V2 in a Nutshell

What are the highlights of V2 compared to V1?

  • Protocol Vault for all Balancer pool assets

  • User Balances (like a personal "wallet" inside the Vault)

  • Improved gas efficiency

  • Flash Loans

  • Flash Swaps (arbitrage trading with no initial investment)

  • Custom AMM formulas

  • Capital efficiency through Asset Managers

  • Low-gas-cost and resilient oracles

  • Community-governed protocol fees

What are the core tenets of V2?

The core tenets of Balancer V2 are security, flexibility, capital efficiency and gas efficiency.

  • Secure — Extreme care was taken in guaranteeing the vault architecture keeps internal balances isolated among pools.

  • Simple — All interactions with Balancer V2 will be done through one single access point: the Vault. Only one token approval will be necessary for users to trade or invest liquidity in any Balancer pool.

  • Gas efficient — Trading against both standard and stable pools will cost a little over 100k gas, which is on par with Uniswap V2. Trades will cost even less if internal balances are used. Trading with many pools at the same time only marginally increases the gas costs.

  • Capital efficient — Pools can enable Asset Managers, which have full control over the underlying pool tokens they add to the vault. This opens up vast design space to improve capital efficiency and for other use cases like using underlying tokens to vote.

  • Flexible — Balancer welcomes other teams to innovate on top of V2, creating a thriving ecosystem and network effect. Grants and bounties will be given to contributors who create new successful pools.