UNION Finance announced this Monday, February 28, via its Twitter account, its integration with Balancer DAO, making significant progress towards fully integrating UNION’s suite of protection services in support of Balancer communities.
“The leadership and communities of 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 create a microsite that would funnel their services back to the Balancer protocol. Instead, Balancer DAO suggested a more complete and seamless integration that would make it easier to deploy UNION products throughout the Balancer DAO ecosystem. Both teams have begun to exchange the necessary artifacts to evaluate how to conveniently advance this valuable partnership”, he said through an article published on the Medium platform.
The company explained that Balancer is an automated portfolio manager, liquidity provider, and price sensor. As a leader in the crypto space, The Balancer Protocol is a core component of the DeFi infrastructure. Balancer is a protocol for on-chain asset management/automatic rebalancing in on-chain liquidity pooling (eg running index funds).
In his opinion, liquidity providers supply a portfolio of at least two tokens and implement their own Balancer contract where they deposit their tokens/assets. These tokens always remain under the control of the owner. The 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 demonstrate that the optimal arbitrage trades are determined by the available ETH-DAI trading pairs. Balancer’s model of expected levels of arbitrage transaction volume has become an industry standard.
Furthermore, he highlighted that UNION Finance can provide 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 through smart contracts and protocols in a scalable system. UNION’s protections lower the barriers to entry for retail users and lay a critical foundation for institutional investors.
The firm highlighted that UNION’s full-stack DeFi protection is composable, allowing users (liquidity providers and protection buyers) to exchange event risks for premiums and mining opportunities, and brings pricing and capital models. battle tested from TradFi to the DeFi ecosystem. UNION’s various products, governance model and open ecosystem (no KYC) can be accessed through UNION’s robust DeFi Protection Marketplace.
“We are very excited to be working with Balancer DAO and its ecosystem and greatly appreciate the opportunity to extend our protection products to their community”, said Michael Beck, UNION Project Leader.
Similarly, Andrea Cianfruglia, Project Leader at Balancer DAO, commented that “UNION Finance provides the Blockchain community with essential expertise and technology that support the development of our efforts. We appreciate the role you play in serving and protecting the interests of our stakeholders at this critical time. We value our continued collaboration with Union Finance and anticipate that our joint efforts will deliver significant benefits to our community”.
It is worth noting that, once crystallized, the integration of Balancer’s DAO and UNION protection products has the potential to reduce common associated frictions within DeFi and expand retail and institutional markets. Final decisions will require careful consideration, but both entities are committed to creating significant value for their communities.