DeFi protocol Balancer (BAL) unveils MetaStable Pools, joins forces with Lido to deepen ether (ETH) and staked ether (stETH) liquidity.
Balancer Launches MetaStable Pools
Balancer, a leading decentralized finance (DeFi) platform recently announced its partnership with Ethereum staking solution Lido (LIDO) to launch MetaStable Pools with joint pool incentives.
MetaStable Pools differ from the normal stable pools in the sense that they are a much better option for tokens that are highly correlated but not hard-pegged in prices. Considering this, MetaStable Pools are attractive for pegged tokens that gradually accumulate fees.
Notably, a major use-case for MetaStable Pools is that of “nesting” where it essentially nests other pools by holding their Balancer Pool Tokens (BPTs) to enable cheap swaps between their constituent tokens and those of the said nested pool – in a way that assumes all the component tokens were in a single pool.
For example, a MetaStable Pool made up of three different tokens such as DAI, USDC, and USDT and NewUsdStable tokens could be tapped to swap between NewUsdStable and any of the nested (DAI, USDC, and USDT) tokens.
The announcement adds:
“MetaStable Pools work well for tokens that gradually diverge in value. In the above example, StaBAL3-USD is highly correlated with the price of a US dollar, but the pool token grows in value as trade fees accumulate. Similarly, a MetaStable Pool with DAI and cDAI would work well, since the cDAI slowly grows in value as the underlying DAI is lent on Compound.”
The MetaStable Pools also enable users of Balancer to list less liquid assets and prevent diluting existing pools.
Balancer Allies with Lido for Liquidity Mining
The other part of the announcement is Balancer’s partnership with Ethereum staking platform Lido.
In concurrence with the launch of MetaStable Pools, liquid staking protocol Lido is launching a pool to enable trades between ether (ETH) and staked ether (stETH) to provide liquidity for stakers securing the Ethereum Network.
Notably, the pools will be co-incentivized with both LDO and BAL rewards to propel further liquidity and give users enough liquidity rewards to foster participation.
Already 2,500 BAL per week has been allocated to the pool with an additional 25,000 LIDO per week for the first month.
In related news, BTCManager reported on July 8 that Balancer had unveiled capital-efficient stable pools on Balancer v2.
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