In any market, whatever it may be, management is a key aspect for the success of any investor. Without efficient management, any asset portfolio can become a problem in just a blink of an eye.
Balancer is a platform that aims to help users with automated portfolio management and increasing liquidity within the ecosystem.
HOW DOES IT WORK:
Balancer works as an asset management platform, acting as an automated portfolio manager, as well as a liquidity provider and price sensor. The platform is open-source and 100% audited by Trail of Bits.
It has a new approach when it comes to liquidity, allowing users to participate and maintain their portfolios without forcing positions, as we know these positions may mean a breakdown dead ahead.
As the importance of liquidity becomes bigger every day, a protocol like Balance will help users by offering this new business model when it comes to cryptocurrency assets.
Other platforms, like UniSwap for example, have their own game rules where users must deposit 50/50 on ETH and their desire assets, respectively. Here, users are completely free to deposit any amount they want on whatever asset supported by the platform.
The project is defined by the team behind the idea as “an automated market maker with certain key properties that cause it to function as a self-balancing weighted portfolio and price sensor”.
OTHER INTERESTING FEATURES:
Balancer allows users to adjust allocation to fit their own needs. It means they can add liquidity without being exposed to ETH prices if they are not comfortable with that.
It brought a great impact for DeFi users who like to earn passive income on assets based on Ethereum, while they still earn returns with the underlying assets.
Users also can earn interest off fees generated within Balance Exchange processes.
A unique aspect of Balancer is that a user can have a high return on a typically “low demand” asset. This happens thanks to arbitrage opportunities or desire to mitigate slippage.
IMPORTANT FACTS TO KNOW ABOUT:
Balancer has a system (can be seen by some as a type of work ethic) held with some key factors that allow the platform to perform as its best.
First is that it incentivizes users to provide liquidity to balancer pools, collecting tradings fees from different portfolio rebalances, and from arbitrage opportunities.
The platform has pools that support a few different assets, which are all measured by percentage and rebalanced, using straight and efficient automated processes.
Another essential fact is that Balancer has its ow native exchange, using smart order routing to mitigate price slippage across trading pairs, which also helps the ecosystem.
WHERE DO I SIGN TO HAVE ACCESS?
The platform is remarkably user-friendly, as users can test by themselves visiting balancer.finance and taking a few scrolls around the layout.
To start exchanging assets, users must connect to a web3 wallet and begin the “trade magic”.
Automated portfolio management is also another essential feature we can highlight.
WHATS IS THE GENERAL IMPACT OF THE PLATFORM?
Balancer permits that any user who holds tokens to provide liquidity with all his assets, doing it by turning his whole portfolio into a Balancer pool or just adding it to the existing pools.
It is allowed pools with even up to eight tokens. Within this platform, anyone can create his self-balancing index fund or invest in someone else’s.
WHO IS BEHIND THE IDEA?
Balancer was co-founded by Mike McDonald and Fernando Martinelli, who announced the project to the world in late 2019.
The project was incubated by BlockScience, a well-known engineering company, before becoming as it is known today.
In early 2020, the team decided to hold a seed round, which ended up raising $3 million. A good amount of this value came from well-known investors amid the crypto scene, such as PlaceHolder and Accomplice.
A new and highly valuable tool for DeFi investors who wants a well-designed and efficient platform for asset management, Balancer made justice to its name (being a true balance), despite being a relatively new project amid this incredibly competitive market.
The platform offers asset management, being an efficient automated portfolio manager, and acting as a liquidity provider and price sensor. These days, people are looking for automation as never before, especially when it comes to blockchain.
Balancer also has a strong work ethic based on the blockchain “free market” philosophy. Here users have total freedom to deposit any amount they want on whatever supported asset within the platform.