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AMMs, or automated market makers, have been a mainstay of the quickly expanding DeFi sector.
Balancer, a leading digital market maker, has released version 2 of its protocol, which promises quicker speed, lower prices, and increased liquidity.
Balancer’s backend would have more effective routeing for trades by “Protocol Vault” in addition to redesigning the user interface. According to the website, this update would reduce petrol prices and result in improved pricing structures.
Gas prices are expected to be 40% lower in version 2 – a percentage that rises to 53% with internal balances.
Balancer Labs, the AMM’s research arm, also announced a collaboration with DeFi protocol Gnosis to provide traders with an improved user experience in terms of price, user functionality, and openness.
Automated market makers are essentially smart contracts that generate a liquidity pool of tokens, which are traded automatically through a programmable algorithm as opposed to an order book. This allows assets to be swapped automatically.
AMMs are part of the rapidly growing DeFi industry which, according to industry estimates, has grown eightfold since the start of 2021. The DeFi space has locked in more than $160 billion in assets as of Tuesday.
This year has seen many record highs for Balancer’s native BAL token as a result of positive protocol integrations, gas fee reimbursements, and an increase in DeFi trading activity. The speculation about a potential Coinbase listing has also led to BAL’s meteoric rise.
On Tuesday, the price of BAL was little changed at $67, with a total market capitalisation of $722 million. According to Coingecko, BAL is the 31st largest DeFi protocol by market value.