Use Cases

There are two categories of users who can benefit from Balancer Protocol: liquidity providers ‒ who own Balancer Pools or participate in shared pools ‒ and traders ‒ who use pools to trade.

Liquidity providers can be really any holder of 2 or more ERC20 tokens like:

  • Portfolio managers who want to have controlled exposure to different assets without having to deal with complicated and/or expensive rebalancing procedures

  • Investors who have ERC20 tokens sitting idly in a wallet and would like to put them to work so they can effortlessly earn fees

Traders can benefit from the diverse set of pools, each subject to different slippage, fees and spot prices between any pair of their tokens. They can be:

  • Conventional traders seeking to exchange any token for another with the best return possible

  • Arbitrageurs seeking profit by levelling market inefficiencies between DEXs and even CEXs

  • Ethereum Smart Contracts seeking liquidity for a variety of other use cases such as liquidating positions in other protocols, trading on behalf of users of other platforms, etc.