DeFi Protocol Balancer Joins Arbitrum to Scale Liquidity and Reduce Gas Fees

Leading automated market maker (AMM) Balancer Protocol has announced that it has launched support on the Layer 2 scaling solution, Arbitrum.

Balancer Launches on Arbitrum

In a press release shared with CryptoPotato on Tuesday, Balancer noted that the move is an effort to “significantly reduce gas costs and scale liquidity.”

Arbitrum is a leading scaling solution within Ethereum’s layer-2 ecosystem that has managed to make a name for itself in the industry despite being a relatively new project.

The explosive growth of the DeFi market has attracted many investors, pushing the total value locked in the sector to a whopping $82 billion. However, the influx of people into DeFi has also caused gas fees to shoot over the roof, thus making it difficult for small traders to create, join, and exit pools. This, in turn reduces the chances of aggregating liquidity across several uniquely composed pools.

Solving High Gas Fees and Scalability Issues

To solve this problem, Arbitrum introduced its optimistic rollups that improve scalability while reducing gas fees.

The optimistic rollups remove the need for zero-knowledge proofs by changing the consensus mechanism. The network assumes all transactions are correct, allowing users to intervene only if one is incorrect rather than verifying all of them.

It also offers significantly higher transaction throughput compared to Ethereum, while cutting gas fees to near zero. With a strong focus on user accessibility, the system allows users to experience a convenient, fast, and secure service through Layer-2 technology.

With the recent integration, Balancer Protocol says it can now operate as “the ultimate flexible DEX,” and its users can trade on its app using Arbitrum.

Balancer Protocol’s Co-Founder and CEO, Fernando Martinelli, said:

“Arbitrum is a leading L2 solution, its distinctive features in scalability, especially compatibility with Ethereum, lead this industry to recognize that it will optimize the user experience and enhance growth. L2s show the promise of reducing Ether fees and network congestion, and we are excited Arbitrum is available to the Balancer ecosystem.”

Arbitrum’s CEO and co-founder, Steven Goldfeder, also expressed his enthusiasm for having Balancer onboard and he believes the AMM has an important role in building a robust DeFi economy.