How to use Balancer Exchange: A step-by-step guide

DeFi (Decentralized Finance) opened a whole new world in crypto. The DeFi trend witnessed the appearance of a myriad of AMMs (Automated Market Makers), some of which became a phenomenon such as Uniswap, Pancakeswap or Sushiswap. 

However, it can be clearly seen that most of the currently available AMMs only support the trades of 2 tokens, with some exceptions that provide a 3-asset-pool. On the contrary, Balancer supports up to 8 assets in one pool, creating more possibilities and flexibilities.

In this article, I will give you clear instructions on how to use Balancer and how its features are different from other common AMMs.

Balancer Overview

Balancer is an AMM on the Ethereum blockchain. By using “Smart Pool”, Balancer allows users to provide up to 8 assets per liquidity pool, with the percentage of each asset in the pool being arbitrage instead of the conventional 50%.

Balancer is also used as an automated portfolio manager. Balancer involves the participation of both investors who want their portfolios remain balanced without having to spend an overwhelming amount of fees, and traders who will finish that work by following arbitrage opportunities.

Preparation for trading on Balancer

What are the prerequisites for trading on Balancer?

First, users need to download and create an account (optional) on Coin98 Wallet.

Coin98 Mobile Wallet version X is available for download.

Read the detailed instruction on how to use Coin98 Wallet or watch the tutorial video below to install the Coin98 Mobile Wallet:

Coin98 Extension: Follow these steps to install the Coin98 Extension Wallet on Chrome:

Step 1: Find and select Coin98 Extension Wallet on Chrome Web Store;

Step 2: Click Add to Chrome;

Step 3: A pop-up notification is displayed on the screen, please read it carefully. To approve, click Add extension.

Step 4: To use the extension, click the extension icon to the right of the address bar. If the Coin98 Extension Wallet shows up in the drop-down menu, it has been installed and enabled successfully.

Create an Ethereum Wallet on Coin98 Wallet

Before using Balancer, users need to create an Ethereum (ETH) wallet. Users can create a new Ethereum wallet on Coin98 Wallet or import an existing Ethereum wallet from other wallets to Coin98 Wallet. Creating a Multi-chain wallet on Coin98 Wallet will also include an Ethereum sub-wallet.

Preparing gas fee

Balancer is now available on Ethereum, Polygon and Optimistic Ethereum. Therefore, in order to trade on Balancer, users must have ETH or MATIC in their wallets. In this article, I will use Balancer on Ethereum, therefore I have to prepare ETH as gas fee.

Users can buy ETH & MATIC on a centralized exchange such as Binance, FTX, Gate,... and send it to the respective wallet address on Coin98 Wallet.

How to use Balancer with Coin98 Extension Wallet 

Connect the Coin98 Extension Wallet to Balancer

Step 1: Go to Balancer app here: https://app.balancer.fi/#/

Step 2: Connect to Coin98 Extension Wallet.

Step 3: Choose “Metamask”. Enter your Coin98 Wallet Extension password if needed.

Note: When you are using both Metamask and Coin98 Wallet Extension, Coin98 Wallet Extension will be preferred. You can use 2 different Google Chrome profiles to avoid this overlap.

Add liquidity

Step 1: Choose a pool to add liquidity. Notice the weighting of each token in the pool. I’ll take the pool WETH - USDT as an example.

Step 2: Approve the asset to be used. 

• If you are providing liquidity with multiple assets, you will have to approve all of them.
• If you are providing liquidity with a single asset, you only have to approve once and Balancer will automatically convert them to other tokens based on the pool’s weighting.

In this example, I will use only USDT and Balancer will automatically split my USDT into 50% USDT and 50% WETH.

Step 3: After approving, select “Invest” and confirm the transaction in the Coin98 Wallet Extension.

You have successfully provided liquidity to Balancer’s pool.

Swap

Step 1: Select “Trade”.

Step 2: Choose the trading pair. Enter the amount you would like to swap. Check all the details, then click “Preview trade”. 

Step 3: Select “Confirm trade” to perform the Swap transaction.

Step 4: Check the gas gwei and confirm in the Coin98 Wallet Extension.

You have successfully swapped on Balancer.

How to use Balancer on the Coin98 Wallet

Add liquidity

Step 1: Open the Coin98 Mobile Wallet. Select “Browser” and search Balancer.

Step 2: Click “Connect” to connect to the wallet. Select “Metamask”.

Step 3: Choose a pool to add liquidity. Notice the weighting of each token in the pool. I’ll take the WETH - USDT pool as an example.

Step 4: Approve the asset to be used. 

• If you are providing liquidity with multiple assets, you will have to approve all of them.
• If you are providing liquidity with a single asset, you will have to approve only once and Balancer will automatically convert them to other tokens based on the pool’s weighting.

In this example, I will use only USDT and Balancer will automatically split my USDT into 50% USDT and 50% WETH.

Note: Since I have approved USDT using Coin98 Wallet Extension in the above example, I do not have to approve here.

Step 5: After approving, select “Invest” and confirm the transaction in the Coin98 Mobile Wallet.

You have successfully provided liquidity to Balancer’s pool.

Swap

Step 1: Click “Trade”. 

Step 2: Choose the trading pair. Enter the amount you would like to swap. Check all the details, then click “Preview trade”. 

Step 3: Choose “Confirm trade” to perform the Swap transaction.

Step 4: Check the gas gwei and confirm in the Coin98 Mobile Wallet.

You have successfully swapped with Balancer on Coin98 Mobile Wallet.

Conclusion

And that is all what you need to know in order to use Balancer. Hopefully, this article can effectively support users in using Balancer with Coin98 Mobile Wallet and Coin98 Extension Wallet.

If there are any questions, please feel free to comment below for further discussions!