Balancer V3 Launches on Arbitrum with Aave Integration

Decentralized exchange Balancer has launched its V3 iteration on the Arbitrum blockchain, Ethereum’s largest Layer 2 network by total value locked (TVL).

Balancer V3 introduces 100% boosted pools, which route idle capital in liquidity pools to yield-generating platforms like Aave, DeFi’s biggest money market with over $32 billion in TVL.

The new feature boosts returns for liquidity providers while “keeping capital fully available for trading,” Balancer said in an X post, merging yield from lending markets and swaps and streamlining the yield farming process.

A new Hooks framework enables developers to create customized liquidity pools that automate yield strategies while improving risk controls.

“From dynamic fee adjustments to automated liquidity strategies, Hooks open endless avenues for optimizing on-chain liquidity,” Balancer said.

A StableSurge hook has been developed to defend stable asset pegs during periods of market volatility by automatically increasing swap fees for trades that increase liquidity pool imbalances.

Balancer is a veteran DeFi protocol whose TVL peaked at $3 billion during the 2021 bull market and has stabilized at around $1 billion since then. Its BAL token trades at a $120 million market capitalization and is down 23% in the past 30 days.

In a deployment proposal for Balancer V3 last month, Balancer said V3 “will enhance the existing DeFi infrastructure on Arbitrum and further contribute to the network’s rapid growth and expansion.”