Balancer and Aave launch next-generation DeFi pools

Balancer Labs has launched ‘advanced’ pools designed to maximise yields on capital deployed by DeFi investors.

The moment we’ve all been waiting for…

📢 Increased yields, greater capital efficiency, deeper liquidity. Aave Boosted Pools are here 🚀 @AaveAave pic.twitter.com/o6PbGsp7aj

— Balancer Labs (@BalancerLabs) December 15, 2021

“Typically, traders use no more than 10% of the liquidity deposited in AMM pools. This is because trade sizes are much smaller than the available liquidity,” Balancer said in Balancer’s blog.

The new product — Boosted Pools — enables idle funds to be placed in lending protocols to generate additional income.

According to the developers, most users will no longer need to spend assets on wrapping and deploying tokens such as DAI and aDAI. The related costs will be borne by arbitrageurs who are “sufficiently interested in this.”

Benefits of @AaveAave Boosted Pools
🚀 Deploy under-utilized liquidity into Aave to earn an additional yield
📈 Increased gains from money markets
💰Cost-efficient wrapping/unwrapping of tokens during a swap

— Balancer Labs (@BalancerLabs) December 15, 2021

Initially, unused liquidity from the new product can be directed into Aave pools. However, the developers say they plan to integrate other protocols over time — Compound, Yearn, Badger, Fuse, etc.

Back in February, Balancer Labs raised $5 million from Three Arrows Capital and DeFiance Capital through a direct sale of BAL tokens.