vault, the function of it is to store and manage all the assets kept in the balance pool. It also acts as a getaway that executes the transaction that are been made using this platform.

  • Balancer Pools

Its function is to determine how a trader will trade on the platform. It allows the function of creating own pool which gives them the option of flexible pricing.

  • Merkle Orchard

It facilitates the claiming of tokens from any contract, it also helps in saving of gas fees. 

  • Smart Router Order

Helps the platform in discovering the best suitable price. It looks for the best set of trades as per the input of the users.

  • Balancer Gnosis Protocol (BGP)

To make sure the traders trading always gets the best price for their trade BGP uses decentralized exchanges. Because it groups all the gasless transaction together, so in case of unsuccessful transaction there will no loss of gas fee.

Conclusion

This platform might get confusing for the beginners. But if you are an intermediate or a professional trader then you should give this platform a try. In case you face any issue then their consumer support services are also available. We hope that our blog has answered all of the basic questions you might have for this exchange called Balancer.  

 

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