BalancerV2-Arbitrum is a decentralized exchange protocol built on the Arbitrum network. It aims to provide users with efficient and low-cost trading solutions for their assets. The project was founded by Fernando Martinelli in 2019 and is backed by Balancer Labs. BalancerV2-Arbitrum combines the features of Balancer's automated portfolio manager and Arbitrum's layer 2 scalability to enhance the trading experience for users. It offers liquidity pools with customizable weightings and allows for the creation of new smart contract-based strategies.
BalancerV2-Arbitrum offers several benefits compared to its direct competitors. One of the key advantages is its scalability. As a layer 2 solution built on Arbitrum, BalancerV2-Arbitrum is able to significantly increase transaction throughput and reduce fees compared to its competitors.
Another benefit is the improved user experience. BalancerV2-Arbitrum allows for faster transactions and lower gas costs, making it more efficient for users. This can be particularly advantageous for traders and liquidity providers who rely on quick and cost-effective transactions.
Additionally, BalancerV2-Arbitrum offers a high level of security. By leveraging the security guarantees of the underlying Arbitrum technology, BalancerV2-Arbitrum ensures that users' assets and transactions are protected.
Compared to other decentralized exchanges (DEXs) that operate on different blockchain networks, BalancerV2-Arbitrum provides unique advantages. For example, when compared to Ethereum-based DEXs like Uniswap or SushiSwap, BalancerV2-Arbitrum offers lower transaction fees and faster transaction confirmation times. This can be especially beneficial in times of high network congestion on the Ethereum blockchain.
In summary, BalancerV2-Arbitrum offers scalability, improved user experience, and enhanced security compared to its direct competitors. Its ability to provide faster transactions, lower fees, and leverage the benefits of the Arbitrum protocol make it an appealing choice for traders and liquidity providers in the decentralized finance (DeFi) space.
BalancerV2-Arbitrum is built on the Ethereum blockchain and leverages the layer 2 scaling solution called Arbitrum. Layer 2 solutions aim to alleviate the congestion and scalability issues of the Ethereum network by moving some of the computation off-chain while still maintaining the security and decentralization of the underlying blockchain.
Arbitrum operates as a sidechain of Ethereum, meaning it runs parallel to the main Ethereum network and periodically synchronizes with it. This allows for faster and cheaper transactions compared to using the Ethereum mainnet directly. BalancerV2-Arbitrum utilizes Arbitrum's features to enhance the functionality and performance of the Balancer protocol.
The Balancer protocol, on the other hand, is a decentralized automated portfolio manager and liquidity provider for cryptocurrencies. It allows users to create and manage liquidity pools with multiple tokens and different weightings of each token in the pool. This enables efficient trading and automated portfolio rebalancing based on predetermined strategies.
With BalancerV2-Arbitrum, users can leverage the scalability provided by the Arbitrum sidechain to create and interact with liquidity pools more efficiently. It reduces transaction costs and improves transaction speed, making it an attractive option for traders and liquidity providers.
By combining the advantages of both Balancer and Arbitrum, BalancerV2-Arbitrum aims to provide a seamless and high-performing decentralized liquidity management solution on the Ethereum ecosystem. Its underlying technology and use of the Arbitrum sidechain contribute to a more efficient and scalable experience for users.
DIA utilizes a comprehensive approach to fetch trade data from various decentralized finance (DeFi) and non-fungible token (NFT) exchanges. The process differs depending on the type of exchange being referred to.
For centralized exchanges such as Coinbase, Kraken, and Binance, DIA employs scrapers that directly collect trades from exchange databases using Rest APIs or WebSocket APIs. The frequency of data collection varies from 1 to 7 seconds, depending on the exchange. This approach ensures that DIA can capture trading data as close to the source as possible, enhancing precision and accuracy.
In the case of decentralized exchanges, DIA sources trading data from different blockchains by subscribing to swap events in liquidity pools. This allows DIA to directly retrieve trading data from the blockchain itself, providing enhanced data accuracy. Examples of decentralized exchange sources that DIA integrates with include Uniswap, curve.finance, and PancakeSwap.
When it comes to NFT marketplaces, DIA captures live trading data by retrieving information from the integrated marketplaces' smart contracts. The retrieval period for NFT transactions typically ranges from 20 seconds to 1 minute. By focusing on real-time data from NFT marketplaces, DIA ensures precision and avoids relying on unreliable bids and offer data. Prominent NFT integrated exchange sources for DIA include Blur, X2Y2, OpenSea, and TofuNFT.
Overall, DIA's data management strategy covers the entire data journey, from collecting individual trade information to delivering highly accurate and customizable price feeds. This approach, which leverages websockets, decentralized node providers, Rest APIs, WebSocket APIs, and direct blockchain retrieval, enables DIA to provide reliable and comprehensive data feeds for different types of exchanges.
DIA utilizes a multi-step process to compute trade data from BalancerV2-Arbitrum and build price feed oracles, depending on whether we are referring to DeFi or NFT exchanges.
In the case of DeFi exchanges, such as BalancerV2-Arbitrum, DIA follows a data cleaning and outlier detection process. This involves removing data points and sets that deviate significantly from the median market price. To achieve this, DIA applies an Interquartile Range (IR) filter, which identifies and excludes trades falling into the first or last quartile. Only trades falling into the "middle" quartiles move forward for further processing.
Once the diverting trade data is cleared, DIA applies price determination methodologies to calculate the final price. For example, the Volume Weighted Average Price (VWAP) methodology considers the volumes of trades and calculates a weighted average price based on the executed prices and volumes. Another methodology used by DIA is the Moving Average with Interquartile Range Filter (MAIR), which creates blocks of trades ordered by timestamp and calculates a weighted average price for each block.
On the other hand, when building price oracles for NFT collections, DIA follows a different process. The on-chain trade data is first processed through cleansing filters to exclude outliers and manipulation techniques. Then, a pricing methodology is applied to determine the final price point.
The simplest methodology for NFT collections is the Floor Price, which provides the lowest sale price recorded on the blockchain within a specific time window. However, this methodology is susceptible to manipulation, such as wash trading and sweeping the floor. To address this, DIA offers advanced methodologies, such as the Moving Average of Floor Price, which returns the moving average of a collection's floor price. These methodologies can be customized with parameters like the length of the average or the size of the floor window.
In summary, DIA employs data cleaning, outlier detection, and specific price determination methodologies to compute trade data from BalancerV2-Arbitrum and build accurate price feed oracles for both DeFi and NFT exchanges.
Instead of distributing pre-calculated data feeds, DIA covers the whole data journey from individual trade collection, and computation to the last mile of the feed delivery.