Introducing Balincer
The First AMM-Based Decentralized Margin Trading Platform
Since exploding in 2020, Decentralized Finance (or DeFi) has been gaining great attention and popularity, which can often be seen in mainstream media’s headlines. With the exponential growth, DeFi has recorded a total value locked (TVL) of $163 Billion with lending and DEX products taking up almost 90%. (via DeFi Pulse)
Lending and trading are two of the pillar businesses in the current DeFi space with the most TVL. However, they are practically isolated from each other, leading to extremely low capital efficiency. Rare lending protocols support sport or even margin trading and most DEXes don’t provide loans. Also, even though users get transferable and tradable deposit certificates after depositing in lending protocols, there are few platforms to actually facilitate the financial use of them.
Therefore, Balincer is developed to bridge the gap between lending protocols and DEXes, increasing capital efficiency in DeFi.
Welcome to Balincer
Balincer is essentially an open-source margin trading platform where you can lend, borrow and perform leveraged trading to either buy long/sell short an asset in just one place.
For lenders/borrowers, you can lend your idle crypto assets (including your deposit certificates from other lending protocols) to earn interest or use them as collateral to take out loans.
And for traders, after making a margin deposit in the margin pool, you will be able to open either long or short positions in a supported asset in Balincer with up to 5X leverage. The platform makes use of external AMMs like Uniswap to provide surplus liquidity for margin traders to open positions of any size.
Using Balincer, you can comfortably leverage your available capital for larger gains.
Market Problems
As mentioned above, according to our observation, the problems in DeFi mainly lays in the following aspects:
- Gaps between lending products and DEXes. The activities of borrowing and trading of assets often happen in two separate places. Users will have to go through a strenuous process of taking out loans from lending platforms first then to trade on their preferred exchanges.
- Inefficient utilization of users deposited assets. Usually, users will get tokenized deposit certificates after making deposits in lending protocols, such as aTokens from AAVE and cTokens from Compound. These tokens represent the value of their underlying assets, but can rarely be reutilized for investment or trading.
Rare DeFi products provide margin trading. Margin trading can effectively amplify traders’ gains. It’s popular in the traditional finance market and also has a huge demand in the DeFi space. Though there are a few protocols that offer this service, their liquidity is not enough.
Balincer’s Solution and Features
- Quick & Convenient Trading — Borrowing and trading are seamlessly integrated within Balincer. Traders can easily borrow and trade assets in just one place. Balincer also offers a visualized operation interface for position management.
- High Capital Efficiency — Other than native tokens, lenders can deposit AAVE’s aTokens and Compound’s cTokens to earn extra interest in Balincer. This makes double interest possible, as lenders can first deposit their assets in AAVE/Compound, then use the aTokens/cTokens they receive to redeposit in Balincer. Moreover, these tokens can also be used as collateral to take out loans.
- Margin Trading and Enormous Liquidity. Thanks to Balincer’s powerful margin pool, traders can easily open leveraged positions to either long or short an asset. In addition to WBTC and ETH, many DEFI and ERC20 assets like SNX, UNI and AAVE now can be shorted at Balincer. Furthermore, by relying on AMMs like Uniswap, Balincer can provide enough liquidity and reduce slippage for positions of any size.
Balincer VS CEXs
The advantages of Balincer over CEXes are as follow:
Balincer VS dYdX
Similar to Balincer, dYdX is also a decentralized exchange offering margin trading. Here is a competitive analysis of the two.
Final Notes
The project is being managed by experienced experts in the field of Blockchain development. As the first AMM-Based decentralized margin trading platform, Balincer serves as a pioneer to other decentralized exchanges. Also, with the innovative features and benefits that come with using Balincer, it is sure to lead DeFi to the next level and enrich the ecosystem.
Balincer is going to launch on Ethereum mainnet soon with code is being audited by SlowMist. Join Balincer community for more updates:
Telegram: https://t.me/Balincer_Global
Medium:https://medium.com/@balincer247
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