UNION Finance and Balancer DAO Advance Efforts
The leadership and communities at Balancer DAO and UNION Finance have made significant progress towards fully integrating UNION’s suite of protection services in support of their communities. Initially, UNION had agreed to build a micro-site that funneled its services back to Balancer’s protocol. Instead, Balancer DAO suggested a more comprehensive and seamless integration that would facilitate the deployment of UNION’s products across the Balancer DAO ecosystem. Both teams have started exchanging the necessary artifacts in order to assess how to expediently advance this valuable partnership.
Balancer is an automated portfolio manager, liquidity provider, and price sensor. As a leader in the crypto space, The Balancer Protocol is a core building block of DeFi infrastructure. Balancer is a protocol for on-chain asset management / auto-rebalancing on-chain liquidity pooling (e.g., running index funds). Liquidity providers supply a portfolio of at least two tokens and deploy their own Balancer contract where they deposit their tokens/assets. These tokens remain at all times under the owner’s control. Balancer protocol automatically rebalances the portfolio, maintaining the initial proportion of value held in each token. Balancer has meticulously studied how liquidity providers calculate their positions based on the price of ETH and liquidity pools. These calculations prove that the optimal arbitrage trades are determined by available ETH-DAI trading pairs. Balancer’s model of expected levels of arbitrage trading volume has become an industry standard.
UNION Finance is capable of providing Balancer DAO protection for Smart Contract Hacks, Exploits, and other DeFi Event Risks. UNION is a technology platform that enables DeFi participants to manage their multi-layer risks across smart contracts and protocols in one scalable system. UNION protections decrease the entry barriers for retail users and lay critical foundation for institutional investors. UNION’s full-stack DeFi protection is composable, allowing users (Liquidity Providers and Protection Buyers) to trade event risk in exchange for premiums and mining opportunities, and brings battle-tested capital and pricing models from TradFi to the DeFi ecosystem. UNION’s distinct products, governance model, and open ecosystem (no KYC) are accessible through UNION’s robust DeFi Protection Marketplace.
UNION is capable of deploying two protection products to the Balancer DAO Ecosystem: UNION Crypto-Default Swap (U-CDS) and Collateral Optimization/Volatility Protection (C-OP). U-CDS offers full coverage from event risks, including Smart Contract failures, exploits, and hacks. C-OP is used to reduce token price volatility and can be deployed in risk management scenarios to limit the impact of negative price movement. Additionally, UNION will spearhead an education campaign informing Balancer DAO members about the importance of protecting their funds and hedging risk.
“We are extremely excited to work with Balancer DAO and its Ecosystem and greatly appreciate the opportunity to extend our protection products to their community,” said Michael Beck, UNION’s Project Lead.
“UNION Finance provides the Blockchain Community essential expertise and technology that supports the development of our endeavors. We appreciate the role they play in serving and protecting the interests of stakeholders at this critical juncture. We value our ongoing collaboration with Union Finance and anticipate our joint efforts will generate significant benefits to our community,” said Andrea Cianfruglia, Project Lead at Balancer DAO.
Once crystalized, the integration of Balancer DAO and UNION’s protection products has potential to reduce the common frictions associated within DeFi and expand the retail and institutional markets. Final decisions will require careful consideration, but both entities are committed to creating significant value for their communities.
Balancer Protocol allows for automated portfolio management and providing liquidity turning the concept of an index fund on its head: instead of paying fees to portfolio managers, you collect fees from traders who rebalance your portfolio by following arbitrage opportunities. Developers leverage Balancer as a permissionless building block to innovate freely and create new treasury management systems. Balancer Lab’s mission is to become the primary source of DeFi liquidity by providing the most flexible and powerful platform for asset management and decentralized exchange.
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- This announcement is for informational purposes only and is not an offer to participate. It contains a number of forward looking statements about features and functionality, which may be subject to change or availability. As such, specifically, To-Be-Determined (TBD) features and functionality are expected available on the basis of future release schedules, priorities, technical considerations, and market realities.
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