Gnosis and Balancer Labs announced the deployment of the Balancer-Gnosis-Protocol (BGP), a new decentralized exchanged running on top of Ethereum. Felix Leupold, Software Engineer Lead at Gnosis, broke down some key points on the protocol and how it will help users to trade with better cost-efficiency.
The Balancer-Gnosis Protocol will converge two components, as part of the cooperation, Balancer’s second iteration Vault System and Gnosis price-finding mechanism. As Leupold explained, the BGP will protect users from Miner Extractable Value (MEV) exploits, but without losing on-chain liquidity.
MEVs are gaining more attention, as more solutions attend to tackle malicious strategies that mostly affect users. As Leupold said, traders on Ethereum’s network can “get rekt by miners and arbitrageurs” when these actors bundle transactions in order to manipulate prices. For example, front and back running, and transaction sandwiching. Leupold added:
BGP batches multiple trades per block and settles all of them at the same price. Ethereum is already batching transactions into