Decentralized automated market maker (AMM), Balancer announced the launch of Balancer v3, reinforcing its position as a leading platform for custom pool innovation. This new version is designed to advance the next generation of AMM architecture and contribute to the evolution of the on-chain economy.
Balancer v3 promises a 10x improvement in developer experience (DX) by moving key design elements from the pool to the vault. This change streamlines the custom pool creation process, allowing developers to concentrate on pushing the boundaries of AMM innovation while relying on Balancer’s robust technology to significantly reduce engineering complexity. In addition to custom pools, Balancer v3 introduces a hooks framework, enabling developers to easily extend established pool invariants. This opens up new design possibilities and provides greater flexibility for AMM development.
1/ Balancer v3 is LIVE!https://t.co/RQO6oJXEpJ
Build GREAT tech, generate REAL value, and they WILL come. 
pic.twitter.com/XNqG8xrEBS
— Balancer (@Balancer) December 11, 2024
By shifting repetitive custom pool design patterns into the vault, Balancer v3 ensures consistency across all pools and eliminates major sources of complexity in the pool contract. This update allows AMM developers to leverage a tech stack that automates routine, low-level development tasks, enabling them to focus on innovative invariant designs.
As a demonstration of the new features, Balancer Labs has launched 100% Boosted Pools. These passive, custom pools route 100% of the liquidity from Liquidity Providers (LPs) to external yield markets, generating additional rewards while ensuring that all liquidity remains accessible for facilitating swaps and earning rewards.
Balancer v3 Introduces Liquidity And Custom Pools, Along With Hooks Framework
Furthermore, the new protocol introduces E-CLPs, an asymmetric and customizable concentrated liquidity pool developed by the Gyroscope team. This pool allows liquidity providers to benefit from concentrated liquidity without the need to actively manage liquidity ranges.
QuantAMM is also launching Blockchain Traded Funds on Balancer v3, a custom pool type that functions as a passive on-chain fund product. This innovation creates a new class of financial instruments for liquidity providers, expanding investment opportunities.
Balancer v3 also incorporates a hooks framework, which enables developers to enhance pool functionality at various stages of its lifecycle. The hooks provide the flexibility to tailor pool behavior for specialized AMM strategies, improve liquidity management by introducing dynamic fee structures and yield strategies, and unlock new opportunities for financial innovation and enriched user experiences.
Balancer is a decentralized AMM protocol built on Ethereum, with a primary focus on managing fungible and yield-bearing liquidity. The platform’s success is closely tied to the success of the protocols and products that are built on top of it.
The architecture of Balancer v3 emphasizes simplicity, flexibility, and extensibility. One of the key features of v3 is the redefined vault, which more clearly outlines the requirements for custom pools. This shift moves core design patterns out of the pool and into the vault, streamlining the creation and management of liquidity pools.
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