Balancer is a DeFi exchange created on the basis of the open-source Balancer Protocol. The facility using the DAO governance system was launched by Balancer Labs in 2020. This is an automated market maker (AMM) that makes use of a price sensor and a self-balancing weighted portfolio to make the system flexible. The innovative vault architecture developed by the Balancer team improves the security of the structure thanks to the isolated internal balancers.
The core of the system is an index fund mechanism, which makes the facility more than just an exchange. The developers apply the innovative AMM logic that enables an individual, customized approach to each pool depending on the goals set. The Balancer 2 protocol has also introduced a scheme that eliminates inefficiency in trading and helps to save resources.
The platform is supported by its native cryptocurrency BAL, which is a governance and utility token used for voting. The asset gives voting rights to the members of the ecosystem thus helping to empower the system. Also, it improves the resiliency and competitiveness of the company on the market. The same goal is achieved thanks to cooperation with Polygon that strengthens the facility. Balancer has already integrated with several top decentralized platforms such as 1inch, Aave, Curve, SushiSwap, and many other less known DeFi solutions. At the time of writing, the number of such joint projects exceeds 350 which has considerably increased the TVL (total value locked) of the system.
The benefits of the Balancer and Polygon integration
The expansion of the Balancer Protocol to layer 2 solution makes the project more widespread and popular. The joint activity of Polygon and Balancer Labs brings more liquidity to the DeFi industry. It also helps to reduce the size of fees in the decentralized sector thus making it more alluring for users. It is worth mentioning that high fees are a huge problem preventing the development of the DeFi industry. The integration of Balancer and Polygon brings fees close to zero, thus helping to remove this obstacle and make the DeFi services accessible for all customers.
The on-chain activity of the te Polygon ecosystem significantly increased in 2021 thus reflecting its expansion. As a result, the price of its token MATIC went up following a number of integrations and decentralized projects launched on its basis. In fact, the project has never stopped growing ever since it went live in 2019. It has always looked attractive to the market participants looking for the scaling solution in situation where Ethereum fees are too high. With the growth of ETH gas fees, the popularity of Polygon skyrocketed.
The history of Polygon development
Polygon is often referred to as the “Internet of blockchains”. Known as Matic Network in the past, it was rebranded in February 2021. Trying to integrate diverse scaling solutions Polygon employs innovative technologies in its work such as Optimistic Rollups, Plasma, and ZK-rollups. Apart from layer2 options, it uses sidechains with different consensus mechanisms.
The innovative technologies employed by the platform have helped to attain instantaneous transactions at low fees. Though the ecosystem is still comparatively young, it can compete with industry leaders such as Ethereum or Binance Smart Chain in daily volume of transactions. Truly negligible fees have contributed to immense growth of the platform’s user base while various integrations and partnerships have increased its popularity even more.
Polygon successfully cooperates with Ethereum-based or BSC-based projects adding value to these blockchains and the decentralized industry as a whole. To popularize the DeFi industry, Polygon has established a 150 million USD fund that is known as #DeFiforAll Fund. The fund makes the benefits of DeFi, decentralized lending, and farming accessible to a larger customer base.
Why Polygon is ideal for integration
The Polygon project is a scaling solution that delivers DeFi tools to the Layer 1 base chain at a very low cost. The migration of users’ funds from Ethereum and other blockchains is fulfilled via a bridge. The benefits of using Polygon infrastructure have been highly assessed by some of the most influential participants of the decentralized industry.
The Polygon platform has received great popularity among cryptocurrency enthusiasts after integrating with several famous protocols. For instance, Curve was launched on Polygon in April 2021, almost simultaneously with the release of Aave. After that, Sushiswap followed the pattern.
Collaborations of this kind increase the potential of both sides. Among numerous projects working over the reduction of Ethereum fees, Polygon has manged to offer the most elegant solution. Therefore, the Balancer team has decided to employ it to attain the goal. Balancer offers the liquidity pools in the same way as Curve, enabling easy swapping for DeFi traders. The platform stands apart from others as users can select among the pools with numerous assets. Since many AMM platforms offer pools with just a small handful of assets, the offer looks more alluring.
The details of integration
Balancer was launched on Polygon in July 2021. As mentioned above, Polygon has already worked with other popular Ethereum-based decentralized platforms prior integrating with Polygon. In the effort to support the project and attract customers, both platforms launched a joint liquidity mining program worth 10 million USD.
Fernando Martinelli, CEO and co-founder of Balancer Labs, commented on the choice of Polygon for Balancer saying that this is one of the most favorite Layer 2 options for Ethereum, therefore platforms eagerly select it. The company is pleased with the amount of traction received by Polygon as well as the transaction experience that it provides. The Balancer project has become more stable thanks to Polygon and its functionality. The other party is also absolutely satisfied with the result as the co-founder of the Polygon platform Sandeep Nailwal has expressed his excitement about the update.
Balancer on Polygon tries to incentivize users to participate in the Balancer’s Polygon pools. The distribution of 25,000 BAL, 375,000 MATIC, and 30,000 QI across the pools is performed on a weekly basis.