Balancer (BAL) is an automated market maker (AMM) protocol that operates on the Ethereum blockchain. Launched in March 2020, Balancer strives to function as a self-balancing weighted portfolio, price sensor, and liquidity provider. It allows users to receive compensation through its native token, BAL, by contributing to customizable liquidity pools. Balancer was not initially launched with a native token, but in June 2020, the BAL governance token was introduced to encourage liquidity provision and decentralization. Balancer's unique feature is that it allows liquidity providers to have up to eight assets per market, which are weighted by percentage and rebalanced automatically.

Balancer operates several types of pools: private pools, shared pools, and smart pools. Private pools give the owner governance over the pool, making them the sole contributor of liquidity. Shared pools are designed for those who want to become liquidity providers (LPs), who are compensated with Balancer Pool Tokens (BPTs). Smart pools are similar to private pools but are controlled by a smart contract, allowing anyone to contribute liquidity. Balancer's unique feature is that it allows users to decide how much of a supported asset they wish to deposit, rather than requiring a 50% deposit of the desired asset.

Balancer's primary use case is to provide a platform for users to receive compensation by contributing to liquidity pools. It also offers a unique feature that allows more than one token to be added to a pool, and Ethereum (ETH) is not required. This flexibility makes Balancer a versatile tool in the decentralized finance (DeFi) space. Balancer also strives to offer potential benefits on assets that are in low demand through arbitrage opportunities and slippage reduction.

Balancer was developed by Balancer Lab, founded by Fernando Martinelli and Mike McDonald. The project began as a research program at a software firm, BlockScience, in 2018. The team behind Balancer is composed of individuals with a deep understanding of the DeFi space. Balancer was launched in March 2020 and raised funds in a seed round by Placeholder and Accomplice. In June 2020, Balancer introduced its native token, BAL, following the introduction of other tokens in the DeFi space. The introduction of the BAL token aimed to encourage decentralization and reward liquidity provision.

The BAL token serves as the governance and economic token within the Balancer ecosystem. As an Ethereum-based token, BAL holders have the ability to vote on important decisions within Balancer, giving them a direct influence over the platform's future. This decentralization of governance seeks to enhance the protocol's resilience and reduce dependency on any single stakeholder. BAL token holders may receive non-monetary incentives for their participation in the platform's liquidity provision and trading activities. The BAL token enables holders to participate in decision-making processes and may provide non-monetary incentives for contributing to the platform's liquidity. The utility of the BAL token within the Balancer ecosystem may be influenced by the platform's growth and adoption.

Balancer enables users to establish and manage customizable portfolios, allocating their assets across a variety of decentralized tokens and liquidity pools. A key feature of Balancer is its automated portfolio rebalancing mechanism. Utilizing complex algorithms and smart contracts, Balancer strives to modify the composition of a user's portfolio to maintain desired asset allocations. This dynamic rebalancing aims to keep the portfolio aligned with the user's asset management objectives and market conditions. Balancer also supports liquidity provision for DeFi projects by allowing users to contribute their assets to liquidity pools. These pools function as a decentralized marketplace, enabling users to trade tokens and receive non-monetary incentives by providing liquidity. Balancer's design permits the creation of customizable liquidity pools with multiple tokens and varying weightings, aiming to improve the flexibility and efficiency of trading activities.

Balancer is an automated market maker (AMM) that enables users to establish liquidity pools with up to eight different tokens in any ratio. These tokens must comply with ERC-20 standards. Balancer pools can be viewed as portfolios that rebalance automatically, wherein anyone can participate in the creation or joining of a decentralized index. The Balancer protocol is governed by the Balancer (BAL) token, which may be obtained through participation in liquidity mining activities involving Balancer’s liquidity pools. Balancer pools operate similar to weighted indexes within the DeFi ecosystem, and can maintain portfolios of up to eight different ERC-20 tokens. Balancer employs its constant mean market maker equation to maintain balance within pools algorithmically, independent of manual intervention. Balancer, a decentralized finance protocol, provides a unique incentive model for liquidity providers and traders within its multi-token pools. Liquidity providers may receive non-monetary rewards from every trade that occurs in the pool they contribute to. Balancer permits liquidity providers to establish their own pools with custom token splits and weights, which may give them more control over their assets and the potential to mitigate their exposure to volatile assets. For traders, Balancer's multi-token pools aim to provide the advantage of increased trading pairs and potentially lower fees. Balancer's Smart Order Router is designed to strive for competitive prices, even if it means traversing through multiple pools. This feature, along with the increased number of trading pairs, may result in cost efficiencies for traders.

Balancer's Smart Pools offer a unique approach to automated market making (AMM) by allowing users to create programmable liquidity. Unlike traditional AMMs that use a constant product formula and limit liquidity pools to two assets at a fifty-fifty ratio, Balancer's Smart Pools use a constant mean formula, which allows for more than two assets and weights outside of fifty-fifty. This means Balancer pools can include up to eight tokens at any number of weights. This flexibility may allow for various approaches for projects considering liquidity creation. Balancer's Smart Pools strive to maintain liquidity for both buyers and sellers, which may help in managing the occurrence of unfilled orders and price shocks. Users participating in Smart Pools receive non-financial incentives every time they rebalance the user’s portfolio.

Balancer's governance model is decentralized and driven by the Balancer Governance Token (BAL). BAL holders, known as Balancer Governors, vote on proposals relevant to the protocol. These proposals can range from Governable Protocol Fees to how BAL Tokens will be distributed. The governance process consists of five stages: writing a Request for Comment (RFC), facilitating preliminary discussion, developing and validating a transaction Pull Request, initiating a Snapshot vote, and executing the result or trying again in 30 days. The Balancer Maxis, a group of community members, assist in the process by helping with proposal creation, evaluation, and execution. The governance model aims to facilitate decisions about new features and the direction of the Balancer Protocol are made by those who hold BAL tokens and are committed to its ongoing development.

Balancer has entered into several collaborations to contribute to its ecosystem. One such collaboration is with LayerZero, a cross-chain interoperability protocol. This collaboration aims to contribute to the development of decentralized applications, particularly for Layer 2 decentralized exchanges. By connecting over 50 different blockchains, LayerZero aims to facilitate cross-chain transactions for Balancer and provide users with more options. Another collaboration is with VCGamers, a digital game marketplace platform in Indonesia. By utilizing blockchain technology, Balancer and VCGamers aim to contribute to the gaming experience, striving for secure, transparent, and efficient transactions. Balancer has also partnered with Sypool, a decentralized asset management platform, to provide its users access to AI-based asset management tools. Lastly, Balancer has collaborated with KOLONFT, a Web3.0 platform dedicated to classical music, bringing a new dimension to its ecosystem.