The Balancer developers are preparing the protocol for its new update, V2, which promises to add new functionalities, and improve existing ones, to guarantee maximum efficiency within the DeFi ecosystem.
fernando martinelli, CEO and co-founder of Balancer Labs, published a release to present the new features and improvements that will be part of this new version. Balancer is a protocol designed for decentralized finance (DeFi), which is preparing to evolve to its new version, V2, and integrate new products that reinforce its commitment to security, flexibility, capital efficiency and gas efficiency in the decentralized ecosystem; and thus, take another giant step on its way to becoming the main source of DeFi liquidity.
This decentralized protocol will undergo important changes, according to its co-founder. The main of these changes will be focused on the transition to a single vault, which will contain and manage all the tokens and digital assets added by all the pools that are managed within Balancer. As Martinelli explained, Balancer V2 is going to separate the logic from automated market makers – Automated Market Maker (AMM), the management and accounting of the tokens. Now, the only vault that Balancer will have will carry out the management and accounting of the tokens; while the logic of automated market makers (AMM) is individual for each liquidity pool.
Balancer V2 will give each liquidity pool the freedom to design and implement any custom, arbitrary, permissionless AMM logic. This change will allow Balancer to considerably simplify the protocol, providing greater efficiency and effectiveness.
It may interest you: Value deposited in DeFi exceeds $30 billion, up 58% in January
Gas Efficiency
By implementing a single vault, Balancer presents a solution to the problem of trading with two or more liquidity pools in V1, where users must perform different trading operations and receive tokens from different liquidity pools, which significantly increases trading expenses. Gas. On the other hand, in the new version of Balancer, a single vault allows the protocol to guarantee greater Gas efficiency, since it allows sending and receiving tokens and digital assets from all groups and liquidity pools in the same vault.
Thus, in the new vault, only the final amounts of tokens and digital assets are transferred, significantly reducing Gas costs. Also, since only the final net amounts of tokens and assets are transferred, arbitrage operations are significantly easier and cheaper in this new version of Balancer.
A balance in Gas costs is especially positive for users who engage in trading and arbitrage with tokens and digital assets, since the demand for network use Ethereum is raising Gas costs, and therefore transaction commission rates exponentially, making it difficult to make transactions and interact on the network. As of this publication, commission rates on Ethereum exceed $15 USD per transaction.
Pioneer in customizable AMM logic
The DeFi Balancer protocol pioneers customizable AMM logic by creating a launchpad for teams to innovate with different AMM strategies. In the paper, Martinelli notes that automated market makers will not have to worry about low-level token transfers, balance accounting, or security checks and intelligent order routing. According to the co-founder of Balancer, all of these aspects “come out of the box.”
“We are in the first entry of automated market makers and aim to be the go-to platform for developers, traders and liquidity providers.”
One of the most attractive features of Balancer is its ability to create personalized and private liquidity pools, which each user can adapt to their needs. Thus, users can create their own liquidity pools and define the commission structures and variable pool weights they want.
Oracles and yield farming
Balancer v2 is restructuring blockchain oracles to guarantee token prices within the protocol, thus users will be able to verify two types of prices: the first, a price instant, which will always be up to date but will also be less resistant to manipulation; and a price resilient, which will be less updated, but also more resistant to manipulation.
The oracles that Balancer will add will also be resistant to several of the attacks that DeFi protocols can suffer and will allow decentralized applications to consult prices with minimal Gas costs and without the need to store past data.
Regarding yield farming, the project developers are consulting users and the crypto community about liquidity mining parameters, yield farming, which should be included in Balancer V2. The consultation It is open in the project governance forum, where users can participate to express their ideas, opinions and suggestions.
The protocol's newly revealed functionalities are currently under internal audits, and Balancer V2 is expected to launch in March. At press time, Balancer's BAL token is trading at $34 USD per unit, although it has had a great performance in the last month, with a growth of more than 110% in its value.
Continue reading: Hacker manages to get more than 500 thousand dollars from the DeFi Balancer platform
