Balancer is an automated portfolio manager, liquidity provider, and price sensor that empowers decentralized exchange and the automated portfolio management of tokens on the Ethereum blockchain and other EVM compatible systems.
Balancer Pools contain two or more tokens that traders can swap between. Liquidity Providers put their tokens in the pools in order to collect swap fees.
Balancer is based on an N-dimensional invariant surface which is a generalization of the constant product formula described by Vitalik Buterin and proven viable by the popular Uniswap dapp.
Balancer V2 brings powerful new features to slash gas costs, super-charge capital efficiency, unlock arbitrage with zero-token starting capital, and open the door to custom AMMs.
With this mechanism, needs of both Liquidity Providers and Traders are served:
Liquidity Providers collect trading fees, while the their portfolio is continuously rebalanced
Traders gain access to an open, decentralized exchange that never closes, allowing them to swap what and when they like for low fees