Why does a deployment on Moonbeam make sense for Balancer?
Balancer Labs has been exploring experimental deployments of the Balancer protocol to alternative Layer 1 blockchains by offering grant funding to developer teams in a decentralized effort to expand the Balancer ecosystem. The Balancer team recognizes that the Polkadot ecosystem is growing and that there are a growing number of assets in it that could provide interesting use cases to explore outside of Ethereum.
“The Balancer Ecosystem Fund deploys capital to projects that create unique value for the Balancer protocol and community,” says Jeremy Musighi, Head of Growth at Balancer Labs. “ Supporting PureStake and Parity Technologies is a great opportunity for us to explore and learn from how the Balancer protocol can benefit from the unique trade-offs of the Polkadot blockchain. We welcome the opportunity to support this decentralized effort to take the first steps towards building on-chain liquidity for assets in the Polkadot ecosystem.”
Moonbeam’s deep Ethereum compatibility including a full EVM, Web3 RPC, and compatible accounts means that there are minimal changes needed to their existing codebase to create a Polkadot-based deployment. It also means that all of the same tools and services, such as Solidity, Truffle, and MetaMask can be used as part of the Moonbeam-based deployment. This ability to leverage the existing codebase, tools, and services means that the same infrastructure powering Balancer’s Ethereum-based implementation can be used to power both their Ethereum- and their Moonbeam/Polkadot-based deployments.
Substrate is the underlying Rust-based framework that is used to create parachains on the Polkadot network. By creating Balancer on Moonbeam, Balancer is able to leverage Moonbeam’s underlying infrastructure including our Substrate-based parachain implementation, our collators, our connection to the Polkadot relay chain, our integrations with other Polkadot based chains to bring assets to Moonbeam, among other things. This dramatically simplifies the implementation of Balancer on Polkadot as compared to a native parachain-based implementation. However, a deployment on Moonbeam does not preclude a future parachain-based deployment should the scalability and control that a parachain provides be needed.
Why does a Balancer deployment make sense for Moonbeam and Polkadot?
A Balancer deployment on Moonbeam is part of a broader DeFi story on Polkadot. We are seeing significant adoption and activity in the DeFi space on Moonbeam and on Polkadot. Some teams are building DeFi-focused parachains, while other teams are building on platforms like Moonbeam. Finding a less expensive and more scalable environment is a key motivation for many of the teams. But scalability is not the only driver.
DeFi projects want the company of other DeFi projects. In fact many DeFi projects depend on and compose with other DeFi protocols. So they are looking for places that have lower costs, but that also have a rich set of assets they can work with and protocols that they can integrate and compose with.
In this context, Balancer as a protocol provides an important set of building blocks for developers where they can create composed applications on Moonbeam, the same way they would on Ethereum. They join other DeFi protocols such as SushiSwap, IDEX, Linear Finance, and others that are building on Moonbeam. We are currently engaged with many more Ethereum-based DeFi protocol teams and expect more teams to follow Balancer in coming to Polkadot via Moonbeam.
But we shouldn’t also forget that a Balancer deployment adds significant end user utility to both Moonbeam and Polkadot. It provides useful DeFi services for investors looking to create investment portfolios consisting of Polkadot-native assets and who are looking for yield on those portfolios. It also provides trading and arbitrage opportunities for traders that will earn fees by helping keep portfolios balanced. And last but not least, it provides a way for teams to bootstrap liquidity for their project. These are all very valuable services that the growing ecosystem of Polkadot native assets needs.
“This integration is a great fit for both Moonbeam and Polkadot,” says Derek Yoo, CEO of PureStake. “Moonbeam serves as an easy way for Ethereum-based projects like Balancer to expand their protocol to the Polkadot network and all the networks connected to it. And Moonbeam developers will be able to compose with and incorporate Balancer into their applications”.
The Team Implementing Balancer on Moonbeam
The initial implementation effort for Balancer on Moonbeam will be led by Parity, the company developing Substrate and that developed Polkadot, with support from the Moonbeam team. Parity will perform the initial porting and verification that Balancer is working as expected on Moonbeam. However, while Parity will bootstrap the process and do the initial work, we are looking for developers or for a team that is interested in maintaining the Balancer protocol on Moonbeam beyond this initial porting effort. This team will be supported by grants from both Balancer and Moonbeam.
Balancer will be providing $10K worth of BAL tokens and Moonbeam will be providing 10K GLMR tokens (0.10% of genesis supply) as a grant to support the long term team and to provide initial liquidity to the system.
If you are interested in engaging with Parity, Moonbeam, and Balancer to create and maintain Balancer on Moonbeam / Polkadot, please complete a grant application: https://moonbeam.network/community/grants/.
Welcome Balancer
We welcome Balancer to the Moonbeam and Polkadot DeFi ecosystem and look forward to working closely with Parity and the long term team to support bringing Balancer to market with Polkadot-based assets and use cases.
Balancer’s Programmable Liquidity is Coming to Moonbeam and Polkadot was originally published in Moonbeam Network on Medium, where people are continuing the conversation by highlighting and responding to this story.
