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Breaking News: Coinbase Confirms DOJ Investigation Following Major Security Incident

How Balancer And Gnosis Will Make Ethereum Trades More Cost Efficient

Reynaldo Marquez
Reynaldo Marquez
4 years ago
2 mins read
Ethereum ETH ETHUSD

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Gnosis and Balancer Labs announced the deployment of the Balancer-Gnosis-Protocol (BGP), a new decentralized exchanged running on top of Ethereum. Felix Leupold, Software Engineer Lead at Gnosis, broke down some key points on the protocol and how it will help users to trade with better cost-efficiency.

The Balancer-Gnosis Protocol will converge two components, as part of the cooperation, Balancer’s second iteration Vault System and Gnosis price-finding mechanism. As Leupold explained, the BGP will protect users from Miner Extractable Value (MEV) exploits, but without losing on-chain liquidity.

MEVs are gaining more attention, as more solutions attend to tackle malicious strategies that mostly affect users. As Leupold said, traders on Ethereum’s network can “get rekt by miners and arbitrageurs” when these actors bundle transactions in order to manipulate prices. For example, front and back running, and transaction sandwiching. Leupold added:

BGP batches multiple trades per block and settles all of them at the same price. Ethereum is already batching transactions into discrete blocks so the notion of time-priority within a block is not meaningful.

Ethereum Users Will See The Biggest Benefit

The DEX will be rollout in stages, its Proof-of-Concept is live for developers on the mainnet, CowSwap Exchange. When fully deployed, users will leverage the Gnosis Protocol solution to execute trades after they have been batched, as shown in the image below. The transaction must be signed, collected by a “solver”, batched and sent via the Gnosis Protocol for final settlement with Ethereum’s DeFi ecosystem.

Ethereum ETH ETHUSD
Source: Felix Leupold Software Engineering Lead Gnosis

Leupold classified the BGP as a “breakthrough”. After years of development, the solution can “tap into the liquidity of any on-chain protocol” and leverage Flashbots’ tools to prevent a transaction to be sandwiched or affected by manipulation. In a press release, Fernando Martinelli, Balancer CEO said the following on the partnership:

By collaboration, we can out-cooperate the competition-traditional finance-and bring traders unparalleled decentralization, transparency, and value. We’re proud to bring two teams known for great engineering, Balancer Labs and Gnosis, together in this collaboration.

The “solvers” will compete to offer users the best prices. Also, they will have “same or better prices” than in other decentralized exchange protocols with “no need to estimate gas prices yourself”, as Leupold said. Martin Köpperlmann, Gnosis CEO, said:

MEV is a phenomenon currently extracting value of up to 1% of all DEX trades on Ethereum, with value going from users to miners or other arbitrageurs. With BGP, and in particular Gnosis Protocol v2, we built a trading protocol that protects users and makes sure the value stays with them.

Ethereum has been breaking all resistance in the past day. At the time of writing, ETH trades at $2727 after dropping from a new ATH at $2.733. In the daily chart, ETH has a 3.6% profit and a 61.4% profit in the monthly chart.

Ethereum ETH ETHUSD
ETH reached a new ATH in the daily chart. Source: ETHUSD Tradingview
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Reynaldo Marquez
Reynaldo Marquez

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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