- Balancer is adding a third liquidity pool to its ecosystem.
- The new pool is a stable pool for similarly priced assets.
- Also, Balancer is the first DeFi AMM to have three liquidity pools.
To clarify, the Element protocol deployed on to Ethereum following a successful testnet launch. In addition, the protocol will initially undergo a 3-month crvLUSD term. After this, Balancer will add new assets depending on liquidity and demand.
On the other hand, stable pools bear many benefits for both traders and liquidity providers. This is because the pool only includes assets traded at a similar price. As such, the pool vastly increases capital efficiency for like-kind swaps, for example.
Also, traders can enjoy tighter spreads and lower slippage. At the same time, liquidity providers can earn a competitive yield with very brief losses.
Notable, the addition of stable pools makes Balancer the first automated market maker (AMM) with three different pool types. The two other Balancer pools types are weighted pools and Element pools. As such, the stable pool launch is both exciting and innovative.
The key benefit from the wider pool variety is that traders can integrate trades to include more than one pool. Also, the move will only lead to a small increase in gas fees. In fact, it is cheaper for traders to use this method compared to using trade routes through Curve and Uniswap, for instance.
Also, the stable pool will leverage Balance v2’s vault architecture through batch swaps and internal balances. As such, the protocol benefits for traders will increase as Balancer adds liquidity assets. As a result, this will lead to more competitive trading opportunities.