Balancer, a decentralized exchange protocol, has unveiled its V3 upgrade. According to the report, the V3 aims to enhance liquidity, provide new developer tools, and drive growth in trading volume. Besides the unveiling, the exchange has also collaborated with the decentralized finance (DeFi) lending protocol, Aave.
A previous collaboration with Balancer offered rewards from a stablecoin pool to incentivize liquidity providers.
Boosted Pools: A Game-Changer for Liquidity and Yield
Aave functions as the leading launch partner with plans for others in the future. Notably, Balance V3 introduces 100% Boosted Pools, and this collaboration fuses its unique permissionless automated market technology with Aave’s market infrastructure. The overall goal is to combine the yield from swaps and lending markets into one entity.
Fernando Martinelli, Balancer’s co-founder, described the collaboration as historic for both parties. Martinelli assured them they would deliver a liquidity solution that everyone in DeFi can access and remain efficient and scalable.
The platform has been structured so that liquidity providers can optimize returns with a single click. They also can have access to DeFi’s markets without needing active management. This significant development for Balancer went live on Ethereum’s Layer 2 scaling solution, Optimism. 2022
Developer-Friendly Enhancements and Broader DeFi Impact
Speaking on yield generation, Stani Kulechov, Aave Labs Founder, noted that combining the strengths of both entities, the evolved Aave V3 Boosted Pool will empower users. Primarily, users will have access to enhanced capital efficiency and simplified yield generation.
As users earn, they can easily access both supply and swap functions with minimal transaction costs.
For clarification, Balancer supports portfolio management and trading in the crypto space for Ethereum and EVM-aligned blockchains. Its structure allows DeFI projects to develop custom pools suitable to their needs. Hence, the V3 upgrade will build on this to eliminate challenges that impede developers. With it, developers on the platform can innovate quickly and seamlessly.
Promising Future for DeFi Collaboration
According to the development team, some new features include custom pool types and Hooks Framework. The former will enhance building AMMs faster and more accessible while the latter extends existing pools’ functionality.
Beyond Aave, Balancer says the V3 has gained traction and received interest from other DeFi protocols like Gyroscope and QuantAMM. Leading industry stakeholders such as Trail of Bits, Spearbit, and Certora audited Balancer V3.
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