Balancer V3 Upgrade

Decentralized exchange protocol Balancer has launched its V3 upgrade, designed to optimize liquidity, provide new developer tools, and drive trading volume growth.

Boosted Pools

Balancer V3 introduces 100% Boosted Pools, combining its permissionless automated market maker technology with DeFi lending protocol Aave’s yield market infrastructure. Aave is the leading launch partner for the upgrade, with others expected to follow suit. The integration enables the pools to merge yield from swaps and lending markets into one efficient position.

> “Aave’s integration with Balancer V3 is a milestone for both ecosystems,” said Balancer co-founder Fernando Martinelli. “Together, we’re delivering a liquidity solution that’s efficient, scalable, and accessible for everyone in DeFi.”

Boosted Pools offer a passive liquidity solution that directs all underlying capital to external yield markets while maintaining liquidity for swaps, the team explained in a statement. With a single click, liquidity providers can optimize returns and access DeFi's most efficient markets without requiring active management.

> “By combining Aave's and Balancer's strengths, the new Aave V3 Boosted Pools empower users with enhanced capital efficiency and simplified yield generation,” said Aave Labs founder Stani Kulechov. “Users earn maximum returns, seamlessly access both supply and swap functions, and enjoy a smooth user experience with minimized gas costs.”

New Developer Tools

Balancer supports automated portfolio management and trading of crypto assets across Ethereum and other EVM-compatible blockchains. Its modular design enables DeFi projects like CoW Swap and Xave to build custom pools tailored to their needs. The V3 upgrade aims to eliminate unnecessary complexity and enable developers to innovate faster.

New features include custom pool types to make building AMMs faster and more accessible and a Hooks Framework to extend the functionality of existing pools.

Use Cases for Hooks

Examples of hook use cases include dynamic liquidity management to make real-time fee adjustments, yield optimization or automated rebalancing in specific market conditions, and tailored pool behavior for unique trading strategies.

StableSurge Hook is launching alongside Balancer V3, designed to protect stable asset pegs during periods of volatility while rewarding liquidity providers with higher returns.

Balancer claims its V3 has already attracted interest from DeFi protocols, including Gyroscope, introducing asymmetric concentrated liquidity pools without requiring active management, and QuantAMM, developing onchain fund products using Balancer’s custom pool capabilities.

Security Measures

Balancer V3 was audited by leading industry firms like Trail of Bits, Spearbit, and Certora, including manual code reviews and formal verification to ensure robust security. Balancer also held code-review competitions, inviting external developers to analyze the codebase.