Balancer V2 Comprehensive Interpretation: Development Roadmap, Partnerships, and Community Building

This article was published on ADN Community and organized by Distributed Capital.

Recently, the staff from Balancer and Gonsis answered some questions about Balancer V2. Below is the text version of the AMA, translated by ADN Community.

About the Vault Innovation in Balancer 2.0

Shi Khai: Next, we will discuss many aspects of Balancer 2.0: the functions of token economics, the development roadmap, partnerships, and community building. So, let’s get straight to the point.

Fernandao: Sure. First, thank you for inviting us, Shi Khai. I’m glad to participate in today’s program. Let me briefly talk about Balancer v2.

As you mentioned, Shi Khai, we finally launched v2 a few weeks ago, and the smart contracts and user interface were released around last week. Compared to the first version, the biggest change in the concept of Balancer V2 should be the idea of the vault architecture, which is very effective in aggregating liquidity in one place.

From a background perspective, Balancer v1 is similar to all the AMMs we have heard of, where each market is its own smart contract. So, if you have a pool in Balancer v1, you can check it on Etherscan, and you can see all the tokens in that pool are in that smart contract. So, to some extent, pools are isolated, and only the tokens in that pool can trade with each other.

Everyone knows that Balancer is very diverse in terms of asset composition and weights. So asset managers can choose the risk exposure they want. We have smart order routing, or SOR, which helps any trade get the best liquidity for a specific trading pair, and SOR can operate across different pools.

In Balancer v1, you needed a trading agent to access all these different smart contracts. And that was very expensive because you had to send tokens everywhere. So, suppose you want to swap DAI for ETH; if you use three different pools, you have to send DAI to all three pools and get ETH from all pools. The concept of a single vault in V2 is: although you are actually interacting with three different pools, you only need to send all tokens to the vault once and then take all tokens back from the vault once. The vault internally acts like a bank, completing all the accounting work. For example, the vault has X amount of DAI and X amount of ETH in Pool A; Pool B has Y amount of ETH. Then the vault simply reduces the balance of the pool slightly and returns those funds to the traders trading with those pools. This is interesting.

Another very positive consequence is that we can separate the AMM logic from the low-level accounting, meaning that if I trade with Pool A, Pool A must reduce the balance of ETH I purchased, and my ETH balance must increase, or I can get it from the vault.

We understand that there are many innovations targeting AMMs being developed now. We believe that this is just the beginning, and there will be many more innovations in the future. We see many ideas, like MooniSwap and Dodo, which have many different types of innovations, while Curve has different constants. This is just the start.

So our idea is that Balancer is scalable. Anyone can come to Balancer to create new AMM logic and embed it into the vault while utilizing all existing liquidity in the vault. Because it’s easy, for example, if you want to create a pool between the project token DAI, since Balancer already has a lot of DAI and USDC liquidity, anyone can buy and obtain the project token by directly sending DAI or USDC to the vault.

And the engine behind the vault will do a multi-hop, exchanging USDC for DAI and then DAI for the project token. However, if you query on Etherscan, you will only see USDC entering the vault and then the project token being withdrawn from the vault. This is much cheaper than the current situation where you have to interact with multiple contracts. If you want to do a multi-hop trade, you have to send tokens to contract A, send tokens to contract B, until you finally complete the trade. Therefore, we are very excited about Balancer v2 because it is a launchpad for AMM innovation. For example, we already have different types of pools developed by other teams. Our goal is to hope to become a foundational layer, an initial component that people can build upon. This is effortless for other teams innovating in the AMM space; for them, it’s like an out-of-the-box package.

The project has been audited by three reputable auditing firms: Trail of Bits, OpenZeppelin, and Sitora. We offer a 1000 ETH bounty for vulnerability information. So, when you use Balancer, your security will be greatly assured; there’s also the network effect, as I mentioned, we have liquidity from other pools. The only thing you need to focus on is the new ideas around AMMs.

And the coolest thing, which I want to mention before we move to the Q&A session, is that you can also build your own business model on Balancer. Developing on Balancer doesn’t mean you can’t have your own project token or set your own value accumulation mechanism for your project token. In fact, quite the opposite, you can insert a pool into Balancer, and every time a trade is executed, that pool will collect some protocol fees for your protocol. The pool can also receive a portion of tokens and then store them in a vault on behalf of your protocol or send them elsewhere. Therefore, any type of business model can be built on Balancer.

Shi Khai: Now, to help the audience understand better, can we summarize for different target groups? For example, users who want to execute trades and those who want to provide liquidity.

Finally, I want to say, as you mentioned, all developers will use Balancer as a prototype to develop their products. Then, for those who want to trade, they can save on gas costs and dynamic fees. For liquidity providers, Balancer also offers them better yields, and asset managers achieve higher capital efficiency, which I haven’t touched on yet.

About Dynamic Fee Pools and Asset Managers

Fernandao: First, let’s talk about dynamic fee pools and asset managers, which are very exciting aspects brought by Balancer v2. First is the dynamic fee pools. It is well known that the best way to charge fees is to change the exchange fees required by AMM based on volatility. Therefore, the greater the volatility of your currency pair, the higher the fees should be. For certain types of currency pairs, such as stablecoins, we can say that the volatility is very low; for example, Curve has a fee of 0.04%, while Uniswap has a fixed fee of 0.3%.

Balancer is more flexible, and our current idea is that we are collaborating with Gauntlet. Gauntlet is a very talented team that collects many different signals from the market: for example, how volatile a currency pair is, how other AMMs charge fees, the current annual yield and fees of a pool, gas prices, etc. They collect a lot of different information, and they have a nice model that analyzes what the ideal fee for a pool should be. Therefore, if there is significant volatility, they will increase the fees.

The benefit is that, for example, through an on-chain transaction, they raise the fee from 0.5 to 0.8, then all LPs in that corresponding pool will benefit proportionally. So, for someone who has $10, there is no advantage over someone who has a million dollars. Because after the fee increases, its distribution will also be optimized for everyone. This is something we are proud of. We have always maintained this inclusive spirit and egalitarian belief.

We want all LPs to be equal, regardless of how much they invest. Of course, whether dynamic fee pools can perform better than static fee pools and provide better annual yields is still to be proven. But I believe dynamic fees will inevitably be a better choice.

The second thing is asset managers. We all know that for AMM pools, most of the assets in the pool are excessive for facilitating trades. Suppose you have ETH and DAI, and their prices fluctuate up and down; you are actually just obtaining superficial liquidity, and the vast majority, possibly 90% of the liquidity, is never used in trades. Of course, this can be changed; suppose we currently see ETH going down. Then we will see DAI going down, becoming increasingly scarce, while ETH becomes more abundant.

So, in reality, you start to need that 90% DAI balance because as the price changes, you begin to consume the balance. But most of the time, you can actually use these idle assets elsewhere to earn some extra yield.

This idea is realized through our collaboration with Aave. We are leveraging Aave to establish the first proof of concept for asset managers. You have a pool, and most of the assets in that pool are actually borrowed on Aave, and all the APY generated by Aave will be returned to the pool and provide additional yield to them according to their share or the Balancer pool tokens they hold.

This is quite exciting. It opens up many opportunities and design space for other teams, like Yearn, Idle Finance, and Lido for ETH. Wherever you can get some extra interest or yield, Balancer can access it through asset managers.

Of course, it’s not just about extra annual yield; for example, the PowerPool team is building a specific type of pool where the tokens can be used for voting. So, imagine you have some governance tokens on Uniswap or Balancer v1. You actually can’t use them because they are locked inside the AMM. Now with asset managers, they can withdraw tokens at any time, use them, and then redeposit them. These are the two things that excite us a lot.

I don’t know if we can shift to Gnosis, but we do put users at the center. In my view, the idea of Balancer is great; it is flexible and simple for LPs. However, when it comes to trading, we are providing liquidity, but there is still a lot to be done and should be done. We see many issues regarding miner extractable value (MEV).

Like this issue, you may have been affected unknowingly. Because of miners, you may have lost a bit of money, and the Gnosis team has a great design to address this issue. We are working with them to integrate Balancer. We are responsible for liquidity aspects, while Gnosis takes care of the user experience and user interface for trading. Then we hope to combine each other’s strengths to provide the best trading experience in DeFi. Martin, maybe you can continue to talk about this issue.

About the Problem Solver

Martin: Sure. In fact, the two things we are most excited about in our collaboration with Balancer are the two points Fernando just mentioned. The most exciting thing about automated market makers is that basically ordinary people can become market makers and profit from it. In our view, Balancer is continuously moving down this path.

We incorporate the concept of flexible fee settings and asset managers to help ordinary liquidity providers increase their income without requiring them to do anything fancy or complex. So I think our philosophy is to enable ordinary people to become market makers. So, these are the two main driving factors that led us to decide to maintain close collaboration with Balancer, regarding the part we are involved in, which Fernando just mentioned—the issue of preventing miner extractable value (MEV).

The reality is that if you submit a transaction to the MemPool or miners on Ethereum, it is unfriendly. Miners are very openly trying to extract value from you. You send the transaction to them, and they will sandwich attack you. For example, if you want to buy a token, they buy the token at a cheaper price directly before you, forcing you to buy it at a higher price. After that, miners will sell to market makers, basically extracting profits from you. This is what we want to change, and we can do it.

We provide the concept of a problem solver. You no longer need to submit transactions to miners or the MemPool; you just need to sign a specific order, basically the trade you want to execute, and then hand the problem over to the problem solver, whose responsibility is to execute the trade in the best way. There are countless complex things to accomplish in between: optimizing gas fees, optimizing slippage, and trying to handle all the things users don’t want to do and might not be able to do. This is what the Gnosis protocol and Balancer are working on.

Fernandao also mentioned how to optimize a single transaction, where multi-hop transactions might occur behind the engine because it uses different pools. We can even go further because we can solve multiple transactions. Today, each Ethereum block can accommodate about 30 DEX transactions. So, if they go through the Gnosis-Balancer protocol, we can merge four or five transactions and settle them in one transaction; we can also maximize gas fee efficiency because we only need to settle one transaction after aggregation.

Suppose several traders buy token A, and several traders sell token A; we actually only need to perform token transfers on the vault contract as minimally as possible to complete all transactions. Clearly, any form of gas fee efficiency improvement is very important. Many traders spend 1%, 5%, or even 10% of the transaction value on gas fees, so any savings on gas costs will greatly help users derive more value from their trades.

Fernandao: Here I want to commend Martin; I am personally a fan of CowSwap. And in the future, soon, the Balancer-Gnosis protocol will allow your wallet to not need any ETH at all, resulting in zero gas fees. This is an amazing user experience. Anyone can get started immediately; you send DAI to a friend, and they can immediately trade what they want with DAI. They don’t need to have some ETH on the exchange and send ETH to the wallet to start using that wallet.

Martin: One of the challenges users face is that you submit a transaction, and if no miners take it, you need to set a higher gas price to resubmit, but it may still not succeed. And you still have to pay a large gas fee for a failed transaction. This is precisely the situation we are trying to eliminate. As a user, you only need to sign your order; you don’t need to pay any fees for signing this order. When the order is executed, you will pay a fee for the trade, but only if it is successfully executed. So, you don’t have to worry about this entire experience of paying for failed transactions; you don’t have to worry about “Do I have enough ETH in my account?” or how much gas fee to set. So this goes back to our initial statement. Our goal is to provide the best user experience for traders within this collaborative protocol.

Community Questions

Martin: My only question is, will these be the default settings? From the user’s perspective, how will it work?

Shi Khai: As a user, I also want to say a few words. In the past week or two, I have been using CowSwap extensively. Although it is still in Alpha, I must say I fell in love with it immediately. All I need to do is authorize which tokens I want to swap and then sign the transaction; it guarantees a certain price, and I only need to pay a small gas fee to execute the trade I want. And although I have to wait for execution, it executes very quickly, even for relatively large trades. I must say, among all DEXs, CowSwap (even in Alpha) has given me the best experience so far.

Martin: Yes, this is still an early product. So I just want to say CowSwap is still just our proof of concept, preparing us for a complete integration with Balancer in the end.

Shi Khai: Currently, it is still in Alpha testing, so what better features will it have in the full version? What is BGP, and how will it continue to evolve from its current state?

Fernandao: I want to add something very important. People might think that when they trade on Balancer, they are only using Balancer’s liquidity. Currently, in our user interface, you can only use Balancer’s liquidity. However, when we integrate with Gnosis, we will actually become an aggregator.

We will look at all sources of liquidity, not just Balancer v2, Balancer v1, Uniswap, or any liquidity source you can think of. In my view, it will be an aggregator providing the best user experience.

In fact, using liquidity from Balancer v2 is already cheaper, but if obtaining liquidity from elsewhere is more cost-effective, we will do the corresponding operations for you. Therefore, I want to clarify that trading on Uniswap and Gnosis does not mean you cannot use all the liquidity. I think this could be a continuous improvement process.

Martin: So let’s summarize; in the full version, we expect to see all the advantages of Balancer fully realized, our vault architecture, and low gas costs when settling with Balancer pools.

We also expect our advantage as a DEX aggregator to be fully realized, mobilizing liquidity from anywhere; better liquidity is always the priority. The interests of traders come first; they should get the best prices. Finally, we look forward to leveraging the advantage of zero gas fees to prevent miners from extracting value from users.

Shi Khai: Given that we have all the features provided by CowSwap, what exciting collisions will BGP (Balancer-Gnosis Protocol) have with DeFi? What is our goal?

Martin: CowSwap is currently a proof of concept, but in the integrated version, CowSwap or the Balancer-Gnosis protocol will have contracts written based on the vault. From Balancer’s perspective, all trades submitted through the Balancer exchange will go through this protocol. We are highly committed to this tightly integrated experience. Moreover, this is also possible for other projects. We are very happy to encourage other interfaces to provide users with zero gas, safety protection, DEX integration, low fees, and other advantages. So this is truly the ideal core DEX on Ethereum.

Fernandao: I also want to add that the more users there are, the better our product performs. And usually in DeFi, the situation is quite the opposite, isn’t it? The more users there are, the more congested the network becomes, and gas prices become more expensive. In this case, our situation is the opposite. The more users there are, the higher the chances of matching your demand. And this is basically the origin of the name COW—Coincidence of Wants.

Shi Khai: That’s fine. I just want to reiterate this meaning—while we are all saying how great CowSwap is, it’s not just CowSwap, right? Any DeFi developer can leverage the same logic and underlying protocols to develop any experience they want. I think this is the vision we are proposing here, a prototype and development module that anyone can use. Once it has this power, the more users it has, the better it becomes.

Fernandao: One more thing worth mentioning is that not only users but also the role of problem solvers is open to everyone. The more problem solvers there are, the more likely it is to find the best solution, and these people are solving a very complex mathematical problem. And the way to ensure you find the best solution is to let people compete. So many people need to do hardcore, off-chain calculations to find the best solution. Then, the person who finds the best solution for traders is the winner. Therefore, opening it up to anyone who wants to solve this mathematical challenge, and they can profit from it, I think is quite good.

Martin: Yes, I joked before that what we need to do is a DEX aggregator. Because there are already many DEX aggregators, you might want to check different DEX aggregators. It depends on the token you are trading; sometimes one DEX aggregator is better, and sometimes another DEX aggregator is better. Because this industry is evolving rapidly. There are many things happening.

So you don’t need to have a complete DEX aggregator; you don’t always need to have the best price. You can focus on one problem. If that problem arises, or that trade occurs, you win. The solution you submit will provide users with the best price. So this is another way to scale or create a truly best exit experience for users.

Shi Khai: I think what we are currently discussing is somewhat like decentralizing power to developers, like the problem solvers you mentioned. So there is a very core concept of encouraging people to participate and become owners and managers of the network.

Of course, there is also an important theme, which is the collaboration between Balancer and Gnosis, which is also part of a broader collaboration in the entire composability space. Where do you think this trend will lead?

Martin: I want to say that we look forward to seeing more composability and partnerships, or complementary relationships that make each other stronger. Fortunately, Ethereum is a perfect playground. Therefore, to some extent, forming these partnerships is actually very straightforward. Because Ethereum has provided building blocks, and we have BAL contracts. We can use BAL contracts to combine these building blocks to build a better house.

Fernandao: As Martin said, connecting things together and combining everything in an atomic way is so beautiful. This is something you cannot do in the traditional world. And in my view, it is clear that you cannot excel at everything. Balancer excels at being an asset management solution. And Gnosis nicely fills in our shortcomings in trading. Then, for example, Balancer may not excel at lending. Meanwhile, Aave, Compound, etc., are throwing out new features like Aave Pro and credit delegation. There are many new cool things, and we cannot provide so many innovations, so we must focus on AMM.

If you want to do everything, you will do nothing well. So I think the way forward is to unite the various parts within a broader ecosystem, maximizing user interests. So as Martin said, we should all collaborate, and Ethereum is a perfect platform.

Martin: To give a few more examples, even before we had plans, there has already been a lot of interaction between Gnosis and Balancer. For instance, we ourselves are heavy users of Balancer, providing liquidity and using some of our assets in liquidity pools.

So this is the case with our Balancer tokens. This is why we participate in governance; we love Balancer’s Snapshot, and we connect it to secure places. Therefore, there is a large list of projects that overlap and maintain good close cooperation.

Fernandao: Safesnap is also something we are collaborating on. Yes, we have a lot of collaborations.

Shi Khai: Great. Before we move into community questions, can I ask one more small question? In the next version of CowSwap, when we execute trades, will we keep the "Moooo"?

Martin: Maybe, we can look forward to future developments. Well, I can give a little hint. We will have a mini-game. If you submit a transaction, then before the transaction is successfully executed, you can play a mini-game about cows. We might keep that in the game. We will definitely play more cow-related jokes.

Shi Khai: Okay, now we must enter the community Q&A session, right? After all, today’s program is an AMA. So let’s officially start the Q&A session. I have a fairly long list, and I will skip some repetitive questions. Of course, our questions will mainly focus on Balancer v2.

Shi Khai: Can you share the similarities and differences between Balancer v2 and Curve and Uniswap v3? What are the advantages of Balancer v2?

I think this is a good time to make this comparison, as there are many AMMs and DEXs now, so what are the core differences? Of course, it doesn’t have to be a competitive relationship, right? It can also be cooperative. What do you think, Fernando?

Fernando: Balancer v2, Curve, Uniswap v3, I think we are all seeking to improve capital efficiency and provide users with the cheapest trades in different ways.

The benefit of Balancer v2’s flexibility is that it can have pools similar to Curve. In fact, we will soon launch this product, the Balancer stable pool, using the same constants and mathematical concepts as Curve. So I would say the main difference between Uniswap V3 and Balancer V2 is that we are trying to achieve capital efficiency in a different way. We are using the concept of vaults to complete multi-hop operations within the vault.

Balancer V2 tries to keep the idea that all LPs are equal. We aim to make the capital efficiency of the entire pool higher, while Uniswap v3 wants to have more specific LPs, which forces you to contribute liquidity in a more centralized way and then withdraw due to price movements. If you want to continue operating, you must withdraw your liquidity and then add liquidity again. So Uniswap V3 requires more maintenance.

Shi Khai: Another question is, what are the advantages and disadvantages of Balancer’s LBP compared to other TGA methods? And for some tokens that have already entered the secondary market, does it still make sense to use LBP for price discovery, or how can we further achieve better price discovery mechanisms?

Fernando: Good question. In my view, Balancer LBPs are a great way to conduct token sales because they avoid purchases from those bots. Once the sale or pool starts running, bots are the first to buy and then sell, leaving those who act more slowly as the ones left holding the bag.

This situation occurs in many Uniswap launch events. This is because Uniswap and regular Balancer pools operate the same way; to make the price go up, you have to buy. What LBP does is flip it, so the weights change, and the weight of a pool indirectly affects asset pricing.

Therefore, what LBP does is, to some extent, a Dutch auction; it starts at a very high price. If no one buys, the price will drop. Once someone buys, the price will rise, but as the weights keep flipping, the price will drop.

For example, Gnosis auctions, which I also appreciate very much. One benefit of Gnosis auctions is that all orders receive the same settlement price. So from this perspective, it is fair. However, one advantage of Balancer is that you have faster feedback. You can buy at the start of the LBP, and your account has tokens, allowing you to do anything you want without waiting for the auction to end.

Shi Khai: In v2, is it difficult to transfer liquidity from one pool to another without incurring gas fees like in version 1.0? For those already using Balancer, how will the migration from 1.0 to 2.0 and the migration between pools be accomplished?

Fernando: Good question. The benefit of Balancer v2 is that you can migrate your liquidity from one pool to another without having to withdraw those tokens from the vault. You can complete all operations using internal balances, such as withdrawing liquidity, adding liquidity, and trading.

Regarding the migration of liquidity from v1 to v2: unfortunately, there is no other way besides using our migration tool; it is a two-step process. You just need to unlock the BPT tokens, your share in the pool, and then the migration tool will automatically add it to the correct pool in the right proportion. It will do everything for you.

We will likely launch liquidity mining on V2. This is also a big topic. We will start liquidity mining on V2 next week. So if people want to participate in liquidity mining on v2, they need to start migrating. But this will not be an overnight process; it may last about eight weeks. So there is no need to panic. This will be a gradual process.

Shi Khai: Here I want to ask on behalf of our audience, can you share some specific dates or a timeframe with us?

Fernando: Sure, May 24. So today is the 19th. Next week, on Monday the 24th, we should have started distributing BAL tokens to liquidity providers for v2.

Shi Khai: What do you expect the ratio of non-arbitrage to arbitrage trades to be? Will Balancer become a DEX or AMM focused on high-frequency trading arbitrage rather than more retail-oriented?

Fernando: I truly believe that with the integration with Gnosis—namely, the Balancer-Gnosis protocol—this number will increase significantly. We will have more retail trades and more trading volume relative to arbitrage trades. But arbitrageurs will always exist, right?

Because if any liquidity rises or falls, or if there are discrepancies in Balancer, someone will trade. Sometimes it’s bots, and sometimes it’s just people who find better prices there. But I think due to the overall improvements in user experience and usability from Gnosis, I expect to see more retail trading, meaning once we fully integrate, the trading volume on Balancer-Gnosis will increase.

Shi Khai: For retail users, many are turning to alternative chains like BSC or layer 2 solutions, where fees are much cheaper and trades are much faster. Has there been any news about Balancer exploring ZK Rollup, and what are the latest developments regarding Layer 2? Also, are you considering deployment on Polygon?

Fernando: Yes, we are very likely to deploy on Polygon. Many people have been asking us if we have such plans. Balancer itself is about composability. We already have MakerDAO, Aave, and many partners. Therefore, we will deploy on Polygon. We are already discussing this with the Polygon team. There is currently no final deadline or expected date, but we are in communication with them. This is our short-term and mid-term scaling solution.

In the long term, it could be solutions like ZK Sync, ZK Porter, or ZK Rollup. There is no final decision yet. But this might be our preferred choice, although we may still try new things; this is not where we are currently focusing.

Marta: Here I want to add that, as you mentioned in another AMA, as a decentralized autonomous organization, we have a very large grant and bounty program. Therefore, if anyone in the community wants to port Balancer to any other kind of chain, they can apply for a grant.

If the community thinks this is something we need to do, you will get funding and then go implement it. I mean, anyone can do this; it’s not just Balancer Labs doing these developments.

Shi Khai: Another community member is interested in whether you are considering collaborating with teams like Synthetix or others to form bridges with real-world assets, as this could be a long-term development direction.

Fernando: Of course, we are not only discussing with Synthetix but also with MakerDAO. They place great importance on RWA: real-world assets, as they say. So I also believe this is the future. And our friends at UMA are also similar. They have a different approach than Synthetix.

I believe you will soon see DeFi stocks. Many ordinary things we see today in traditional finance will also appear in DeFi. But there will definitely be many challenges regarding regulation. We want to do this right. We want to change the world for the better. We cannot take shortcuts or do things that are against the government and in the dark.

Therefore, I think we must consider regulatory issues and communicate with regulators. One benefit of Balancer V2 is that it allows pools to only accept KYC and AML lists, so you can have permissioned liquidity. And these are all things we will discuss with institutions in the near future.

Shi Khai: The last question is about the direction of NFTs. I think this is largely about creativity. We see many art and game-related NFTs, and it could also be finance-related NFTs. We also see projects like Centrifuge or Uniswap having NFTs related to positions or loans. So, will Balancer consider similar products?

Fernando: That’s a good question. I think one very important step for NFTs is to make them fractionalized. There are some very expensive NFTs that are priced so high that a single entity can hardly afford them. We have seen this in many projects that fractionalize NFTs. And this is precisely where Balancer, as a platform, can play a good role.

I also think it’s possible to do something with complete NFTs. Complete artworks or songs, etc. I must do some research. Maybe this is also a good funding topic. How to create a pool that allows NFTs to trade using Balancer vaults. This is an interesting technical question.

Shi Khai: Can we talk about community building in a global context? How to build localized communities?

Marta: This is actually a very interesting question. Because based on the true spirit of open-source decentralized governance, I constantly see some actions initiated not by Balancer Labs but by those who love the Balancer Protocol and want to build their own local communities.

So undoubtedly, we have a very strong Spanish-speaking community. Therefore, not only in Spain but also Spanish speakers are producing a lot of articles and content. We also have a smaller community being built in Turkey. The US or English-speaking community is obviously the largest, but in some ways, I think it is not organized by language but by topics.

One group may be more interested in marketing or business aspects. Another group may be more interested in liquidity mining, and so on. So I think the interesting structure of a DAO allows anyone to form a subgroup. And no one defines what the subgroup must be; they can improve the protocol, build content for the community, or improve the community.

Community members can participate in the project in two ways: Baller Special Fund—a project-based fund where applicants can apply for grants and use the funds to fulfill their ideas. And the Baller Community is slightly different; it is more like a continuous effort. It is more for those who are truly passionate and excited about being part of the Balancer community. So it is not an extra paid job. The Baller Community seeks those who are passionate and can contribute long-term to the community.

You can also become a Baller in three or four months and demonstrate your dedication to the community and the protocol. After the period of community development, you can apply to become a Baller, and once the Balancer ecosystem fund is established, you will also receive certain rewards.

Shi Khai: What direction of projects does the Balancer ecosystem fund incentivize? Or what aspects can the Baller community work on? Should we also set some boundaries? Are there certain areas still led by Balancer Labs?

Fernando: In fact, when we launched V2, there was a partner called Gyroscope, which is using Balancer V2 to create this new stablecoin system. If you need some trading mechanism, you can come to us. Even if it’s not AMM, we can insert it into the Balancer vault. You just need to add liquidity, remove liquidity, and trade. If you are a developer, protocol, or project, feel free to contact us on Discord.

Marta, I think you can answer this question from the perspective of the Balancer community. We need proactive members from all over the world to participate in our community to complete expansion and innovation.

Marta: I think there are two ways to call for action. The first is to call on everyone to use Balancer and then provide some ideas. The community and Balancer Labs will make it better; it is a naturally growing project, and we don’t have a fixed roadmap. The second is if you have an idea to improve the Balancer protocol or create tools for the Balancer protocol, feel free to submit your ideas on our Discord.

Shi Khai: I’ve heard you mention Discord many times; I think I also have to mention WeChat. The Balancer WeChat community should now have hundreds of members, so it was actually just through group admin invitations.

Okay. I think today’s program is coming to an end. Everyone can follow Balancer’s Twitter account @BalancerLabs and the Chinese community’s Twitter @asiadefi, as well as Weibo ADN-Community.