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Balancer (BAL): How it works and where to buy it

Learn more about how Balancer works, why the BAL token is useful and where to buy it.

Andrew Munro
Andrew Munro

Updated

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Where to buy BAL Find BAL exchanges

BAL is the native token of Balancer.

Balancer is a permissionless, non-custodial automated market maker program. It aims to let people make deposits into liquidity pools, earn a cut of the fees from transactions that utilise that liquidity, and maintain the balance of their portfolio without additional costs.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade.
CryptocurrencyBAL
Circulating supply (approximately, as of August 2020)~7,200,000 BAL
Maximum supply100,000,000 BAL
TypeERC20
PurposeGovernance

What is DeFi? Read the beginner’s guide

How does Balancer work?

At its heart, Balancer is a series of liquidity pools. Anyone can create a new pool and add funds to an existing pool and then receive a cut of the trading fees.

There are two kinds of people who use Balancer:

  1. Liquidity providers. They create or add funds to liquidity pools to earn a cut of the associated trading fees.
  2. Traders. They take advantage of the concentrated liquidity offered by Balancer to perform faster, cheaper trades than they might otherwise. Other smart contracts in the DeFi ecosystem can also tap into Balancer’s liquidity pools.

While there are many liquidity aggregators in DeFi, Balancer sets itself apart by letting liquidity providers enjoy automatic rebalancing of their portfolios, of up to eight assets.

It also aims to attract more depositors faster through “liquidity mining,” which is essentially an incentive scheme to reward people with the BAL token when they provide liquidity.

The idea is that liquidity begets liquidity, and as these pools grow, they become more useful and start attracting more trading fees, which in turn drive even more growth and more usability.

What does the BAL token do?

BAL is a governance token. Its holders are allowed to practice governance rights on Balancer.

While not an inherently valuable function, this opens the door for the community to make decisions further down the line. For example, there may be a decision to reduce the maximum supply of BAL tokens, to curtail BAL token rewards or to start paying a cut of the liquidity pool profits to token holders.

It can also be bought and sold.

How to buy BAL

Here’s a step-by-step guide for one way of buying BAL. Note that there might be other options available, so you may want to compare cryptocurrency exchanges to find the one that’s right for you.

Name Product Deposit methods Fiat Currencies Cryptocurrencies
Binance Cryptocurrency Exchange
Binance Cryptocurrency Exchange
Bank transfer (ACH)
USD, AUD, GBP, EUR, RUB, TRY, NGN, UAH, PHP, CZK & 20+ more

304
cryptocurrencies

Trade an extensive range of reputable coins on this world-renowned exchange, popular for its high liquidity and multi-language support.

US residents: As of September 2019, US-based users can only trade USD on the American dollar onramp of Binance, Binance.US.
UK residents: In addition to normal crypto trading services, Binance offers margin lending. As this is a regulated activity which they are not authorised to offer in the UK, we advise you not to use this service. If you're interested in margin trading, see authorised providers.
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