Is Balancer the Answer Layer 2s Have Been Searching For?
As a peer-to-peer distributed digital ledger, blockchain has become a revolutionary technology that has permeated every facet of our lives. However, blockchain is not without its own set of challenges. One of the biggest issues right now is the lack of interconnectivity between different blockchains.
For instance, you cannot connect with someone on Ethereum if you’re on Bitcoin. Layer 2 has taken a toll on blockchain interconnectivity. That’s why two blockchain companies are joining forces to address this problem.
Today, Balancer Protocol announced it has launched on leading Ethereum Layer 2 scaling solution Optimism to significantly reduce gas costs and scale DeFi liquidity. Ethereum’s challenges have led to prohibitive fees, creating an extreme barrier to entry for users of decentralized finance. Balancer’s technology launching on Optimism ensures DeFi liquidity provision with the scope for sustainable, scalable, innovative growth that is highly competitive in the L2 network.
“By launching on Optimism, Balancer is recognizing that it is a leading L2 solution. Its distinctive scalability, while inheriting Ethereum’s security, led to the recognition that it will enhance the user experience and propel growth. L2s show the promise of reducing transaction fees and network congestion, and we are excited to bring our technology to the Optimism ecosystem.” – Fernando Martinelli, Balancer Labs CEO & Co-Founder.
The front end of the Optimism deployment will be led by Balancer’s collaboration with Beethoven X. The cumulative expertise from both teams results in a DEX with the technical prowess and innovative capabilities needed to become a formidable player in the Optimism ecosystem.
Optimism supports all DApps in the Ethereum network by using a technique known as optimistic rollups. Optimistic rollups assume all transactions in the rollup are valid, thereby increasing Ethereum’s transactions per second and drastically decreasing fees – securing over $600 million in on-chain value.
Exceedingly expensive transaction fees, growing network congestion, and an inability to scale significantly stifle the growth of the $600 billion Ethereum network. Currently, Ethereum can only support around 30 transactions per second, resulting in the aforementioned issues.
“We are incredibly excited to see Balancer going live on Optimism. Balancer is an important DeFi building block and seeks to bring a more flexible trading experience to the ecosystem. Moreover, working with the excellent Balancer and BeethovenX teams represents an awesome chance to learn from decentralized governance ‘in the wild’–a journey that we recently began ourselves.” – Ben Jones – Chief Scientist at Optimism Foundation.
Balancer’s technological capabilities to slash gas costs, super-charge capital efficiency, and unlock arbitrage with zero-token starting capital paired with Optimism’s scaling solutions will help answer the demands of the fast-evolving DeFi environment.
About Balancer Protocol
Balancer is a community-driven protocol, automated portfolio manager, liquidity provider, and price sensor that empowers decentralized exchange and the automated portfolio management of tokens on the Ethereum blockchain and other EVM compatible systems.
About Beethoven X
Inspired by the work at BalancerLabs and built on the Balancer V2 technology, Beethoven X is a community-driven DEX and DeFi powerhouse on the Fantom network. Beethoven X has taken the foundations laid down by Balancer and iterated on this powerful technology to become one of the leading Decentralised Exchanges on the Fantom ecosystem.
Optimism is a leading open-source Layer 2 scalability solution for the Ethereum network. Backed by top venture capital funds such as Paradigm and a16z for a total valuation of over $1.6 billion, the solution offers users lower gas fees and higher throughput compared to the Ethereum mainnet. With an estimated on-chain value of $600 million, Optimism is the third-largest Ethereum Layer 2 by TVL.