About Balancer (BAL)

Balancer refers to itself as a protocol for programmable liquidity; the crypto community calls it a decentralized exchange (DEX), or, even more specifically, an automated market maker (AMM). 

Among the primary technologies driving decentralized finance (DeFi), AMMs are smart contracts abetting autonomous, crowd-sourced liquidity pools that reward liquidity providers (token depositors) while feeding DEX platforms with tokens. 

More than $20 billion of assets were locked in DeFi contracts as of mid-January 2021. Driving that surge are AMMs like Balancer.

Launched in June of 2020, Balancer allows users to engage in liquidity mining, depositing crypto assets (up to eight, in any ratio) into its liquidity pools. Access comes via purchased units of uniquely built indices comprising crypto holdings that exist on the network. It’s essentially software, running on Ethereum, designed to incentivize a decentralized network of computers to auto-operate a DEX.

The protocol is governed by the Balancer (BAL) token, earned via liquidity mining activities. BAL is a governance token, representing a voting interest to make changes to the platform.

Inherently structured to provide liquidity to its users, Balancer accomplishes this in part by issuing balancer BAL tokens to market participants who deposit assets into the pooled index funds. Automatic adjustments are made in each of these pools to properly rebalance crypto holdings to their pre-designated levels. By distributing BAL to all its various liquidity providers, the Balance platform maintains decentralization on the exchange. 

The supply of BAL is limited to 100 million tokens, which will be fully distributed by 2028. Holders of BAL will be able to vote on protocols affecting the functionality of the exchange.

Balancer first began in 2018 as a research project at BlockScience, a software consulting firm co-founded by Fernando Martinelli and Mike McDonald.

What is the price of BAL? 

Currently trading on a half dozen exchanges with about $140 million worth of average daily volume, BAL reached a high of an all-time high of $37 in August of 2020 only a couple of months after debuting at about $6.75.

More recently (as of mid-January 2021) the price was on the rise. Between mid-December 2020 and mid-January 2021, BAL rose 45% to about $20. BAL has risen more than 200% since its birth in June 2020, giving it a market cap of $200 million. That puts BAL in the No. 97 spot among the largest cryptos ranked by cap.

The circulating supply of tokens: 6.9 million. 

Bottom line: If you think decentralized crypto trading has a future, BAL could be considered as a longer-term investment with potential upside; additionally, users keen to exert influence over the development of the platform would see a benefit in holding BAL.