Balancer Labs and the Balancer DAO look ahead and share what is to come this year.
2021 proved to be a successful year in the Balancer ecosystem. From a steady cadence of user growth and product launches to a growing community of diverse teams building on Balancer, we are looking forward to doubling down on the success with another year of groundbreaking innovations. Let’s look at what is to come in 2022.
Balancer Protocol’s success comes not only from the Balancer Labs team and members of the Balancer Community but from the projects building on top of it. This burgeoning ecosystem sparked a deeper look into the DAO2DAO structure and how it can lead to the future success of the Protocol.
After V2 launched, CEO and co-founder Fernando Martinelli shared his vision for Balancer Protocol. Balancer was designed to be a flexible and permissionless asset management tool that allowed traders to directly tap into the protocol’s liquidity. Due to its unique and highly configurable technology, Balancer became more than a single Automated Market Maker (AMM). It has transitioned into a building block for other AMM designs created by independent teams, focusing on different use cases.
Balancer went from product phase, where proof of concept was demonstrated — to protocol phase, where scaling happens through strong network effects.
In 2022, Balancer will focus on serving as a key building block for others to #BUIDL on. Due to the success quickly seen with the Protocol phase, a strong focus will be placed on a DAO2DAO structure, increasing relationships with projects building on Balancer Protocol. To date, 22 projects have successfully built on Balancer Protocol, and just under a billion dollars worth of funds were raised by teams who used Balancer Protocol’s Liquidity Bootstrapping Pools (LBPs) to kickstart the liquidity of their tokens.
Balancer’s technology facilitates the growth of a decentralized future. The V2 Vault architecture offers security, flexibility, capital efficiency, and gas efficiency, and its customizable AMM logic acts as a permissionless building block for projects creating innovative DeFi solutions.
Balancer kicked off the new year by collaborating with decentralized reserve currency OlympusDAO. By migrating their liquidity to Balancer Protocol, OlympusDAO will establish $OHM as a liquid asset within the Balancer ecosystem.
As we move forward into 2022, Balancer is narrowing the focus of partnerships in key areas:
Identify opportunities that could benefit from Balancer’s flexibility and proactively engage with the respective community. A few examples:
- Low utilization pools that are exposed to unnecessary IL given their 50/50 construct
- Fragmented PCV liquidity can be consolidated under a weighted pool construct (eg, Olympus)
Grow the partnerships subDAO under a dual hat mandate:
- Identify deep integrations within the DeFi ecosystem to reinforce Balancer’s resiliency
- Identify & develop use case volume drivers to grow the underlying economics of the protocol. This includes developing relationships with crypto native money managers and new institutional entrants
Boosted Pools are a generalized primitive that saw their first adaptation and use case with major stablecoins in partnerships with Aave. In 2022, we are looking forward to adapting this primitive to other protocols and use cases.
In line with maximizing the symbiotic relationship between money markets and AMMs, we are very excited to be working with our partners to enable additional liquidity for LPs through the use of BPTs as collateral in money markets.
We are working with partners on the next iteration of our Managed Pools with DAO treasury management and index offerings in mind as the use cases for this pool type.
Our community expressed their opinion about how they would like to see the tokenomics of the protocol evolve. We are looking forward to implementing the community’s proposals on that front.
Last year we expanded our UI to encompass a productized experience for pool creation. This year we will work to expand upon this experience and showcase a broader set of the protocol’s features.
Year of the Balancer DAO
A Decentralized Autonomous Organization, or DAO, is a community of people making decisions together in a decentralized manner in which members’ ownership, management, and control are automated based on software.
The Balancer DAO is the community contributing to the development of Balancer Protocol. The community is made up of individuals that are interested in, interact with, and care about the future success of the Protocol.
Balancer DAO takes on several responsibilities across the Protocol and Community, including but not limited to:
- Community engagement, collaboration, communication
- Evaluating and allocating Balancer Grants
- Governance proposals and voting
- Managing/Initiating partnerships with other DAOs/Platforms
The ultimate goal for Balancer DAO is to become an autonomous and self-organized structure, working to unlock the full potential of Balancer Protocol.
BalancerDAO came to fruition in 2021; 2022 will be the year of the formation of Balancer subDAOs. SubDAOs are autonomous groups of contributors empowered by BAL holders to act independently in the best interest of Balancer, within a specific area, with clearly defined decision-making powers.
The motivation behind establishing the Balancer subDAOs is to manage DAO-related decision-making to facilitate execution, without the need for every initiative or decision of the DAO to be passed as a proposal.
Balancer Operations subDAO
Balancer Ops subDAO will focus on managing the administrative functions of the Balancer DAO. Ops’ main priority is creating robust processes that allow the other subDAOs to focus on their primary objectives.
Starting goals include but are not limited to:
- Establishing an onboarding process for new contributors/active community members.
- Defining a new compensation plan for existing and new members.
- Partnering with other subDAOs to document operating framework (approval model/scope/budget).
- Setting up a reporting scheme that will hold subDAOs accountable and provide transparency to the community.
Balancer Treasury subDAO
The Treasury subDAO provides guidance, research, and strategy for the Balancer DAO Treasury and ensures its use is optimized for the community. The Treasury team’s primary responsibility is to preserve capital and provide transparency of the DAO’s assets and their usage.
The Treasury subDAO goals include but are not limited to:
- Treasury swaps/ yield farming general investment rules and scope
- Establishing internal reporting needs
- Deciding on frequency and content of community updates
- Meta-governance — engaging the community in treasury decisions
- Future investment strategy
Balancer Partnership subDAO
Balancer Partnership subDAO created a framework and several objectives for the DAO to use as a north star. Intending to attract users, the Partnership subDAO leverages three main drivers:
- Economic Freedom
To increase user activity, three areas of interest have been identified:
- Short term: Increase awareness of the Balancer DAO and its structure; Achievable through interactions with strategic partnerships and “social DAOs.”
- Midterm: Expand on other competitive chains to increase the user base volume and achieve treasury diversification: this plan is executed following the Friendly Fork program.
- Long-term: Create a dedicated User Interface to help the user navigate the ever-expanding Balancer Ecosystem.
Balancer Marketing subDAO
The Marketing subDAO will focus on user retention and increased awareness of the Balancer DAO brand. Key focuses include:
- Growing all Balancer accounts’ Twitter following and engagement
- Leveraging interest around LBP launches
- Conducting AMAs
- Utilizing social DAOs partnerships created by the Partnership subDAO
Balancer Grants subDAO
The Grants subDAO is the continuation of the Grants Committee, just with a rebrand. The grants program will continue to empower and fund groups/individuals that want to build on the Balancer Protocol or support the development of the Balancer ecosystem. Further information on the Balancer Grants DAO can be found below.
The subDAO proposal is the culmination of hard work across the Balancer Community, specifically the Ballers. Ballers shaped the BalancerDAO’s vision through commitment, effort, and belief in the Balancer Protocol. The full proposal can be viewed here.
Balancer is an ecosystem, and success stems partly from projects building on top of it. The Balancer Grant program provides aid and funding to projects committed to supporting Balancer Protocol. To date, over 22 projects have #BuiltOnBalancer, seven of which are grantees, with one reaching mainnet in just under a year.
The current wave of Balancer Grantees will run until the end of January, with 32,500 BAL allocated towards grants building on Balancer Protocol. As Wave 2 concludes, the Balancer Grants subDAO shares learnings, grant results, and the next steps in their Balancer Grants: Wave 2 Final Report, as preparation for the third wave of Grants gets underway.
Liquidity Mining Program
Eight months ago, the Balancer Liquidity Mining Program launched to attract liquidity by targeting high priority Balancer Pools in changing market conditions.
As new projects integrate with Balancer Protocol and new Pools arise, the Liquidity Mining Committee is working to increase flexibility throughout the program. This increased flexibility will allow the Liquidity Mining Committee to “right-size” the incentives for respective pools. This change will ultimately lead to a better BAL per TVL allocation and spread liquidity across many places.
Liquidity Mining continues to be a program run by token holders and community members alike, representing a diverse group of stakeholders with a shared interest in Balancer’s long-term sustainability and growth.
Events and Conferences
Balancer is building out its 2022 schedule, focusing on strengthening the Balancer Community at industry conferences and events. In addition to increasing user engagement, the Marketing subDAO is increasing attendance at in-person events to fuel human interactions and show that behind the Balancer DAO there are individuals who work with passion and enthusiasm. Balancer Labs and Balancer DAO will be working together to sponsor, speak at, and attend most major conferences and events in 2022.
To kick off the event initiative, the Balancer Labs team and Balancer Community will be in full force at ETHDenver 2022. Expect to also see Balancer at the Avalanche Summit, ETHBarca, Paris Blockchain Week, DevConnect Amsterdam, Permissionless, ETHCC Paris, and DevCon and more. Balancer will also be sponsoring major hackathons in 2022 like HackMoney. If you are interested in Balancer sponsoring, speaking at, or attending an event, please fill out this form.
What has been achieved thus far is a testament to Balancer Protocol’s unparalleled versatility and dedication to the community.
The technology of Balancer set the foundation, but we would not be where we are without the people. Those involved in Balancer are intelligent, supportive, and kind. Their focus is to relentlessly improve Balancer Protocol & the Balancer Ecosystem.
We often hear that Balancer doesn’t have as much hype as other protocols, but hype is not what we are here for. We are here to build long-standing infrastructure for the permissionless economy.
Each year we will drive towards a new horizon. 2021 was focused on the technical foundation, 2022 will be focused on integrating this infrastructure. Balancer is not here to be recognized today or tomorrow, but to be used for a lifetime.
About Balancer Protocol
Balancer is an open-source protocol, automated portfolio manager, liquidity provider and decentralized exchange. Built on the Ethereum blockchain, Balancer offers new solutions to the problems on traditional and centralized exchanges. Developers leverage Balancer as a permissionless building block to innovate freely and create new treasury management systems. Balancer’s mission is to become the primary source of DeFi liquidity by providing the most flexible and powerful platform for programmable liquidity.
Communications from Balancer Labs OU are intended solely for informational purposes, and should not be construed as investment or trading advice and are not meant to be a solicitation or recommendation to buy, sell, or hold any tokens mentioned. All figures are estimated and unaudited unless otherwise noted. As a technology company, Balancer Labs OU provides access to software.