What is Balancer?

Guest post originally published on Bankless by Fernando, co-founder Balancer Labs & Nodar, co-founder Zapper

Balancer is an AMM protocol that allows anyone to provide liquidity to existing Balancer pools or create one themselves. Each Balancer pool is composed of 2 to 8 tokens. Each of the tokens makes up a percentage of the total pool value: these are the token weights that are chosen at the moment of pool creation. The mathematical properties of Balancer protocol ensure that the value percentage of each token in a pool will stick closely to the weight even as the market prices of the tokens themselves vary. 

A Balancer Pool is a self-balancing index fund

This means that each Balancer pool is a self-balancing index fund itself. But it gets better. In a conventional index fund the investor has to pay a fee for the rebalancing service, but in a Balancer pool the liquidity provider is actually rewarded for their service of providing liquidity to the protocol. They earn fees while their index funds are continuously rebalanced for them. 

Extra incentives

On Monday, June 1st at 00:00 UTC (i.e. at midnight from Sunday to Monday), Balancer Labs will start considering liquidity held on Balancer protocol for the distribution of governance tokens. So on top of earning fees, liquidity providers will be rewarded with BAL tokens. To participate just add liquidity to any Balancer pool.

How to add liquidity to Balancer Pools via Zapper.Fi

STEP 1: Visit Zapper.Fi & connect with your wallet.

STEP 2: Click ‘Invest’ & view available liquidity pools. You could type in Balancer to display only those liquidity pools.

STEP 3: Choose which Balancer pool you would like to join & enter how much liquidity you would like to add.

STEP 4: Confirm the transaction & you will receive Balancer Pool Tokens which are ERC20 tokens that track your liquidity provided to the protocol. Here’s a sample transaction adding 1 ETH to the WETH/DAI/USDC pool with Authereum wallet:

Once your transaction is confirmed you will be able to view a detailed breakdown of all your liquidity provided on Balancer’s Explore page: https://www.zapper.fi/balancer

Coming soon…

• Removing liquidity from Balancer Pools.

• Re-balancing liquidity between Balancer<>Uniswap<>Curve Pools.

What else would you like to see? Let us know on Discord.

Add Liquidity to Balancer Pools

⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️ ⚡️

*Please note that Zapper.fi is an experimental project. Zapper.fi is not providing any investment advisory or recommendation service. By using Zapper.fi or its services, you agree that you are using the Services at your own risk and that you will not and do not hold Zapper.fi or its team members liable should the services not perform as per your expectation. Zapper.fi is not a licensed financial advisor under any law. Please consult your own independent investment advisor before making any investment decisions.