Ava Labs’ bid to bring the automated market maker Balancer onto Avalanche appears set to go through, according to a vote snapshot on Monday afternoon.
According to a governance proposal submitted late last week, the two teams were seeking community support to deploy Balancer V3 on the Layer 1 blockchain, in a bid to expand Avalanche’s real-world asset ecosystem.
“Balancer v3 will bring to Avalanche's DeFi ecosystem unique innovations to further onchain liquidity provisioning for crypto native and real-world assets,” Ava Labs, the development company behind Avalanche, wrote.
Avalanche is a platform that enables users to spin up “sovereign, efficient and fully interoperable public and private” blockchains and decentralized apps. Launched in 2020 after several years of development led by Cornell computer science professor Emin Gün Sirer, the network has become one of the go-to blockchains for launching tokenized funds. Major financial players including BlackRock, Franklin Templeton and KKR have issued tokenized fund products on Avalanche. As of January, more than $7.3 billion total value is locked in real-world assets, marking a more than 200% increase from a year ago.
The Balancer V3 deployment would enable “immediate integrations with key Avalanche native lending protocols, like Aave and BENQI,” which, in turn, will boost yields for Balancer liquidity providers and increase overall protocol liquidity, the team wrote. “Avalanche's native DeFi ecosystem TVL has grown almost 2x in the past 7 months, bolstered by increased liquidity on AMMs and lending protocols."
Unlike other AMMs, Balancer allows users to create customizable liquidity pools with different weightings for different tokens and automatically rebalance their portfolios as prices fluctuate, essentially operating like a self-managing crypto index fund. By adding liquidity to a Balancer pool, users can earn fees from traders who use the pool to swap tokens.
Balancer V3 launched in December, and its TVL has steadily increased to just under $80 million. According to DeFi Llama, it has earned about $500,000 in annualized trading fees and saw $22 million in trading volumes in the past 24 hours.
The upgraded platform introduced a passive liquidity solution called “100% Boosted Pools” through a collaboration with lending protocol Aave. The integration enables pools to merge revenues from lending markets into single positions. It also uses “hooks,” a relatively new blockchain feature that facilitates customization.
While the Balancer vote received 100%, only three individual addresses participated. The integration with Avalanche is expected to finish by the end of March 2025. It will deploy on Avalanche’s C-Chain, or Contract Chain, designed to support smart contracts and applications. Last month, V3 launched on Arbitrum, the largest Ethereum Layer 2.
AVAX is among the top 25 tokens by market capitalization, with a value of over $7 billion, according to The Block’s price page.
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