One of the leading liquidity protocols in DeFi, Balancer offers numerous opportunities for those who want to make gains in the crypto market. The integration with BRZ has recently made this process even simpler and more convenient.
With this partnership, Balancer offers new features for those holding the world’s largest non-dollar stablecoin. How about learning more about this protocol and how to take advantage of the opportunities available?
Read on!
What is Balancer?
Balancer acts as a decentralized liquidity provider, assuming the role of a decentralized exchange (DEX). In addition, the platform offers an automated portfolio manager for crypto assets and provides liquidity for transactions with tokens created on the Ethereum network, classified as ERC-20.
Like Polygon, Balancer was created to support trading on the Ethereum network. However, unlike centralized exchanges, the protocol works without intermediaries providing liquidity for transactions in a programmable manner.
The protocol also allows the creation of liquidity pools with tokens such as BRZ. In total, more than 21 thousand liquidity providers currently operate on Balancer, and it also maintains 3,663 liquidity pools that can group up to 50 different tokens.
In this way, the protocol offers rewards to users with a balance stored on the platform. This balance is used to confirm transactions created from smart contracts.
Balancer uses the BAL governance token to create a decentralized platform administration, where BAL token holders can vote on changes to the protocol.
How does the protocol work?
Balancer is open source, and its main functions are automated portfolio management and decentralized token trading, thus assuming the role of an Automated Market Maker (AMM).
The protocol also offers an arbitrage possibility for investors who trade daily in the crypto market. The platform also attracts developers who work on creating and updating the protocol.
Within the platform, the liquidity pools act as index funds but with differentiated fees than in the traditional financial market for this type of investment.
Therefore, the protocol has unlimited flexibility, and instead of regrouping the liquidity pools in each transaction, Balancer makes a new division of fees through traders’ swaps.
What are the features of Balancer?
The protocol offers several opportunities for end users who want gains from solutions in DeFi.
Tokens trading
Balancer Protocol offers trading between liquidity pools on the platform through flash swap operations. This trading allows arbitrage between different prices of tokens stored in the protocol, such as the BRZ, which can result in a profit for investors.
Besides flash swap operations, the protocol has another type of borrowing-oriented trading called flash loans. In this type of transaction, the borrowed tokens are repaid in the same transaction, and this ‘instant refund’ can happen in flash swap transactions or by collateral exchanges.
Liquidity Pools
All transactions on the Balancer Protocol work through smart contracts, as does the entire ecosystem of the platform. In addition, because it offers the exchange between tokens allocated to different liquidity pools, the protocol has several types of liquidity pools.
The pools known as weighted pools are more flexible, where users can configure the platform according to token allocation. In this type of pool, it is possible to store crypto assets with an 80/20 or 60/20/20 ratio.
Metastable pools, however, are designed to store balances in stable price tokens like the BRZ. In this case, only stablecoins can be held by users.
Meanwhile, Liquidity Bootstrapping Pools (LBPs) act as arbitrary liquidity pools and can create pressure to sell tokens to weigh the price of the crypto asset and keep fees lower.
Finally, managed pools are highly programmable platforms that host up to 50 token types. Users use this type of liquidity pool to strategize their investments in the crypto market.
What is the partnership between Balancer and BRZ, and how to take advantage of it?
Consolidated as one of the main stablecoins of the crypto market and increasing its presence in the DeFi environment, BRZ can be used at Balancer to have returns in one of the pools in the protocol.
Check out the step-by-step to get profitability from your BRZs:
- Â Â Â 1st Step: you must have a Web3 wallet, such as Metamask or Brave;
- Â Â Â Â 2nd Step: it is also vital to have the Polygon network’s native token, MATIC, which is ideal for paying the network’s transaction fees. The good news is that the fees are not expensive, and R$ 2.00 is enough to pay all the costs;
- Â Â Â 3rd Step: To buy MATIC, you can use the major centralized or decentralized exchanges. Then send it to your wallet’s address in Web3;
- Â Â Â Â 4th Step: to buy BRZ, you can use Transfero Crypto, and with a transfer via Pix, you can convert your reais into BRZ and transfer them to your Web3 wallet;
- Â Â Â 5th Step: with MATIC and BRZ in your wallet, you should go to stableswap.fi site and exchange half of your BRZs for jBRL;
- Â Â Â Â Step 6: Finally, you must add liquidity to the pool in Balancer. Look for the 2brl pool (BRZ x jBRL) in the protocol or click on this link.
That’s it! Now you will start receiving earnings in BRZ for providing liquidity to this pool at Balancer.
Now that you already understand how to take advantage of the opportunities at Balancer, how about learning more about the partnership between BRZ and Polygon?
