In my previous article I talked about composability hypothetically, and wanted to show a concrete example to help you understand the concept.

Balancer, a company I work at, is a decentralized exchange like Uniswap, but with much more flexibility and cutomisability. While Uniswap only allows 50/50 pools, Balancer allows highly configurable pools of many different assets in many different ratios, and even allows changing those ratios over time.

This changing ratios is an interesting upgrade, but it's kind of useless by itself, no normal pool would want to change its ratio of assets. So how did this feature become one of the biggest upgrades to DeFi?

There is a problem in DeFi - launching a new token sucks:

• You have to guess a good market price for your token.

• You have to provide a ton of capital as liquidity with your token.

• If the launch is big, bots will immediately buy it up to re-sell at inflated prices

• There are massive gas wars to acquire the token on launch (and slippage causes many of these people to lose money).

A company called Fjord Foundry (previously Copper Launch) solved this long standing problem, using Balancer's technology, by creating a "Liquidity Bootstrapping Pool" (LBP):

• This LBP is 99% your token, 1% ETH (or USD), this lowers your initial capital requirements by 98%.

• Over the course of a week the pools ratio changes from 99% / 1% to 50% / 50%. This creates artificial sell pressure on your token throughout the week, and makes it start at the highest natural price. This stops bots from being able to front-run the sale.

• As the price is lowering all week, users can buy at any point with an equal change of succeeding, they don't have to buy at any specific point of time, which eliminates the gas wars.

• At the end of the week the token will settle on a fair market price based on what people bid for it, so you don't have to guess the ideal initial market price.

Why did Fjord Foundry build using Balancer's pools instead of making their own? It's a huge time saver! Because Balancer had already done the hard work building and auditing their smart contracts, and they work so well with the rest of the DeFi ecosystem.

All Fjord Foundry had to do was build the UI and a few additional systems / contracts for their token launch platform.

They also know (from reading the code) Balancer has no centralized control over these smart contracts. They can't block Forge Foundry or add additional fees, and they won't disappear if Balancer goes bankrupt. This creates a reliable, durable playing field for financial experimentation the world has never before.

In my previous article I talked about composability hypothetically, and wanted to show a concrete example to help you understand the concept.

Balancer, a company I work at, is a decentralized exchange like Uniswap, but with much more flexibility and cutomisability. While Uniswap only allows 50/50 pools, Balancer allows highly configurable pools of many different assets in many different ratios, and even allows changing those ratios over time.

This changing ratios is an interesting upgrade, but it's kind of useless by itself, no normal pool would want to change its ratio of assets. So how did this feature become one of the biggest upgrades to DeFi?

There is a problem in DeFi - launching a new token sucks:

• You have to guess a good market price for your token.

• You have to provide a ton of capital as liquidity with your token.

• If the launch is big, bots will immediately buy it up to re-sell at inflated prices

• There are massive gas wars to acquire the token on launch (and slippage causes many of these people to lose money).

A company called Fjord Foundry (previously Copper Launch) solved this long standing problem, using Balancer's technology, by creating a "Liquidity Bootstrapping Pool" (LBP):

• This LBP is 99% your token, 1% ETH (or USD), this lowers your initial capital requirements by 98%.

• Over the course of a week the pools ratio changes from 99% / 1% to 50% / 50%. This creates artificial sell pressure on your token throughout the week, and makes it start at the highest natural price. This stops bots from being able to front-run the sale.

• As the price is lowering all week, users can buy at any point with an equal change of succeeding, they don't have to buy at any specific point of time, which eliminates the gas wars.

• At the end of the week the token will settle on a fair market price based on what people bid for it, so you don't have to guess the ideal initial market price.

Why did Fjord Foundry build using Balancer's pools instead of making their own? It's a huge time saver! Because Balancer had already done the hard work building and auditing their smart contracts, and they work so well with the rest of the DeFi ecosystem.

All Fjord Foundry had to do was build the UI and a few additional systems / contracts for their token launch platform.

They also know (from reading the code) Balancer has no centralized control over these smart contracts. They can't block Forge Foundry or add additional fees, and they won't disappear if Balancer goes bankrupt. This creates a reliable, durable playing field for financial experimentation the world has never before.