The Balancer Report: Protocols, UIs and why the difference between the two matters
When people think about protocols they often imagine protocol UIs. While this is a common perception of protocol interactions for most users, it’s an oversimplification.
Protocols and UIs are not the same thing. They need each other and yet they can also function perfectly fine on their own. The separation of the two allows protocols to up their decentralization game as well as create dedicated purpose-built UIs for a variety of use cases and user segments.
We are continuing to explore the Balancer ecosystem and its place in the wider DeFi landscape. This week we are taking a closer look at how the relationship between protocols and UIs shapes the concept of decentralization.
To understand this better, let’s define both concepts. A UI, or User Interface, can be broadly defined as “the space where a human interacts with a technology or digital product…”. Note how even this essential non crypto-specific definition separates the product and the interaction point. This distinction is critical for understanding how DeFi interfaces work.
Consider Balancer’s main UI:
Here’s how it simplifies protocol interactions: the UI lets people interact with a variety of pools through a single page. It also makes it possible to switch between the supported chains through a dedicated element. The UI represents the protocol as a whole, with each pool deployment having a dedicated page with additional details and analytics.
This creates a feeling of completeness and a sense of unity which is important for ensuring user comprehension regarding what the UI can do and what their interactions mean.
If a user were to interact with the protocol without the UI, their experience would be drastically different. Direct interactions with smart contracts, rather than pools listed in the UI, and manual chain switching would make the process less straightforward, leading to a more fragmented experience based on single smart contract interactions rather than a comprehensive overview of available pools.
This brings us to what a protocol is. The exact definition varies, but often revolves around the notion of a rule set governing the relationship between parts of a decentralized whole. Notice the absence of user-protocol interactions in this definition, highlighting that protocols operate at a fundamental level, independent of user interfaces.
The key takeaways are twofold: a) the UI and the protocol are not synonymous; b) while protocols can be accessed through multiple UIs, their functionality isn’t contingent on having a UI at all. The more UIs a protocol has, the more decentralization there is since users don’t have to rely on any single one for their protocol interactions.
Understanding the complex nature of the relationship between protocols and UIs helps grasp the benefits that decentralization brings. Protocols form the backbone of DeFi, setting the foundational rules and processes, while UIs serve as the accessible front-end that helps people navigate the space.
Now let us move on to the latest ecosystem news, of which there are plenty:
Balancer DAO is ready to supercharge its Arbitrum growth through the STIP incentives.
The latest incentive program expands the original LGP and will double the amount of ARB directed towards pools. In practical terms this means that Balancer’s Arbitrum pools will receive 171,000 ARB every week throughout the end of January 2024. Ecosystem protocols are welcome to participate by establishing gauges (subject to DAO approvals) and placing incentives through any veBAL voting market.
Balancer Grants shares their latest monthly update.
The program is now in its tenth wave with the following stats:
- 12 existing grantees
- 35.000 BAL to be distributed to new applicants
The newly allocated funds will go towards supporting tooling, educational resources, new protocols building on Balancer and other high-impact activities.
Balancer Grants will also present its 2024 outlook and revised grant assessment criteria.
Fjord V2 is going live on November 24, marking a new era for the protocol.
One of V2’s main goals is to “…craft a platform where innovative projects and engaged communities converge in more meaningful and unique ways”. The update includes a revamped UI and an assortment of new features which will see a gradual rollout. The first batch of V2 updates goes live later this week and includes token vesting, buy-only LBPs, and zero-collateral LBPs.
Butter Finance has been canceled.
The protocol’s contributors announced the cancellation through X, stressing that the decision had not been taken lightly. However difficult, it shows the ecosystem’s growing maturity and illustrates Butter’s contributors’ ability to operate responsibly.
The latest Ethereum Staking Update is live. The ratio of staked ETH continues to show stable growth while Balancer remains a pillar of LST liquidity on all major chains including Ethereum and the leading L2s such as Optimism and Arbitrum.
As always, HiddenHand incentives can be explored here, the current round ends on November 23, 2023.
Balancer: TVL and Stats — Defilytica
Balancer’s Total TVL across all networks is sitting at $766m.
The Total Mainnet TVL is $448,8m with a dominance of 61,5%.
Speaking of protocol volume metrics, in this last week we were able to see a cumulative volume of $223,34m.
As for protocol fee metrics, we can verify cumulative fees of $176,63k.
This section will list the top three expected pools to receive most of the next period’s emissions. Voting is open for four more days, and the next period is scheduled to start on Thursday at 00:00 am UTC.
- Polygon — 20WETH-80BAL / tetuBAL — currently at 14.78%
- Mainnet — rETH / WETH — currently at 6.81%
- Arbitrum — GOLD / wstETH / USDC — currently at 5.93%.
You can find an overview of the current LM incentives on the Balancer Mainnet below:
This voting round is ending with 7 new Snapshot votes including the following:
- [BIP-486] Update zkEVM Composable v5 permissions
- [BIP-487] Balancer <> Across Add more BAL to LP
Stay tuned for this week’s Governance Recap and Gauge Update to learn about the results.
And as usual, this week Dubstard shares another set of security tips that will help you stay safe:
- Do not open any links sent to you in DMs from any one pretending to be a “mod”, “admin” “staff member” and etc.
- Do not message anybody offering help if you DMs them first, those are scammers.
- Remember, Balancer operates primarily under the following domain: https://balancer.fi/
- Never share private keys, seed phases with anyone.
- Remember, there is NO AIRDROP!
- There is no compensatory $BAL distribution and any website or user promising otherwise is trying to scam you.
- There is an ongoing scam campaign in several servers consisting of bots and fake accounts entering high-profile web3 servers to spread FUD and direct users to fake revoke.cash links. Mostly are being blocked by security countermeasures and blocked interactions on Metamask etc., but more bots are bound to keep spawning.
Balancer has a flourishing ecosystem. You’re welcome to contribute to it whether you’re a dev, a community person, or a graphic designer! We strive toward onboarding every new member in a smooth and personalized way.
Join the Ballers and start your Balancer journey now: http://discord.balancer.fi/
Are you looking for a grant? Learn more here.
This article is for informational and educational purposes only. It should not be construed as investment or trading advice or a solicitation or recommendation to buy, sell, or hold any digital assets. Transactions on the blockchain are speculative. Carefully consider and accept all risks before taking action.
