A sharp increase in DeFi activity has returned the Balancer rally to a new all-time high.
Undoubtedly, at the beginning of 2021, projects from the field of decentralized finance (DeFi) became a real trend, but subsequently the sector gave way to non-financial tokens. But already in March, we again saw a new rise in interest in DeFi tokens, the decline was short-lived.
Back on February 23, after a strong market correction, the BAL reached its low of $ 28.95. However, since then, the BAL rate has risen by 122% and set a new all-time high of $ 64.99. Thus BAL has become one of the fastest growing players in the DeFi space.
What is Balancer?
Launched in March 2020, Balancer is an auto-market making (AMM) blockchain protocol which has similarities with Uniswap.
In simple words, Balancer is an exchange for trading ERC20 tokens without using the order book. Balancer works on smart contracts and creates so-called liquidity pools, from which funds for trading are actually taken. Balancer pools have great liquidity, so anyone can exchange any amount in cryptocurrencies without any problems.
It is noteworthy that smart contracts have been audited by a third-party company Trail of Bits, therefore they are completely safe for investments.
Balancer has introduced its own governance tokens, called BAL, which are distributed to liquidity providers through a process called liquidity mining.
Token Balancer (BAL)
Balancer is a BAL token issuer created to reward liquidity providers. Token release was on June 23, 2020 based on the Ethereum blockchain. According to analysts from The Block, on the first day, 1,000 investors became BAL token holders, and the initial emission was 35,725,000 BAL.
BAL is the second largest project on the list with an estimated capitalization of $ 653 million. Second only to Compound, whose token previously rose from levels of about $ 20 to above $ 300.
Balancer 2.0 delights the DeFi community
A significant impetus for Balancer began to form when the Balancer Exchange Gas Reimbursements feature was implemented in the protocol as a way to reduce high transaction costs. In February, began to appear tweets about Balancer 2.0 and the various features that will be included. Such as protocol storage, gas efficiency, and resilient oracles.
Balancer also announced a partnership with Aave to create Balancer V2 Asset Manager, a hybrid automated market maker (AMM) liquidity pool and lending product. Balancer’s rally to a new all-time high supported by the use of its new offerings. And the project looks well positioned to handle the next wave of DeFi hype as institutional and retail investors increase in the cryptocurrency market.
Analysts believe that the price of the BAL token will likely move up in 2021. Since many of the Defi tokens start to rise in price in the first days after the release. And in a short period of time add hundreds of percent of the value. And the development of Balancer 2.0, can become a key driver of growth in the value of the BAL token.