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Balancer Protocol Launches on Optimism in Collaboration with Beethoven XWe are thrilled to announce that Balancer has launched on leading Layer 2 rollup network Optimism with the help of our […]
Balancer Protocol Launches on Optimism in Collaboration with Beethoven XWe are thrilled to announce that Balancer has launched on leading Layer 2 rollup network Optimism with the help of our frens at Beethoven X. Ethereum’s scaling challenges have led to prohibitive gas fees that increasingly exclude people from using the network to access decentralized finance (DeFi) applications. Optimism promises powerful improvements including additional scaling, smart wallet EOAs (no “approves”, pay gas in any token), and decentralization of the transaction sequencing operation.“With this launch, Balancer recognizes Optimism as a leading L2 solution. Its distinctive scalability, while inheriting Ethereum’s security, will enhance the user experience and propel DeFi growth. L2s show the promise of reducing transaction fees and network congestion, and we are excited to bring our technology to the Optimism ecosystem.” — Fernando Martinelli, Balancer Labs CEO & Co-Founder.We like to imagine a world where the DeFi ecosystem isn’t bogged down by well known network issues on Ethereum Mainnet. Balancer launching on the Optimism network ensures DeFi liquidity provisioning with the scope for sustainable, scalable, innovative growth that is highly competitive in the L2 network. The network’s total value locked (TVL) has grown significantly in the past few months despite the market. Optimism currently ranks as the third-largest L2 with around 13% Layer 2 market share. Optimism is the fifth chain on which Balancer is live, with the protocol also having launched on Ethereum, Fantom, Arbitrum, and Polygon.Beethoven’s Proposal Brings Balancer To OptimismAfter resounding support to the proposal made by the BEETS team in the Balancer forum, the front end of the Optimism deployment is led by Balancer’s collaboration with Beethoven X. — @optimismPBCIn October of last year, Beethoven X launched the first official Balancer friendly fork on the Fantom network. Since then, Beethoven Xhas actively been pushing the capabilities of Balancer’s technology to its full extent, developing a protocol that is now one of the major DEXes on Fantom. In light of the recent traction surrounding L2s and their opportunities for scaling, we felt it was an optimal time to take the next step and deploy on Optimism.ETH Gas Fees and Network CongestionEthereum’s expanding $600 billion network is faced with scalability restrictions, network congestion, and high gas fees.Currently, Eth’s transaction throughput leads to volatile and often expensive gas fees creating a high barrier to entry for the average user. With costs reaching up to $200 for ERC-20 transfers, ETH transactions are now more than 20X higher than most popular blockchains.Layer 2s Enter the SceneAs Ethereum continues to expand and evolve, the issues around scalability become increasingly apparent. Users interacting with DeFi protocols are well-aware of the effects this lack of scalability has caused — exceedingly expensive transaction fees. The inability to scale has hindered the network’s overall growth for both users and protocols, as the effects of network congestion and gas costs stifle progress.Layer 2 scaling solutions have been at the forefront for much of the development of ETH, tackling the aforementioned problems the network faces. ETH focuses on sharding to increase its transactional throughput while maintaining the overall security and functionality of the network. The development of L2s has seen promising results for the scaling while relying on the battle-tested security and decentralized Ethereum network.What is Optimism?Optimism is a Layer 2 scaling solution for Ethereum using a technique known as optimistic rollups, whereby multiple transactions are “rolled up” into one and settled on another blockchain, with records fed back to the main Ethereum chain.Optimistic RollupsOptimistic rollups assume all transactions in the rollup are valid, saving time since individual transactions aren’t submitted with direct proof of their validity.Rather than running all calculations and data on the ETH network, Optimism puts all transaction data on-chain and runs computation off-chain. This method increases Ethereum’s transactions per second and drastically decreases fees. As of March 2022, Optimism secured about $740 million of on-chain value.Balancer on OptimismThe Optimism launch will cement Balancer’s technology on a promising new chain. — @BalancerLabsOptimistic Numbers:Optimism currently has around $620 Million TVL on chain.Gas Fees are, on average, 96x less than on EthereumThe L2 conducts around 84,000 transactions per dayEcosystem monthly revenue caps about $2.2 millionBeethoven X will be taking charge in contract deployment, front end, infrastructure, and ongoing maintenance. The combined technical capabilities of Balancer x Beethoven X create a solution where economic principles are based on sustainable systems, positive growth hierarchies of regeneration, balance, and equality.Optimism IncentivesThe Optimism deployment will be plugged into veBAL gauges, so the underlying emission token will be $BAL. However, at launch, temporary incentives in the form of $BAL and $BEETS have been allocated until the gauge integration is complete. In March, Balancer launched a new tokenomics model in which veBAL holders vote via a gauge system to direct token emissions to certain Pools. Beethoven X has already committed 3M BEETS for incentivizing veBAL holders to direct emissions towards Optimism Pools.In addition, a proposal will soon be made to Optimism Governance for OP incentives. OP will be used as an additional incentive for $veBAL holders to direct emissions to Boosted Pools, to efficiently bootstrap AMM liquidity and lending markets on Optimism. The goal is to make Optimism Balancer’s primary network of operation and showcase the most advanced DEX DeFi has ever seen.https://medium.com/media/aa8e20f1d182780ed4ecdb5d5f2b7663/hrefClosing ThoughtsThe strategic decision to deploy on Optimism introduces our AMM technology to an entirely new ecosystem of Optimism users to ensure DeFi liquidity provision with the scope for sustainable, scalable, innovative growth that is highly competitive in the L2 network. By collaborating with Beethoven X, our communities can work together to shape the future of liquidity for DeFi. The innovation that Optimism brings to the table in terms of scalability, speed, and capital efficiency will foster the perfect environment needed for our Protocol to flourish.Stay in the LoopWebsite | Twitter | Discord| ForumBalancer is Now on Optimism! was originally published in Balancer Protocol on Medium, where people are continuing the conversation by highlighting and responding to this story.
