The Most Flexible and Efficient AMM is Live — Meet Balancer V2

Trade at the best price with low gas costs and a fully redesigned interface. Provide liquidity with high capital efficiency.

Fernando Martinelli
May 11 · 8 min read

After more than a year of development, Balancer Labs is thrilled to announce that Balancer V2 is now live and accessible with a new user interface.

For those who missed it, Balancer V2 offers a generalized protocol for AMMs. A full recap of Balancer V2 can be found here:

At a high level here is what you need to know about today’s launch (more detail is shared in the sub-sections below):

  • New trading and liquidity interface at app.balancer.fi
  • Updated branding live at balancer.fi
  • Community Multisig
  • V1 to V2 liquidity migration
  • New BAL Liquidity Mining
  • Dynamic-fee pools powered by Gauntlet
  • V2 Launch Partners

New Interface and lower gas costs

The Balancer front-end has been rethought as a part of the V2 upgrade. Balancer.fi is an interface created by Balancer Labs to share information with those entering the Balancer Ecosystem. The Balancer Protocol, open-source to all, continues to be accessible through multiple interfaces: 1inch, Matcha for V2 & Zerion, Zapper, PieDAO for V1.

On the surface, balancer.fi offers the same functionality as before. On the backend, trades will be routed through the most efficient protocol. Our expectation is that V1 will continue to provide the best price until a substantial amount of liquidity migrates to V2, at which point we expect trades will be routed through V2's Protocol Vault resulting in lower gas costs and better pricing.

Here’s an example of the difference in gas costs on a WETH to DAI swap:

*Expected gas costs in the best case scenario after the 3 month pause period ends. Gas costs before pause periods are expected to be 99k & 78k respectively

Additionally, the interface for liquidity providers has been improved. For the first time it is possible to invest in pools with any combination of tokens and any amounts, provided the tokens are present in the pool.

Updated Website and Branding

Outside of moving to the balancer.fi location, the new Balancer homepage offers an improved overview of the protocol.

New Balancer Homepage

Head to app.balancer.fi to get a look at Balancer’s updated automated portfolio manager and trading platform.

Community Multisig

The Balancer Protocol has transitioned its governance execution to a community multi-sig. As per the governance proposal, the new set of signers are:

This group will be responsible for executing all transactions passed on Snapshot as Balancer continues to be run by those who care most, the community.

Liquidity Migration

As part of the V2 upgrade, liquidity positions will soon need to be migrated from Balancer V1. We’ll be releasing a full tutorial on how to do this in a separate post.

Certain partners have built strong infrastructure around specific Balancer V1 pools and may choose to remain on the legacy version for the foreseeable future. All new pools and integrations are encouraged to launch on Balancer V2 to take advantage of all the added advantages mentioned above.

V2 Liquidity Mining

Balancer Protocol will migrate to a new and more trustless program for BAL liquidity mining as approved by Balancer governance.

When the new V2 Liquidity Mining program kicks in, liquidity providers will be able to stake positions in different pools to receive BAL. Each pool is assigned to one of three different tiers with each tier slot getting a fixed amount of BAL per week.

These tier allocations will be governed in a transparent and accountable way by Ballers — Balancer’s most actively engaged community members. Anyone can participate and become a Baller. V2 liquidity mining is discussed in detail on our Forum.

Dynamic-fee Pools Powered by Gauntlet

Balancer Labs has been working closely with Gauntlet to optimize yields across V2 pools. The set of Gauntlet pools created on V2 maps directly to the set of existing pools on V1. Collectively the Gauntlet pools will contain the majority of Balancer V1 aggregate liquidity after migration.

Gauntlet introduces dynamic-fee pools by applying a rigorous methodology taking into account several inputs — including market conditions like volatility— to make optimal fee predictions for pools. This is expected to lead to higher APYs and optimized trading fees for LPs!

For more information on Gauntlet pools, check out this brief:

V2 Launch Partners

Balancer Labs is excited to spotlight a number of V2 launch partners — most notably a partnership with Gnosis to deliver the best user experience to traders — across price, UX, and transparency.

The Balancer-Gnosis-Protocol (BGP)

Balancer-Gnosis-Protocol (BGP) combines the new and improved vault system of Balancer V2 with Gnosis Protocol’s unrivaled price finding mechanism.

BGP guarantees users will get better prices on their trades. With integrated liquidity sources, BGP beats DEX aggregators for prices. This means that if a better price is available on DEX competitors, users will get that price. With the auction mechanism underlying price finding, traders are protected from MEV — otherwise known as a way to prevent miners from taking an undue cut of traders’ profits.

We will soon introduce a joint incentive program, expected to kick off in the middle of June, as liquidity migrates from V1 to V2.

Aave

“Part of what makes DeFi so exciting is its composability, and with Balancer this has resulted in a partnership that optimizes the experience for liquidity providers through the Aave-Balancer Asset Manager and opens up new possibilities for Aave stakers with the AAVE/ETH Safety Incentive pool. We look forward to exploring more synergies with Balancer in the future.” — Stani Kulechov, Founder and CEO of Aave

Element Finance

The Element Protocol brings the attractive high fixed rate yields that DeFi users crave while maximizing capital efficiency, creating market liquidity, and reducing user costs. Users can purchase BTC, ETH, USDC, and DAI at a discount without being locked into a fixed term, allowing easy swapping between the discounted asset and any other base asset at any time.

“We use Balancer V2’s custom trading curve functionality to enable an invariant that works really well for assets that converge in value over time. Plugging into the V2 ecosystem lets users be able to purchase and sell fixed yield assets from any other major asset, building on the existing liquidity Balancer has. We’re impressed by the innovation and grit the Balancer team has shown and are proud to be working closely with them!”, — Will Villanueva, CEO & Co-Founder of Element Finance

Enzyme Finance

Enzyme is a non-custodial on-chain Asset Management infrastructure. It allows people to build, scale and monetize Vault strategies through the Enzyme App interface. Bringing Balancer v2 into Enzyme as part of the Sulu release will enable Vaults to provide liquidity to pools, earn $BAL rewards, and get access to passively managed vehicles without worry about the rebalancing costs! We look forward to exploring other possibilities with the Balancer team.” — Mona El Isa, Co-Founder and member of Enzyme Council

Gyroscope

“Gyroscope is an all-weather stablecoin designed to be the most liquid, scalable, and resilient around. It does this with a new AMM design, the development of which is greatly simplified and enhanced by Balancer V2’s support for customizable AMM logic. This new AMM, our S-AMM, is able to concentrate liquidity within ranges defined by our P-AMM, in turn incentivizing market participants to keep the stablecoin to $1. Moreover, the combination of Gyroscope’s S-AMM and P-AMM leads to unparalleled liquidity boosting, which will translate into greater liquidity within Balancer’s trading ecosystem. These innovations are at the heart of Gyroscope and are fundamentally made possible by Balancer V2”, Ariah Klages-Mundt, Co-Founder of Gyroscope Finance

Ocean Protocol

“Balancer V1 with Ocean datatokens enabled automatic price discovery for data and staking on data assets for skin-in-the-game curation. These were both world firsts, critical to an open data economy. Balancer V2’s flexible AMMs will help Ocean reduce impermanent loss and improve upon Initial Data Offerings. We’re excited to include Balancer V2 in our next major release.” — Trent McConaghy, Founder of Ocean Protocol

PowerPool

“We’ve chosen Balancer v2 as a core technology for building PowerPool indices and Dynamic AMM pools. It offers extreme flexibility and opportunity for building customizable pools and seamlessly integrating them into the ecosystem. Our dynamic weights changing model and router system is entirely compatible with v2, allowing us to use all our DAMM implementations built for v1 out of the box. V2 is a significant step forward in AMM technology and would lead to entirely new AMM use cases and a wide variety of new financial products. We are about to launch some of them on v2 soon. In my opinion Balancer V2 is an excellent masterpiece of code with great architecture and gas efficiency. Single vault and assets management provides great opportunities both for cheap trades and capital efficiency, which is very important for future PowerPool Indices. From a code perspective, I personally like how the vault optimization was done and the idea of the “estimate” function, which uses state-changing code from view methods and gets a real result through revert.” — Not Real Satoshi, co-founder and CTO of PowerPool

Techemy Capital

“We have been dreaming of decentralized Exchange Traded Products since Ethereum first launched. Balancer V2 is the only infrastructure I trust to run ETPs on” — Fran Strajnar, Executive Chairman of Techemy Group

Thinking of building an awesome product on Balancer V2? Tell us about it and apply for a grant!

What’s Next?

Over the coming weeks, we will be sharing more resources on the changing Balancer V2 landscape. Be on the lookout for guides, explainers, and updates on key topics like liquidity migration, BAL liquidity mining, and V2 governance.

We’re thrilled to welcome a new chapter of capital efficiency and look forward to seeing what everyone builds!

Balancer V2 Flashpaper

Balancer Protocol

Balancer Protocol — the leading platform for programmable liquidity in DeFi.

Balancer Protocol

Balancer Protocol allows for automated portfolio management, turning the concept of an index fund on its head: instead of paying fees to portfolio managers, you collect fees from traders who rebalance your portfolio by following arbitrage opportunities.

Fernando Martinelli

Written by

CEO and Cofounder at Balancer Labs

Balancer Protocol

Balancer Protocol allows for automated portfolio management, turning the concept of an index fund on its head: instead of paying fees to portfolio managers, you collect fees from traders who rebalance your portfolio by following arbitrage opportunities.