Balancer has quickly established itself as one of the top decentralized AMMs and exchanges on Ethereum, but it has yet to establish a presence on other chains. All that could be about to change though.
Although Ethereum is the dominant base layer for DeFi applications, Balancer has been offering grant allocations to layer one protocols to integrate its technology, which the team behind Moonbeam has decided to pursue.
With Polkadot being the likeliest network to take over the DeFi ecosystem, Moonbeam will play a vital role in bridging the network founded by Gavin Wood with what he formerly worked on – Ethereum.
Bringing Balancer to a More Efficient Network
It will be up to the development teams at Moonbeam and Parity to bring Balancer to the Polkadot ecosystem. With the takeoff of decentralized finance, Ethereum’s blocks have quickly filled up, resulting in unsustainable transaction fees for users.
By creating a fully operational cross-chain bridge between the two networks, Moonbeam makes it easier for Ethereum projects to make the transition to Polkadot.
If Moonbeam can successfully merge Balancer’s Solidity code into a Substrate-based application, a feat it has accomplished many times before, it will enhance the narrative of a blockchain ecosystem that relies on cross-chain interactions. This will provide much more interoperability than the traditional manner of wrapping crypto assets on new chains.
The Rise of Balancer
Balancer is one of the biggest DEXs in the space, with its unique capabilities separating it from the rest of the pack. Unlike traditional DEXs and AMMs, Balancer allows users to create liquidity pools with multiple assets with differing deposit ratios. It can currently support up to eight unique assets in a pool, quadrupling the usual two asset 50/50 split that most traditional DEXs offer.
Users are also able to set their own trading fees for pools they create and have the ability to make pool entry public or private, giving a lot more control to the community – something that other platforms do not allow.
Beyond this, Balancer enables users to rebalance their funds, such as index funds for multi-asset portfolios, allowing for greater customization.
On Balancer, projects can also raise funds without having to then migrate to a different DEX, making the token launch process more efficient for all parties. These features have contributed to Balancer’s growth. It is currently the tenth-largest decentralized application with almost $1.4 billion in value locked within the platform.
Balancer Explores New Territory With Moonbeam and Parity Grants
This will not be Balancer’s first foray into inter-chain, but it may end up being the most fruitful, depending on the final outcome. This is not an endorsement of the Polkadot network by Balancer, but it allows other teams to explore how Balancer’s technology can strengthen their ecosystem — an offer Balancer is making to all layer one solutions.
When asked about the possible end result of these developments, Jeremy Musighi, Head of Growth at Balancer Labs, commented, “The Balancer Ecosystem Fund deploys capital to projects that create unique value for the Balancer protocol and community. Supporting PureStake and Parity Technologies is a great opportunity for us to explore and learn from how the Balancer protocol can benefit from the unique trade-offs of the Polkadot blockchain. We welcome the opportunity to support this decentralized effort to take the first steps towards building on-chain liquidity for assets in the Polkadot ecosystem.”