- Balancer partners with Gauntlet to make dynamic fee pools a reality.
- The partnership aims to maximize returns for Balancer V2 Liquidity Providers.
As CNF was informed, Balancer, a programmable liquidity protocol, is partnering with Gauntlet to provide long-awaited AMM pools with dynamic fees to Balancer liquidity providers (LPs). The announcement comes shortly after Balancer V2 was announced and, along with V2, is expected to help maximize returns for Balancer LPs.
As the Balancer team points out in their announcement, this will be done at no additional cost and with no strings attached for LPs. In addition, Gauntlet will not be able to access or move Balancer users’ funds in any way.
What are the benefits of integrating Gauntlet?
Gauntlet is an on-chain risk management simulation platform that implements techniques from the algorithmic trading industry to help protocols manage risk, capital efficiency and rewards. To this end, Gauntlet has developed an optimization model for real-time fee selection of Balancer V2 pools.
The model provides parameter recommendations for trading fees and has integrated live data feeds to ensure that updated recommendations can be made in lockstep with market conditions. In addition, the model is continuously improved and has been tested under stress conditions.
Fernando Martinelli, CEO of Balancer stated:
It’s a privilege for Balancer Protocol and its liquidity providers to be able to tap on the galaxy brains of the Gauntlet team to maximize pool returns. The idea of dynamic-fee pools has been top of mind for Balancer for a long time. I believe fixed-fee pools won’t be able to compete with dynamic-fee pools just like taxis can’t compete with ride-sharing apps. It is better for all stakeholders for fees to constantly adapt to the market conditions.
As John Morrow, COO of Gauntlet pointed out, his company’s technology will be a core component of Balancer V2:
Balancer’s vision for their v2 pools is perfectly suited for our simulation platform. Dynamic fees allow Balancer to leverage our off-chain automation to improve on-chain LP returns. We’re looking forward to launch, but we’re even more excited for what comes after – our optimization platform gets smarter as we incorporate more live data.