How to Buy Balancer (BAL)
Beginner’s Guide
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.
The protocol operates a few types of pools:
- Private pools give the owner governance over the pool, and make the person the sole contributor of liquidity to the pool. Also, all the parameters are mutable by the owner.
- Shared pools are for those who want to become liquidity providers (LPs). The LPs are rewarded with the Balancer Pool Tokens (BPTs).
- Smart pools are similar to private pools but are controlled by a smart contract. They also reward using BPTs and allow anyone to contribute liquidity to the pool.
How to Buy Balancer Summary
- Get a Balancer wallet (e.g. Ledger, Trezor , Exodus, Guarda, AtomicWallet)
- Find an exchange that sells Balancer (e.g. Crypto.com, Binance , Coinbase , Bitfinex , Kucoin)
- Deposit money and make the trade
- Withdraw the Balancer to your wallet
Buying Balancer in 3 Simple Steps
Step 1 – Get a BAL wallet
Balancer Hardware Wallets
Balancer, a decentralized finance (DeFi) platform, is primarily a software-based platform, but users can still secure their Balancer assets using hardware wallets. Hardware wallets are physical devices that store users’ private keys and provide a secure offline storage solution for their cryptocurrencies.
To use Balancer with a hardware wallet, users can connect their hardware wallet to a compatible software wallet or a Web3-enabled browser that supports hardware wallet integration, such as MetaMask or MyEtherWallet.
Some of the popular hardware wallets that are compatible with Balancer include Ledger Nano S, Ledger Nano X, Trezor One, Trezor Model T, and KeepKey. Users can store their Balancer assets securely on their hardware wallet, and access them only when they need to make transactions or interact with the Balancer platform.
When making transactions or interacting with Balancer, users can verify and sign them using their hardware wallet, which adds an extra layer of security to the process. This ensures that even if a user’s computer or phone is compromised, their private keys and funds will remain safe on their hardware wallet.
Overall, using a hardware wallet with Balancer provides an extra layer of security and peace of mind for users who want to store their Balancer assets in a secure and reliable way.
The best option for storing any cryptocurrency would be to use a hardware wallet. These are pieces of hardware that store the private key to your coins offline.
Today, there are two leading hardware manufacturers to choose from – Ledger and TREZOR. Both companies have different models of hardware wallets that will get the job done.
If you want deeper insights on specific models, you can read my Ledger Nano X review or my TREZOR Model T review.
Balancer Software Wallets
Balancer is a decentralized finance (DeFi) platform that allows users to create and trade customizable token baskets called “pools.” Balancer also provides a software wallet that users can use to store and manage their cryptocurrencies.
Balancer software wallet is a non-custodial wallet, which means that users have complete control over their private keys and funds. Balancer wallet supports various cryptocurrencies, including Ethereum, ERC-20 tokens, and other popular DeFi tokens.
To use the Balancer wallet, users need to connect it to their Web3-enabled browser or a compatible wallet, such as MetaMask or WalletConnect. Once connected, users can view their wallet balance, send and receive cryptocurrencies, and interact with the Balancer platform to create or trade pools.
One of the key features of the Balancer wallet is that it allows users to exchange one cryptocurrency for another directly within the wallet using Balancer’s automated market maker (AMM). This means that users can easily and quickly swap one token for another without having to leave the wallet or go through a centralized exchange.
Overall, the Balancer software wallet provides a user-friendly and secure way for users to manage their cryptocurrencies and participate in the Balancer DeFi platform.
Hardware wallets cost money, so if you’re not sure how serious you are about cryptocurrencies and just want to get a taste of what they feel like, perhaps you would be better off starting with a software wallet.
A software wallet is a free program that lets you store your coins on your computer or mobile phone.
The easiest Balancer coin software wallets to get started with are undoubtedly Exodus, AtomicWallet and Guarda . All wallets are very intuitive. Exodus, Atomic Wallet and Guarda is available on desktop for Windows, Mac and Linux, as well as on mobile for both iOS and Android. If you want more information you can read my Exodus, AtomicWallet and Guarda review.
Step 2 – Find an Balancer (BAL) Exchange
Buy Balancer through Crypto.com
- Crypto.com is a cryptocurrency exchange company based in Singapore. As of May 2022, the company reportedly had 50 million customers and 4,000 employees. The exchange issues a token, Cronos. The company was initially founded in Hong Kong by Bobby Bao, Gary Or, Kris Marszalek, and Rafael Melo in 2016 as “Monaco”. In 2018, the company was renamed as Crypto.com following a purchase of a domain owned by cryptography researcher and professor Matt Blaze. Domain sellers valued the domain at US$5–10 million.
Buy Balancer through Binance
- Binance is a cryptocurrency exchange which is the largest exchange in the world in terms of daily trading volume of cryptocurrencies. It was founded in 2017 and is registered in the Cayman Islands. Binance was founded by Changpeng Zhao, a developer who had previously created high frequency trading software.
Buy Balancer through Coinbase
- Coinbase is a convenient and cheap way to buy Ethereum and the platform is open to 200+ countries). Coinbase will sell you CRO for a variable fee that depends on your payment method (credit cards have a higher fee than wire transfers), order size and market volatility. Here’s how you buy Ethereum on Coinbase: Open a Coinbase account Add your payment method (Credit card or bank account) Go to “Buy/Sell” and select the amount of Ethereum you desire Click “Buy Cronos”
Buy Balancer through Bitfinex
- Bitfinex is a cryptocurrency exchange owned and operated by iFinex Inc registered in the British Virgin Islands.Their customers’ money has been stolen or lost in several incidents, and they have been unable to secure normal banking relationships. Bitfinex was founded in December 2012 as a peer-to-peer Bitcoin exchange, offering digital asset trading services to users around the world. Bitfinex initially started as a P2P margin lending platform for Bitcoin and later added support for more cryptocurrencies.
Buy Balancer through Kucoin
- Kucoin is a global cryptocurrency exchange for numerous digital assets and cryptocurrencies. Launched in September 2017, KuCoin has grown into one of the most popular crypto exchanges and already has over 8 million registered users from 700+ countries and regions. According to Alexa traffic ranking, KuCoin’s monthly unique ranking is in the top 5 globally. Known as the “People’s Exchange”, KuCoin operates in Seychelles, providing users with multi-language and 24/7 customer service. Meanwhile, KuCoin has established local communities all over the world in South Korea, Japan, Spain, Italy, Vietnam, Turkey, Russia, India, and other regions, providing users with the most local services. Currently, 1 out of every 4 crypto holders in the world is with KuCoin.
Step 3 – Withdraw Your Balancer (BAL)
Once you decide on an exchange, open an account and buy your Balancer. Make sure to withdraw the Balancer from the exchange to your personal wallet.
Never leave coins on an exchange, as you risk losing them all if that exchange gets hacked or shuts down (which has happened in the past) and always double check address before send coins because you can send the coins to wrong address .
OVERVIEW
Who Are the Founders of Balancer?
Balancer Lab was founded by Fernando Martinelli and Mike McDonald, but it began as a research program at a software firm “BlockScience” in 2018. The Balancer project features intelligent, like-minded fellows with an acute understanding of the DeFi space.
Fernando Martnelli, a serial entrepreneur and Maker community member, has many years of work experience outside of Balancer. He co-founded many other companies before he started Balancer with his partner, Mike McDonald.
Mike McDonald is the co-founder and CTO at Balancer. He is a security engineer and the creator of mkr.tools. He joined Fernando Martnelli to build the Balancer platform.
What Makes Balancer Unique?
Balancer is a unique decentralized finance (DeFi) platform that differentiates itself from other DeFi platforms in several ways. Here are some of the key features that make Balancer unique:
Customizable Pools: Balancer allows users to create customizable token baskets called “pools.” These pools can contain up to eight tokens and can have customized weights for each token, making it easy for users to create unique investment strategies or baskets that fit their specific needs.
Automated Market Maker (AMM): Balancer uses an automated market maker (AMM) system that allows users to swap one token for another without the need for an order book or a centralized exchange. This means that users can easily and quickly exchange tokens directly within the Balancer platform.
Liquidity Mining: Balancer incentivizes users to provide liquidity to its pools by rewarding them with BAL, the platform’s native token. Users can earn BAL by adding liquidity to pools or by staking their BAL tokens in the Balancer Liquidity Bootstrapping Pool (LBP).
Decentralized Governance: Balancer is governed by its community of token holders, who can vote on proposals to make changes to the platform, including changes to the fee structure, pool parameters, and other aspects of the platform.
No Platform Fees: Balancer does not charge any platform fees for creating or trading pools. Instead, the platform charges a small fee on trades within a pool, which is distributed to liquidity providers and BAL token holders.
Overall, Balancer’s customizable pools, AMM system, liquidity mining, decentralized governance, and fee structure make it a unique and innovative platform in the DeFi space.
Balancer is similar to Uniswap and Curve, in that it enables anyone to create pools of tokens. The pool adjusts itself to keep the tokens equally weighted regardless of changes in their price. However, one unique feature of Balancer is that more than one token can be added and ETH isn’t required.
Although, Balancer isn’t the first DeFi protocol to make use of AMMs, however, it has brought a new face and approach to liquidity. The unique feature of the protocol is that it allows Liquidity providers to have up to eight assets per market which are weighted by percentage and rebalanced automatically.
With Balancer, users don’t have to deposit 50% of the desired asset, but are allowed to decide how much of a supported asset they wish to deposit. Another unique feature of Balancer Lab is that users can make a high return on assets that are in low demand through arbitrage opportunities and slippage-reduction.
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?
The Balancer network is secured using a combination of decentralized architecture, cryptographic protocols, and community-driven governance.
Decentralized Architecture: Balancer is a decentralized platform that runs on the Ethereum blockchain. This means that the platform is not controlled by any single entity or centralized authority. Instead, it is run by a network of nodes and users who validate transactions and secure the network.
Cryptographic Protocols: Balancer uses a variety of cryptographic protocols to ensure the security and integrity of its platform. For example, the platform uses public-key cryptography to secure users’ private keys and prevent unauthorized access to their funds. It also uses multi-signature wallets and other advanced security measures to protect the platform’s assets from hacks and other security threats.
Community-Driven Governance: Balancer is governed by its community of token holders, who can vote on proposals to make changes to the platform. This helps ensure that the platform evolves in a way that is aligned with the interests of its users and that security concerns are taken seriously and addressed in a timely manner.
Audits: Balancer has undergone several security audits by third-party firms to identify and address any potential security vulnerabilities. The platform also maintains a bug bounty program that rewards users for reporting any security issues they find.
Overall, the combination of decentralized architecture, cryptographic protocols, community-driven governance, and ongoing security audits makes the Balancer network a secure and reliable platform for decentralized finance. However, as with any cryptocurrency platform, users should always take appropriate security measures to protect their own funds and private keys.
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