The Balancer protocol launched its own BAL token on the Ethereum mainnet on June 23, 2020. According to The Block, on the first day, about 1,000 Ethereum wallets became recipients of tokens, and the initial emission was 35,435,000 BAL.
Shortly after the launch, the token became available for trading on its own Balancer platform and Uniswap decentralized exchange, where its rate rose from $7 to $22. Trading volumes remained relatively low.
On June 1, Balancer launched a mining program by providing liquidity. Then the team noted that the rewards would not be distributed immediately, since the smart contract still needed to be finalized.
For 3 weeks, 435,000 BAL were credited to liquidity providers. In the future, they will receive 145,000 BAL weekly. In total, liquidity providers will receive up to 65 million tokens, 25 million BAL are reserved for the Balancer team, and another 10 million will go to the development of the project ecosystem.
What Is Balancer (BAL)?
Balancer is an automated market maker (AMM) that was developed on the Ethereum blockchain and launched in March 2020. It was able to raise a $3M seed round by Placeholder and Accomplice. Balancer protocol functions as a self-balancing weighted portfolio, price sensor and liquidity provider. It allows users to earn profits through its recently introduced token ($BAL) by contributing to customizable liquidity pools.
How Many Balancer Tokens (BAL) Are There in Circulation?
Balancer wasn’t launched with a native token. However, in June 2020, they launched a governance token, $BAL, following the success of Compound’s token COMP. The purpose of the token is to allow for more decentralization and as an incentive for LP.
Of the total 100M tokens that were created, 25M were reserved for the team, core developers, investors and advisors. 5M tokens were allocated for the Balancer Ecosystem Fund, which would be used as incentives for strategic partners. Another 5M were allocated for the fundraising fund. This fund will be used by Balancer to support its operation and growth at future fundraisings.
The remaining tokens are to be mined by liquidity providers on the platform and are released at a rate of 145K per week. Provided the distribution rate is kept constant, it would take approx. 8.6 years to finish distributing the tokens.
How Is the Balancer Network Secured?
For Balancer, security is a top priority and that is why the protocol has been fully audited three times by Trail of Bits, ConsenSys and OpenZeppelin. There are no admin keys or backdoors, hence, making it trustless, and the balancer pools are not upgradeable. Balancer does not support tokens that do not conform to the ERC-20 standard, even though they may be in use on some pools.
The tokens held on Balancer pools are not controlled by Balancer, but are smart contracts. Nevertheless, that does not remove the inherent risks of smart contracts. The configurable rights pools (CRPs) ensure that tokens with known issues are barred from being used in pools. It further ensures that all other tokens safely interact with the protocol
Where Can You Buy Balancer Token (BAL)?
Balancer allows users to add to liquidity pools to earn $BAL, which is automatically awarded to the users weekly. Top exchanges that support $BAL include Binance, ZenGo, Global, HBTC, Kraken, OKEx, Huobi, etc.