Gnosis and Balancer Labs announced the deployment of the Balancer-Gnosis-Protocol (BGP), a brand-new decentralized exchanged running on top of Ethereum. Felix Leupold, Software Engineer Lead at Gnosis, broke down some bottom lines on the procedure and how it will assist users to trade with better cost-efficiency.
The Balancer-Gnosis Protocol will converge 2 elements, as part of the cooperation, Balancer’s second model Vault System and Gnosis price-finding system. As Leupold discussed, the BGP will secure users from Miner Extractable Value (MEV) exploits, but without losing on-chain liquidity.
MEVs are acquiring more attention, as more services address take on harmful methods that primarily impact users. As Leupold stated, traders on Ethereum’s network can “& ldquo; get rekt by miners and arbitrageurs” & rdquo; when these actors bundle deals in order to manipulate rates. 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 cost. Ethereum is already batching transactions into discrete blocks so the notion of time-priority within a block is not significant.
Ethereum Users Will See The Biggest Benefit
The DEX will be rollout in stages, its Proof-of-Concept is live for designers on the mainnet, CowSwap Exchange. When totally deployed, users will take advantage of the Gnosis Protocol solution to execute trades after they have been batched, as displayed in the image below. The transaction must be signed, gathered by a “& ldquo; solver & rdquo;, batched and sent through the Gnosis Protocol for final settlement with Ethereum’s DeFi community.