- Two of Ethereum’s leading DeFi protocols — Balancer and Gnosis, have announced a new business partnership.
- The combination of both protocols, will be called BGP (Balancer Gnosis Protocol) and will replace the current running infrastructure of Balancer.
Lead DeFi protocols — Balancer and Gnosis, Balancer Growth’s Head of Growth, Jeremy Musighi, announced today at Liscon, the official launch of Balancer-Gnosis-Protocol (BGP). BGP, to be specific, is a combination of the ‘vault architecture’ of Balancer V2 and the revolutionary price-finding mechanism of Gnosis Protocol.
The two collaborators hope to provide more benefits to users such as on-chain liquidity, MEV protection, better trading prices, and optimized gas costs. With this, users will be able to take advantage of BGP, which is now the default when trading on balancer.fi.
Balancer Labs CEO & Co-Founder — Fernando Martinelli, comments,
“Gnosis brings unparalleled transparency and value to DeFi, focusing on user experience and enhancing industry growth. The combination of these two protocols will allow users to obtain the best benefits of Gnosis and Balancer, such as gasless trading, better overall prices, and MEV protection.”
In detail, BGP removes the need for an external market maker or liquidity provider. Through this, it will allow users to save on gas costs, slippage tolerance, as well as protocol fees.
To note, Miner Extractable Value or MEV refers to the measure of profit that a mincer can make through their ability to include, exclude or reorder transactions within the blocks they produce. In fact, to date, more than &30 million has been extracted from users by bots frontrunning transactions and exploiting the slippage users allow in trade.
Moreover, BGP or the Balancer-Gnosis-Protocol leverages batch auctions with uniform clearing prices for all trades in the same batch, to protect users from the aforementioned value extraction, which is already active on the Gnosis CowSwap DEX.
Also expressing his delight on the collaboration, Gnosis CEO and Co-founder — Martin Köppelmann, said,
“The collaboration with Balancer is a natural fit, the native integration of Balancer’s v2 architecture allows us to achieve even better prices for the end-users and provide a smooth UX across the two platforms. It’s an important milestone towards our mission to build an infrastructure layer that protects traders.”
Furthermore, the users of Balancer will be introduced to Gnosis’s price-finding mechanism, based on gasless orders and smart order routing. Users will now sign an off-chain message with their intent to trade, instead of sending an executable transaction with a predetermined execution path. More so, the additional third party will execute trades that match against whichever on-chain liquidity offers the best price.