Author: TokenPocket team
Balancer is an n-dimensional AMM (automated market-maker) built on Ethereum. It allows anyone to create or add liquidity to customizable pools and earn trading fees. Instead of the traditional constant product AMM model, Balancer’s formula is a generalization that allows any number of tokens in any weights or trading fees, which is believed to have brought great advantage to Balancer.
Another way to view Balancer is as an inverse ETF (Exchange Traded Fund): instead of paying fees to portfolio managers to rebalance your portfolio, you collect fees from traders, who continuously rebalance your portfolio by following arbitrage opportunities.
Based on Constant Product Algorithm, Automated market makers requires high liquidity to achieve low slippage trading for users, which is regarded as a natural shortcoming comparing to the Order Book mechanism.
How to Use Balancer in TokenPocket
Search [Banlancer] on the Discover page or find it in the [DeFi] list. The Balancer has a simple interface yet strong functionality, which is a good thing for newbies.
Select the token and amount you want to sell and buy (We use ETH and BAL here respectively for demonstration). By tapping on the exchange rate (1ETH=26.2114BAL), you can see the Balancer Pools used to optimize your order.
Notes: that Ethereum is a bit congested recently and requires a higher Gas fee to verify the transaction.
You can see the full available tokens by tapping the default token logo in [Token to sell] and [Token to Buy] button.