The Balancer Labs team is a lean team with large ambitions. We’ve been building, researching, and immersed in DeFi since its earliest days and are thrilled to be launching a new primitive to the world of decentralized finance.
A little background on Balancer
Balancer started as a research project in early 2018 inside BlockScience. By exploring multidimensional invariant surfaces, we came up with a powerful mathematical framework that enables any portfolio to continuously self-rebalance while also generating fees. A lot of effort went into carefully designing, testing and simulating Balancer protocol.
Along the way, we were thrilled to see Hayden launch Uniswap, which we are big fans of. Taking DeFi by storm, Uniswap confirmed our hypothesis that a lot of (retail) liquidity was standing on the side lines waiting for an opportunity to market make.
Balancer’s mission is to provide a flexible and trustless platform for programmable liquidity.
Balancer allows any token holder to provide liquidity with 100% of their assets by immediately turning their whole portfolio into a Balancer pool or adding it to existing pools. Balancer allows pools with up to 8 tokens, with any custom %-distribution of value for each of them. Anyone can now create their own self-balancing index fund, or invest in someone else’s.
Ash Egan, crypto lead at Accomplice and previously @consensys @convergevc @princeton co-led the round.
Balancer is building an important primitive at the liquidity layer within decentralized finance. Balancer’s protocol democratizes market making for token holders, allows for auto-rebalancing for portfolio management, and provides a sandbox for developers to build new experiences within DeFi. We are ecstatic to back Fernando and the Balancer team alongside Placeholder VC!
Chris Burniske, a partner at Placeholder and co-author of the best-selling book, Cryptoassets, co-led the round.
Balancer’s elegance and extensibility is what immediately drew us to the protocol, not to mention a core team of brilliant and well-intentioned mathematicians and engineers.
Balancer inverts the economics of indexed asset management. Instead of investors paying annual fees to indexed portfolio managers, with Balancer the investors get paid for contributing their asset portfolios to indexed pools. The writing is on the wall for this trend, with many zero-fee ETFs already available in capital markets, but Balancer has taken it a step further in designing a system that not only doesn’t charge investors a fee, but pays them for contributing their assets.
But indexed asset management is only half of the story for Balancer. Similar to Uniswap, Balancer’s indexed funds serve as liquidity pools for users, suppliers, traders and other market participants to access. As more investors are drawn to Balancer’s promise to pay people for their assets, these pools will grow, and we expect them to become some of DeFi’s most liquid venues. Since pools are not restricted to 50/50 weighting, the field of programmability with Balancer is vast, and already we’re seeing top tier DeFi teams experiment with the protocol as a way to solve as-of-yet unmet needs.
Balancer protocol is open source and has been audited by Trail of Bits: you can find the detailed audit report here. The smart contracts are already on main net and a closed beta is under way for improving the UI/UX before we open it for anyone to use by the end of the month.
We have also been talking to dozens of potential partners about integration and ways of using Balancer as a building block to explore some interesting concepts. Check out our previous articles on Bonding Surfaces, the Zero-Impermanent Loss Stablecoin Pool and Liquidity Bootstrapping Pools to see examples.
The journey is only just beginning and we are on the lookout for great talent to help us achieve our challenging goals. From solidity to front-end devs, if you think you could fit the Balancer team please give us a shout!