The battle against the escalating cost of using Ethereum for DeFi operations is heating up. Balancer is the latest protocol to unleash its gas-fighting weaponry by giving a little back.

Decentralized finance (DeFi) protocol Balancer has just enabled a budget for a gas reimbursement program following a governance vote over the weekend.

The pilot scheme involving 30,000 BAL tokens, valued at an estimated $630,000 at current prices, will run for four weeks starting on Jan. 25. It will partially reimburse gas costs on select pairs for transactions made directly via Balancer’s Exchange Proxy smart contract.

Giving Back

The announcement added that based on gas prices and transactions over previous weeks, reimbursements would average between 40% and 50% but could reach as high as 95% of the gas costs.

It hopes that the incentive will make Balancer a more attractive option for decentralized token swaps and liquidity mining when transaction fees are now a decisive factor. It added that there are “very specific caps to prevent attempts at gaming the system” and the program does not cover trading fees or specious activities such as wash trading.

Initially the reimbursements will only cover swaps between any two of the following tokens: wETH, wBTC, USDC, DAI, and BAL. Other DeFi exchanges such as Loopring have also launched their own incentives in the escalating war on gas.

Ethereum Miner Gas Attck

Average transaction prices are currently around $9.50 according to BitInfoCharts, which has depicted a gradual uptrend that began in mid-2020 with the DeFi boom. Gas prices really took off in mid-December as Ethereum prices started to gain momentum.

They hit a peak average price of over $16 on Jan. 11, 2021, and have fallen back to around $9.

The ETH Gas Station reports that Uniswap is currently the top gas-guzzler with $36.3 million used over the past 30 days and an average price of over 100 gwei.

Ethereum developers have accelerated their work on the gas-saving EIP 1559 upgrade but it could still be a while yet before it’s deployed.

BAL Token Price Update

Balancer’s native BAL token has retreated heavily over the past 24 hours, dropping back to $21.15. It’s down 9% over the past week but is still up on 35% since the beginning of 2021.

The all-time high for BAL came in early September of 2020 when it hit $35 during the height of the DeFi frenzy.

In terms of total value locked, Balancer is currently ranked ninth according to DeFi Pulse with $840 million in TVL — just below its all-time high.

The post Balancer DeFi Protocol Battles Gas Fees with Reimbursement Plan appeared first on BeInCrypto.

Source: Be In Crypto