Balancer, a popular automated market maker for cryptocurrencies, has launched a new protocol feature designed to lower fees and improve the trading execution for like-kind waps.
Stable pools “are designed specifically for assets that trade at a similar price,” wrote Fernando Martinelli, the co-founder and CEO of Balancer Labs. As such, the pools increase capital efficiency for like-kind swaps, thereby offering traders tighter spreads and lower slippage. Liquidity providers, meanwhile, have the opportunity to earn a competitive yield.
Martinelli explained that, unlike traditional weighted pools, all tokens inside the Balancer stable pools are contained in a single vault:
“On Balancer, a trader can make trades that route through both pools at the same time with a very small increase in gas costs compared to a trade that routes through Curve and Uniswap for example.”
With the launch of stable pools, Balancer now has at least three different types of pools — the other two being weighted pools and the Element Finance integration