As Balancer Protocol moves to decentralize and diversify its governance, it will use the Balancer Governance Token (BAL) to grant voting power. Alignment between governance token holders and protocol stakeholders is crucial for successful decentralized governance, and BAL tokens are the vehicle to drive this alignment. BAL tokens are not an investment; BAL token holders should be people who interact with the protocol in some way, are committed to its future development, and want a seat at the governance table.
Liquidity Providers (LPs) are the cornerstone of the Balancer Protocol. Liquidity attracts traders, trading generates fees, and pool profitability attracts more liquidity.
Early LPs take on more risk and opportunity cost, including contract risk and low initial pool profitability. We believe that these protocol users should get to participate early on in deciding how the protocol evolves. To this end, Balancer Labs proposed and implemented the Liquidity Mining program, in which Balancer governance tokens are distributed to LPs.
The maximum total supply of BAL tokens is capped at 100M; however, this does NOT necessarily mean that this cap will ever be reached. BAL token holders have the authority to decide if the distribution should end before hitting the cap.
This chart outlines the allocation amounts. More details below.
(Up to) 65M
Founders, Options, Advisors, Investors
Every week 145,000 BAL tokens, or approximately 7.5M per year, are distributed to Liquidity Providers. At this rate, it would take a total of 8.666 years to distribute the remaining 65M BAL before reaching the 100M cap.
25M tokens were allocated to founders, stock options, advisors, and investors, all subject to vesting periods.
5M were allocated for the Ecosystem Fund. This fund will be deployed to attract and incentivize strategic partners who will help the Balancer ecosystem grow and thrive. BAL holders will ultimately decide how this fund is used over the coming years.
5M were allocated for the Fundraising Fund. Balancer Labs raised a pre-seed and seed round. This fund will be used for future fundraising rounds to support Balancer Labs' operations and growth. BAL tokens will never be sold to retail investors.
For full transparency, the seed series price of one BAL token was $0.60.