The History of BAL

BAL, the governance token of the Balancer protocol, has a distinctive place in the growing DeFi (Decentralized Finance) ecosystem. The Balancer protocol itself was initially founded in 2017 by Fernando Martinelli and Mike McDonald with the intention of creating an automated portfolio management service built on Ethereum. It primarily gained recognition as a decentralized liquidity protocol where users can provide liquidity to customizable pools. The goal was to not only facilitate decentralized exchange but also offer options for liquidity provisioning that are more flexible than alternatives.

BAL tokens were not part of the original launch of the protocol. Instead, the token was introduced in 2020, when the Balancer team decided to decentralize control over the protocol. The creation of BAL was driven by the desire to hand over governance to the users of the platform, allowing them to have a voice in key decisions such as governance proposals, protocol upgrades, and more.

The BAL token was officially launched in June 2020, with an initial supply and distribution strategy that involved yield farming. A percentage of BAL tokens were awarded to those who provided liquidity to specific pools within the Balancer platform. This concept of incentivized liquidity mining became a popular aspect of DeFi and helped drive initial interest in Balancer by allowing users to earn BAL while participating in liquidity pools.

The governance function of BAL is centralized around decisions about the protocol's policies. Token holders can vote on key elements such as fee structures, the creation of new liquidity pools, or even protocol upgrades. In many ways, BAL was envisioned not just as a reward or financial asset but as a vital tool in Balancer's ecosystem to ensure greater decentralization and community involvement in governance decisions.

Since its inception, BAL has been central to the mission of transforming Balancer into a fully decentralized protocol. By granting governance powers to BAL holders, Balancer aimed to create a more open and self-sustaining ecosystem where the control gradually shifts away from the founding team and into the hands of its users.