Balancer governance token goes live on mainnet
Balancer, an automated market maker similar to Uniswap, began distributing its governance token BAL today after launching its liquidity mining program on June 1. Each week 145,000 BAL will be distributed to liquidity providers who deposit assets onto the platform. Since LPs became eligible to earn BAL earlier this month, the total supply locked increased from $15 million to around $45 million today.
Why it matters
- As we saw with the Compound liquidity mining going live last week, this incentive mechanism can be incredibly effective in attracting capital. Now that the token is being priced, liquidity providers can gauge the yield earned and may rush to add capital.
- In the case of COMP, the frenzy to add capital to the platform had a direct effect on the price making it a top 25 most valuable asset. Already BAL has become the second-largest DeFi token with a market capitalization of $580 million (1.6 billion fully diluted)
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