BAL is the governance token of the Balancer protocol
BAL is a low-cap asset that represents the blockchain`s native currency or monetary fee used to execute transactions on the network. This asset is exposed to the underlying risks of Balancer, a protocol rated as Average.
BAL has a fixed supply.
BAL is highly correlated to the overall market.
The BAL token is used to govern the Balancer protocol as well as provides holders the ability to submit potential changes to the allocation of pool rewards on the Balancer platform. The amount of voting power a user has scales linearly with the amount of veBAL tokens locked (obtained by locking 80/20 BAL/WETH) and the duration of the lock-up period (minimum of 1 week; maximum of 1 year). The veBAL quantity will decay over time to 0, after which the user can redeem their 80/20 BAL/WETH liquidity.
The total supply of BAL is expected to be around 94M tokens. BAL launched with a constant inflation of 145K BAL per week with a 100M max supply. Following the launch of the veBAL tokenomics, a new halving schedule was introduced where the inflation schedule would be halved every 4 years with gradual declines every year. This means the total supply will come down to 94M from the prior 100M cap. The token distribution includes up to 65% reserved for Balancer LP rewards, 25% for founders, advisors and investors (all subject to vesting), 5% to the ecosystem fund, and 5% to the fundraising fund.
BAL has value accrual mechanisms through its power to promote certain pools on the platform and locking mechanism to accrue rewards for long-term liquidity providers (LPs). Voters determine the different allocations of BAL tokens to each pool. Users are also incentivized to lock 80/20 BAL/WETH within the protocol in return for veBAL tokens. veBAL lockers are entitled to 75% of fees generated by the protocol's liquidity pool, as well is used to boost LP rewards.