What is Balancer?
Balancer is a decentralized exchange (DEX) built on Ethereum. It allows anyone with an Ethereum wallet to trade instantaneously at prices determined automatically by the market.
- Non-custodial: Trading with Balancer, you are always in possession of your assets; you don’t need to send your tokens to an exchange wallet like you would with a centralized exchange (CEX). Trades on Balancer are atomic. As a trade is executed, you will receive the token you’re buying at the same instant you send the token you’re selling.
- Decentralized: Balancer is built on a series of smart contracts, so the system is totally decentralized.
- Trustless: There are no admin keys or backdoors for someone to control who can use Balancer, what they can trade, or what the prices are.
Balancer is also an automated portfolio manager, liquidity provider, and price sensor that turns the concept of an index fund on its head. Instead of paying fees to asset managers to rebalance your portfolio, you collect fees from traders, who rebalance your portfolio by following arbitrage opportunities.
Why should I use Balancer?
Using Balancer as an exchange gives you trade prices that are decided by the market, not by a centralized exchange. You can also use Balancer as a Liquidity Provider (LP). Providing liquidity improves rates for traders, and LPs are rewarded for their contributions.