The balancer has been providing sustainable liquidity for the Beethoven X automated market maker. Also, Beethoven X is a decentralized exchange on Fantom and the Ethereum layer-2 platform Optimism. It is in official collaboration with the Balancer DeFi protocol.
Balancer provides decentralized autonomous liquidity pools with more than just two tokens. This enables greater flexibility and more liquidity for protocols and traders that use it. In this article, you will learn how Balancer’s tech allows innovation in Beethoven X.
Benefits of Balancer – Beethoven X Partnerships
On July 22nd, Beethoven X explained how it leverages the Balancer protocol for sustainable revenue. The balancer is the base layer for Beethoven X. This means that the DEX can generate revenue even when volume and liquidity are low.
The music continues to evolve🎸🎻
How does a protocol ensure sustainable revenue when swap volume begins to decline?
The flexibility of @BalancerLabs technology allows for continuous innovation
A 🧵 pic.twitter.com/MlQT9BJG91
— Beethoven X (@beethoven_x) July 22, 2022
During bear markets, DEX volumes decline, and liquidity leaves the platform as crypto assets are sold. Furthermore, this affects the exchange’s swap volume and revenue generation. By harnessing Balancer’s flexibility, Beethoven X provides a fee accrual mechanism on Interest Bearing (IB) tokens.
Additionally, these IB tokens continually increase in value due to the underlying yield generation system. Staking token pools are also appreciated due to the accruing staking rewards.
Sustainable Revenue for IB Pools on Balancer
In January, Balancer discovered a smart contract that was collecting a fee based on an Ethereum IB token’s natural appreciation. 10% of the wstETH yield generated due to the rebasing design of the token was collected as a protocol fee, it revealed. wstETH is generated by the Lido staking platform.
Balancer Labs had stumbled upon a new source of revenue from swap fees. The fee mechanism is only currently present in Balancer metastable pools. However, it could be of benefit to DEXes such as Beethoven X.
“All you need is a veBAL gauge”
Beethoven’s highly anticipated Optimistic sophomore album is due to release.
Before the album drops, we thought we should dive into @BalancerLabs renowned musical composition – The $BAL wars!
A mega 🧵 pic.twitter.com/nqqpVJ17Ub
— Beethoven X (@beethoven_x) July 18, 2022
It added that any token implemented into lending or borrowing markets, or deposited into other yield-generating mechanisms, becomes interest-bearing. Boosted pools leverage IB tokens by creating more capital-efficient liquidity positions. This is achieved by wrapping idle liquidity into the IB token, it explained. IB pools, therefore, are capital efficient for users and protocols alike.
Balancer’s recent BIP-19 implementation has taken this a step further. It takes fees generated from interest-bearing “core pools” and uses them to direct BAL emissions into the same pools.