Episode 78: Balancer (BAL) DeFi AMM platform with Jeremy Musighi of Balancer Labs

MikoBits Blockchain NFT and DeFi show

What is Balancer?

Balancer serves sort of three primary groups of users who interact with the protocol. Number one is investors who use balancer as an automated portfolio manager and a mechanism for generating Yield. So you can use balancer as a platform to deposit your crypto assets, and not only deposit them, but to put them into a portfolio that is structured or designed based on specific percentages of how you want to be like holding your assets. So for example, maybe I would want to have a portfolio that's 33%, BTC, 33%, ETH, and 33%, stable coin, or really anything else you can think of balancer will automatically rebalance your positions on a regular basis. And at the same time, you'll be earning Yield through the trading fees that are generated on the platform. And that is a segue into the second group, which is traders. Yep. So traders use the balancer AMM as a way to trade token a for token being any ERC-20 token is compatible with balancer. And each time a trade is made on the balancer. It is a trade between a user and a liquidity pool. And those that liquidity pool consists of tokens that belong to the liquidity providers, the investors that I just mentioned before. And so when traders make those trades, they pay a very small fee, depending on the design of that pool that they have interacted with. And that fee goes to liquidity providers, which helps them grow their portfolio very passively. It's a set and forget type of tool where you deposit your crypto and you go on with your life, and it just does the work for you. And so yeah, traders use it as a liquid market to exchange crypto assets, you know, quickly, easily with minimal slippage, and at a good price. And then the third group is the builders, the developers balancer is not only an exchange, not only a portfolio manager, it's really a lot more than that. It's designed with so much flexibility and customizability. And that makes it act as a DeFi primitive of financial primitive, or a building blocks that you can use to create all kinds of financial products and services with balancer either as sort of an infrastructural layer underneath or as a protocol that is integrated in one way or another into the functionality of your protocol, you as the developer. So there's an entire ecosystem of startups, developers, entrepreneurs, who are building really incredible solutions and have built very incredible solutions using balancer.