Decentralized Finance (DeFi) is the next big thing for cryptocurrency investors as another DeFi governance token has recorded a massive price jump within the first day of launch.
Balancer, a non-custodial portfolio manager, liquidity provider, and price sensor, has launched its protocol governance token (BAL) on the Etheruem ecosystem, Balancer Labs announced Tuesday evening.
A governance token allows holders to participate in the decentralized governance decisions that will determine the future of the project. This includes making decisions on protocol fees, new features implementations, etc.
Although liquidity providers for Balancer’s token mining pools started earning BAL tokens since the first day of June, token distribution to eligible liquidity providers only commenced yesterday. The project distributed 435,000 BAL that was mined over the last three weeks to about 1,000 Ethereum addresses.
BAL surges 235% in one day
Following BAL’s distribution, the value of the token recorded 235% gain in less than 15 hours, with the price moving from $6.65 to as high as $22.28, according to data on Coingecko. The token now ranks as the 65th largest cryptocurrency with a market cap of $124,126,523. At the time of writing, BAL was trading at $20.52.
BAL has its maximum supply capped at 100 million with 35,435,000 minted so far. According to the project, 25M of the current supply is for the founding team, stock options, advisors and investors, 5M for the Balancer ecosystem fund, 5M for the fundraising fund, and 0.435Mwas minted for liquidity providers which
was distributed yesterday.
Data on Defi Pulse also suggests that the massive rise has placed Balancer as the 6th largest DeFi app with $62.5 million worth of ETH locked in the project.
DeFi on Fire
With Compound being the first major DeFi project to distribute its governance token, Balancer is the second governance token on a DeFi protocol.
The Balancer protocol governance token comes just one week after Compound Protocol launched its governance token COMP.
See Also: Top 10 DeFi Apps to Look Out For in 2020
As Coinfomania reported, COMP surged 230%+ within a few days after token distribution commenced, reminding us of the good old ICO days of 2017.
With the first two governance token distributions marked as a success, one would expect more DeFi projects to join the bandwagon and start distributing some of their governance tokens sooner than later.
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