Is Balancer (BAL) A Good Investment?

Introduction

The Balancer is software running on Ethereum that seeks to incentivize a distributed network of computers to operate an exchange where users can buy and sell any cryptocurrency. 

An emerging decentralized finance (DeFi) protocol, Balancer uses a combination of crypto assets to provide this service, enabling trading without a financial intermediary like an exchange. It might help to think about Balancer as a kind of index fund, where users create funds based on the cryptocurrencies in their portfolios. These funds are known as Balancer pools, and any user wishing to provide liquidity to a pool can do so by simply depositing an asset in them. 

How does Balancer work?

The fundamental building block of the Balancer Protocol is the Balancer Pool. Balancer Pool can be viewed as an automated, market-making portfolio. Each token asset has an independent weight and can be traded against other tokens in the pool. For example, you could have a pool with three tokens in the following proportions: 50% DAI, 25% SUSHI, and 25% WETH.

The concept of a Balancer pool is to keep the value function of the pool’s weights and balances to a constant. If the relative prices of the tokens change, the pool as a whole is continuously rebalanced to maintain each token's proportion of the total value. 

Each trade that occurs in a Balancer Pool generates a fee for the pool owner. The fee is a percentage of the trading volume and is adjustable by the pool owner when the pool is created.

The Balancer has a few pools available:

1. Private Pools - Private pools are completely controlled by the owner. Only the owner can contribute liquidity and has full permission over the parameters of the pool.
2. Shared Pools - Creators of shared pools only have one opportunity to permanently set the pool parameters including the number of tokens, weightage, and trading fees. The creator doesn’t have any special privileges over the shared pool and anyone may contribute liquidity to the pool. The ownership of the pool’s liquidity is tracked by a specific token called the Balancer Pool Token (BPT).
3. Smart Pools - Smart pools are a variation of private pools where a controller is a smart contract, enabling arbitrary logic to determine how parameters can be adjusted. Anyone may contribute liquidity to a smart pool and asset ownership is tracked by BPT. 

Financial Analysis:

The Balancer price today is $23.21 with a 24-hour trading volume of $25,747,348. BAL's price is down -1.0% in the last 24 hours. It has a circulating supply of 11 Million BAL coins and a total supply of 45.3 Million. At the time of writing this post (Oct 17, 2021), Bal's Return On Investment (ROI) over the past year was 65%, exceeded in 'Decentralized Exchange Token (DEX), Polygon Ecosystem, Near Protocol Ecosystem, Automated Market Maker (AMM), Yield Farming, Decentralized Finance (DeFi), Governance, Exchange-based Tokens' categories which had 0% growth over the past year. It's exceeded crypto market which had 0% growth over the past year.

Projects with public Github account have more transparency and reliability. Regularly, investing in projects with multiple contributors and commits is considered a safer and better investment (this means they are busy working and building the project). According to its Github account, there are Five Contributors to the development of BAL.

Over the last five months, Bal's Market Capitalization rank followed an overall declining trend, starting at the price of $22.22 - $21.71 on July-Aug 2021, reaching $23.08 in Oct 2021. However, by the time of writing this post, BaI's market cap rank is about 262, and its value is $250,006,347 Billion.

You are saying that Balancer (BAL) is the best cryptocurrency to invest in?

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