The new feature allows traders to tap into pools of assets that trade at similar price levels. Balancer claims to be the first automated market maker to offer stable pools.
Balancer, a popular automated market maker for cryptocurrencies, has launched a new protocol feature designed to lower fees and improve the trading execution for like-kind waps.
Stable pools “are designed specifically for assets that trade at a similar price,” wrote Fernando Martinelli, the co-founder and CEO of Balancer Labs. As such, the pools increase capital efficiency for like-kind swaps, thereby offering traders tighter spreads and lower slippage. Liquidity providers, meanwhile, have the opportunity to earn a competitive yield.
Martinelli explained that, unlike traditional weighted pools, all tokens inside the Balancer stable pools are contained in a single vault:
“On Balancer, a trader can make trades that route through both pools at the same time with a very small increase in gas costs compared to a trade that routes through Curve and Uniswap for example.”
With the launch of stable pools, Balancer now has at least three different types of pools — the other two being weighted pools and the Element Finance integration that was introduced in April of this year.
Balancer Labs has raised tens of millions of dollars from venture funds seeking long-term exposure to the decentralized finance, or DeFi, market. Some of the most prominent VC investors in Balancer include Three Arrows Capital, Blockchain Capital, LongHash Ventures and Fenbushi Capital.
As Cointelegraph reported, Balancer launched version 2 of its protocol in May of this year, promising faster speed and improved liquidity. The upgrade resulted in a significant reduction in gas costs, especially for internal balances.