DeFi Dissected: A Simple Comparison of UniLend and Balancer

TL;DR:

  • Our DeFi Dissected article series aims to highlight the strengths of UniLend by comparing various key DeFi protocols
  • Both UniLend and Balancer enable users to permissionlessly add any Ethereum asset for liquidity provisioning, offer spot trading functionality, and have a community governance mechanism
  • UniLend also offers lending/borrowing, which Balancer doesn’t
  • UniLend enables users to tokenize assets which Balancer doesn’t
  • UniLend is a unique protocol, built from the ground up, that is capable of truly revolutionizing DeFi

New Bullish DeFi Data

As Bitcoin rockets towards 2017 all-time highs many investors are scrambling to better understand DeFi. Reports are showing that DeFi is merely taking a small break before gearing up for the next phase of growth.

A recent report shows that an average of 25,000 BTC is being wrapped daily. This generally occurs so users can take part in the DeFi space using their BTC holdings. Around 30,500 new contracts are also being created daily on Ethereum, suggesting developers are building at lightning speed (see Rochelle Guillou — On The Flipside). These points are important to acknowledge; even though certain crypto personalities have been suggesting DeFi is dying, the data suggests otherwise.

New contracts are usually created to initiate decentralized applications looking to serve a need in a growing market; these solutions require initial investors who invest based on data and analysis that indicate the need for these solutions. It’s apparent there’s a large interest in the DeFi space. New protocols are sprouting up with innovations the first-movers in DeFi hadn’t yet thought up. This is where this series, DeFi Dissected, comes in, to showcase UniLend’s new innovative advantages.

Many have requested more information about UniLend’s competitive value propositions. Today, therefore, we continue the DeFi Dissected series with a side-by-side comparison of the UniLend and Balancer protocols.

UniLend vs Balancer: Key Differences & Similarities

Balancer’s whitepaper describes the protocol as “an automated market maker with certain key properties that cause it to function as a self-balancing weighted portfolio and price sensor.”

Simply put, Balancer is a protocol created to mimic a decentralized crypto index fund, enabling you to collect fees from traders. Arbitrageurs rebalance your pool portfolio by taking advantage of arbitrage opportunities.

UniLend will also enable its users to create liquidity pools in a decentralized, permissionless manner that traders can use for arbitrage opportunities. Both of the protocols offer the ability to list any Ethereum asset, though UniLend is also exploring the addition of cross-chain support in the future, which, to our knowledge, Balancer isn’t currently exploring.

One of the main differences between UniLend and Balancer is that our protocol will offer lending and borrowing services. This will enable users to further engage in more sophisticated DeFi strategies. Unfortunately Balancer users are unable to lend/borrow, which means Balancer users will need to utilize a different protocol in order to take advantage of lending/borrowing functionalities. As previously emphasized, UniLend on the other hand is a one-stop shop for all your DeFi needs.

Furthermore, Balancer users are unable to tokenize assets, which presents a barrier to unlocking your tokens’ full farming potential. This isn’t an issue using the UniLend protocol, which will allow liquidity providers to get more out of the tokens they lend to the protocol via asset tokenization.

We’d like to commend Balancer for having a governance system in place, with a functioning governance token, which UniLend will also offer. In addition, we noticed some Balancer users think the protocol’s UX leaves users wanting. Although the UniLend protocol is not available to utilize just yet, we believe our user interface will be very intuitive and user friendly in comparison.

Note that we have a lot of respect for the Balancer team and project, we realize their large crypto community consider their DEX platform to be superior to others; we also agree, which is why we bootstrapped UFT liquidity, so it can be traded seamlessly on the Balancer protocol.

Conclusion: Onward to a New DeFi Paradigm

As we continue to expand the infrastructure to fully unlock the potential of decentralized finance, we hope you stick alongside us while we achieve our goals. During the ramp up to a fully decentralized launch, we’ll carry on with our DeFi Dissected comparison series, in hopes of educating our community so they’re ready to fully capitalize on our protocol’s extensive capabilities.

To stay in touch, and be one of the first to access these important observations, follow us on our social media outlets and keep an eye out for our future Medium articles.

The UniLend team would like to thank our community for your incredible support. We remain available to you should you have any questions. Don’t hesitate to reach out!

Website | Telegram Community | Announcements Channel | Twitter | Blog

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UniLend Finance

UniLend Finance

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UniLend is a Multichain protocol for Lending & Borrowing all ERC20 tokens permissionlessly. We are developing a Futuristic Base Layer for all DeFi applications.