Introduction

Balancer is an automated market maker (AMM) and decentralized exchange that reimagines liquidity by allowing pools of multiple tokens with flexible weightings. Instead of the classic 50/50 two-token pools, Balancer supports multi-asset pools and custom ratios, enabling portfolio managers, liquidity providers, and traders to optimize capital efficiency, reduce impermanent loss, and earn trading fees.

What makes Balancer different?

Balancer's core innovation is multi-asset, programmable liquidity pools with configurable weights and fee structures. Pools can contain any number of ERC‑20 tokens with arbitrary weightings (e.g., 60/20/20), auto-rebalance based on swaps, and act as self-balancing portfolios. This allows liquidity providers to passively rebalance holdings and earn fees while traders benefit from deep multi-token liquidity and optimized route swaps.

Key advantages

  • Multi-asset pools: Hold and provide liquidity across many tokens at custom ratios.
  • Automated rebalancing: Pools rebalance automatically when swaps occur, mimicking portfolio management.
  • Customizable fees & weights: Pool creators control swap fees and token weightings to suit strategy.
  • Capital efficiency: Reduce slippage with deep, weighted liquidity and concentrated pool designs.
  • Composable DeFi: Balancer pools integrate with strategies, vaults, and on-chain tools across DeFi.
Visit Balancer Balancer Docs GitHub

FAQs

1. What is Balancer DEX?

Balancer is an AMM that supports multi-asset pools with customizable token weights and fees, enabling flexible liquidity provisioning and automated portfolio rebalancing.

2. How do I earn on Balancer?

Provide liquidity to pools to earn trading fees and possible BAL incentives. LPs receive pool tokens representing their share of fee revenue.

3. Is Balancer safe to use?

Balancer's core contracts are audited and open-source, but risks exist. Use audited pools, review contracts, and prefer hardware wallets for large positions.

4. Can I create my own pool?

Yes — Balancer allows users to create custom pools with chosen tokens, weights, and fee parameters. Be aware of smart contract and liquidity risks.

5. What are impermanent loss and how does Balancer handle it?

Impermanent loss can occur when token prices diverge. Weighted multi-asset pools and fee income can reduce relative impact, but LPs should assess risks.

6. Where to find support?

Use the official docs, community forums, and Balancer’s Discord/Telegram channels listed on the site for help.