Welcome to the future of decentralized finance thanks to the Balancer V2 protocol. Over my next few articles, we will begin to break down what Embr is, as well as a technical overview of Balancer V2 and why it is so exciting to have this on Avalanche.
Embr was funded using the IFO model through Avaware.Network. This allowed for the initial capital needed for the project. A unique feature was that users could buy an NFT with claimable Embr attached to them – redeemable once the launch date arrived. NFT holders could claim 1,000 Embr! Another added bonus is that you can stake the NFT and earn $AVE.
Here is a quick overview of the features of Embr:
- Weighted Investment Pools – Weighted investment pools turn the concept of an index fund on its head. Instead of paying fees to managers that rebalance your portfolio, you collect fees from the traders. These traders rebalance the portfolio by following arbitrage opportunities. The Embr investment pools can contain up to 8 different tokens with any weighting possible – as compared to the typical investment pools that are a 50/50 split.
- Stable Pools – For assets that are expected to trade near parity (such as stablecoins), Embr utilizes the StableSwap AMM. These pools allow for larger trades of assets before encountering a significant price impact.
- Trade – Embr provides a Uniswap style trading experience. This allows for trading from one token to another. Behind the scenes, a Smart Order Router (SOR) intelligently sources liquidity from multiple pools in order to find the best available price from any given set of pools.
- Farm – You can earn Embr by staking your liquidity provider tokens!
- Initial Liquidity Bootstrapping Pool (LBP) – the LBP was not like a regular weighted pool. The price started high to disincentivize bots, front-running, and speculation. Over 24 hours the price decreased and the raised funds were transferred from the LBP into an 80%/20% Embr/AUSD weighted pool.
Next week I will aim to start breaking down what the original Balancer was and the improvements brought by the Balancer V2 protocol.