Balancer Partners With Aave To Launch Boosted Pools – Cryptovibes.com – Daily Cryptocurrency and FX News
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Balancer Labs, an automated portfolio manager and liquidity provider, has successfully partnered with the leading DeFi lending protocol, Aave, to launch new boosted pools.
In a December 16 press release, Balancer Labs confirmed successful integration with Aave to increase LP yields via Boosted pools. The newly launched product will solve issues of decreased capital efficiency with yields on tokens deposited into Automated Market Maker (AMM) pools.
According to Balancer, traders utilize only 10% of liquidity on AMM pools since trade sizes are relatively smaller than the available liquidity.
Nevertheless, the new product will allow the remaining liquidity, often left idle, deposited into a lending protocol and earn additional yield.
While commenting about the new development, Fernando Martinelli, the co-founder, and CEO of Balancer Labs, said:
“The collaboration with Aave as the first iteration of the Boosted Pools launch is a natural fit and solidifies their place in the Balancer ecosystem. There are various levels of Boosted Pool innovations that lead to concrete results, deeper liquidity, more efficient integrations for liquidity, and higher yields.”
By design, AMM Pools hold wrapped yield-bearing assets that increase capital efficiency and improve the overall yield. However, the wrapping and unwrapping of these assets are often too expensive to swap.
In that case, AMM pools need a relayer to solve such issues.
Balancer Labs has integrated with Aave to create Booster Pools that will effectively reduce the cost of wrapping and unwrapping tokens during swapping.
Commenting about the new partnership, Stani Kulechov, founder and CEO of Aave, said:
“The collaboration with Balancer for the launch of Aave Boosted Pools is a prime example of incredible innovation happening in DeFi. I have been following Balancer’s V2 launch closely and Boosted Pools offer users deeper liquidity and more access to Aave. With the help of Balancer, we look forward to providing users a seamless earning experience.”
Before summarizing, Balancer Labs noted that the newly launched product would be a game-changer for traders and liquidity providers. According to Balancer, Booster pools will allow users to deploy a percentage of liquidity in lending platforms like Aave. As a result, users will earn more yields while keeping a smaller percent inside the pool for traders to use as liquidity.
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