Balancer Labs’ head of growth, Jeremy Musighi, announced at LisCon the official launch of the Balancer-Gnosis-Protocol (BGP). BGP combines the Vault architecture of Balancer V2 with Gnosis Protocol’s revolutionary price-finding mechanism. Balancer joins Gnosis to provide user benefits such as on-chain liquidity, MEV protection, better trading prices and optimized gas costs. Users can take advantage of BGP immediately as it is now the default when trading on balancer.fi.
BGP removes the need for an external market maker or liquidity provider, allowing users to save on gas costs, slippage tolerance and protocol fees. Miner Extractable Value, or MEV, refers to the measure of profit a miner can make through their ability to arbitrarily include, exclude or re-order transactions within the blocks they produce. To date, more than $730 million has been extracted from users by bots frontrunning transactions, exploiting the slippage users allow in a trade. The Balancer-Gnosis-Protocol leverages batch auctions with uniform clearing prices for all trades in the same batch, protecting traders from value extraction.
“Gnosis brings unparalleled transparency and value to DeFi, focusing on user experience and enhancing industry growth. The combination of these two protocols will allow users to obtain the best benefits of Gnosis and Balancer, such as gasless trading, better overall prices, and MEV protection” – Fernando Martinelli, Balancer Labs CEO & Co-Founder.
Balancer users are introduced to Gnosis’s price-finding mechanism based on gasless orders and smart order routing. Instead of sending an executable transaction with a predetermined execution path, users will now sign an off-chain message with their intent to trade. The additional third party executes trades, matching against whichever on-chain liquidity offers the best price.
“The collaboration with Balancer is a natural fit, the native integration of Balancer’s v2 architecture allows us to achieve even better prices for the end-users and provide a smooth UX across the two platforms. It’s an important milestone towards our mission to build an infrastructure layer that protects traders” - Martin Köppelmann, Gnosis CEO & Co-Founder.
About Balancer Protocol
Balancer Protocol allows for automated portfolio management and provides liquidity turning the concept of an index fund on its head: Instead of paying fees to portfolio managers, you collect fees from traders who rebalance your portfolio by following arbitrage opportunities. Developers leverage Balancer as a permissionless building block to innovate freely and create new treasury management systems. Balancer Lab's mission is to become the primary source of DeFi liquidity by providing the most flexible and powerful platform for asset management and decentralized exchange.
About Gnosis Protocol
Gnosis Protocol’s (also known as CowSwap) price finding mechanism is based on batch auctions, which allow for a few significant benefits for users, including MEV protection, better on-chain prices and gas optimizations. Instead of sending executable orders to the miners, traders send intents to trade to a set of professional third parties who compete with each other to find the most optimal settlement solution. These parties, the solvers, bundle trades into batches, which can offer MEV protection, off-chain liquidity matching and gas cost savings. Gnosis Protocol’s mission is to protect traders and offer fair prices by building the ultimate batch layer on Ethereum.