Balancer Launches Yield Farming Campaign With Latest Upgrade

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After more than a year of development, Balancer’s v2 includes partnerships with some of the biggest names in DeFi, including Gnosis, Aave, or Ocean, to provide the cheapest experience for traders.

Balancer Launches Upgrade, Token Rewards

One of the most widely used decentralized exchanges (DEXes) has decided to emphasize efficiency for its second version. In documents shared with Crypto Briefing, Balancer expects gas prices for simple swaps to be reduced by up to 53%. 

In addition, the redesigned interface will also provide a cleaner experience and more accurate information on trades.

With the rise in popularity of DEX aggregators like 1inch Exchange, the lowest gas costs, best quotes, and the most efficient market are more important than ever. These DEX aggregators automatically select the best option for any trade, and competition between these exchanges is fierce. Uniswap released its v3 last week, branding it as the most efficient automated market maker.

To compete with Uniswap, Balancer’s v2 rolls out a few unique features for traders and liquidity providers. 

First, users will be able to provide any amount of tokens in a pool, allowing for single-sided liquidity provision. Second, thanks to a partnership with Gnosis, Balancer has announced the Balancer-Gnosis-Protocol (BGP). Gnosis is known for its price-finding mechanism, which scans even competitors to find the best prices on any trade.

This is particularly useful because the underlying mechanism of BGP uses an auction system to provide the best prices. This system has the added benefit of protecting users against miner extracted value (MEV), a technique used by miners to steal profit from trades.

Finally, Balancer is announcing a new liquidity mining campaign of its governance token BAL to incentivize users to migrate both trades and liquidity to its updated version. Liquidity providers on select pools will receive three different tiers of BAL rewards. Balancer’s community will decide on the tiers of BAL rewards and the pools chosen.

Incentivizing liquidity providers to switch from v1 to v2 is crucial as traders only look at the bottom line. If more liquidity is available on v1, traders will continue to use it as the benefits of the technical innovations of v2 are outweighed by the higher liquidity on v1. 

Once liquidity has switched to v2, trades will benefit from the cheaper gas costs and the higher efficiency promised by Balancer.

Disclaimer: The author held BTC, ETH, and several other cryptocurrencies at the time of writing.

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Balancer Labs Kicks Off Largest DeFi Bug Bounty Program

Balancer Labs, the foundation behind the Balancer Protocol, has offered the largest bug bounty prize on record in its attempts to root out vulnerabilities in its V2 Vault architecture. The foundation contributes to the Balancer protocol, which provides liquidity and offers users automated portfolio management.

The announcement of the record bounty program with a top prize of 1000 ETH (over $2M) comes as Balancer launches its most significant upgrade to date — the Balancer V2 Vault. 

The V2 Vault

The V2 Vault is a single vault that manages and holds all user funds entrusted to the Balancer protocol. The upgrade should help streamline transactions and reduce transaction fees on the protocol.

V2 smart contracts were made available to developers on April 20th. They offer the tools required for anyone to leverage capital efficiency in new and innovative ways. Since there is so much at stake, the Balancer team deemed it prudent to allocate ample resources to guarantee the security of V2.

To this end, the team has kicked off their lucrative bounty reward program to incentivize ethical hackers to identify any vulnerabilities in the V2 smart contracts. The Balancer Labs vulnerability tests are scheduled to take place in late April of 2021.

Building a Better and More Secure Balancer Protocol

The latest effort to fortify the V2 vaults by deploying a team of tech-savvy hackers to find bugs in the system shows that Balancer has learned from the past. 

In June 2020, the protocol suffered a devastating attack where hackers managed to siphon a half-million dollars in tokens by manipulating the smart contract of a staking pool.

The hack highlighted a worrying trend where malicious actors increasingly target Defi platforms. The latest example is DODO DEX, a DeFi project that suffered an exploit to its smart contract in March 2021.

A study done by CipherTrace revealed that 50% of attacks that occurred in the crypto sphere in H2 of 2020 were targeted explicitly toward DeFi Projects. The hacks on DeFi resulted in losses of up to $47.7 million.

These worrying statistics seem to have prompted Balancer Labs to intensify their efforts to safeguard their protocol. Balancer Labs CEO Fernando Martinelli noted:

“The more there is at stake, the higher we believe our bug bounty rewards should be. The bug bounty program empowers everyone in the developer community to help us build a better Balancer.”

Tech Firms Are Increasingly Using Bug Bounties 

Bug bounties are emerging as a creative way for security researchers to identify weaknesses in various systems. 

Tech-savvy developers are also cashing in big on these reward programs, which require them to find and report software and system flaws for tech companies. As per a recent BBC report, nine ethical hackers raked in a record $40m from bug bounties in 2020 alone.  

The Ethereum Foundation rolled out a bounty program that offered prizes of up to $50K last year. The process aimed to sniff out critical vulnerabilities found in the imminent ETH 2.0 network.

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Balancer Approves BAL Distribution to Offset Ethereum’s Gas Costs

Key Takeaways

  • The Balancer community has just approved a proposal that will hand out BAL tokens to users.
  • The stipend will help offset the gas costs of using the platform, as well as distribute the governance token.
  • 7,500 BAL will be distributed each week until February 22.

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A recent Balancer Labs proposal will pay users 7,500 BAL per week to help cover their gas costs.

While users pay the gas cost in ETH, the reimbursements will be given out in BAL tokens and can be claimed by the users every week.

Free BAL to Cover Costs

A recent Balancer proposal that would pay users BAL tokens to cover their gas costs has just passed. Put forth by rabmarut, the proposal earned ~1.06 million BAL in support and ~253,610 against.

The program will run from Jan. 25 to Feb. 22 and hand out a total of 30,000 BAL, worth $589,200 at press time, to cover users’ gas costs (Ethereum network fees). If the program is successful in its endeavor, then it may be extended until Balancer launches its V2 upgrade.

Users who swap between WETH, WBTC, USDC, DAI, or BAL and trading directly via the interface are eligible for this reimbursement. On average, users can expect to save anywhere between 40-50%.

Balancer Labs Interface

Since the gas costs incurred are denominated in ETH, and the reimbursement is made in BAL, the median price from CoinGecko’s BAL/ETH pair will be used for conversion.

The Balancer Ecosystem Fund will supply the reimbursements.

Reimbursements will be reduced if more than 7,500 BAL are needed per week, but this is unlikely, according to Balancer. The team has budgeted a surplus in case of an influx in the number of transactions, surges in gas fees, and other unforeseen costs.

Users who route their trades through DEX aggregators like Matcha, 1inch, Paraswap, and others will not be eligible for the reimbursement.

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