Bancor Monthly Progress Update (February 2021)

This article was first published on Bancor - Medium
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Bancor Progress Update (February 2021)

Since the launch of Bancor v2.1, TVL increased over 2,000% and monthly swap volume rose over 1,500%, as liquidity providers have rushed to take advantage of Bancor’s single-sided exposure and impermanent loss protection.

Bancor v2.1 is now generating close to $20M in annual fees — and we’re just getting started.

As the ecosystem expands, development is rapidly moving forward. This post covers recent progress & upcoming plans, including:

  • BNT liquidity mining rewards: $23M+ in BNT rewards paid out to LPs so far; over 85% of rewards re-staked to the protocol
  • Bancor Vortex: borrow against staked BNT and provide leveraged liquidity (phase 1); vBNT fee-burning (phase 2)
  • Scaling Bancor v2.1: cap increases & streamlined token whitelisting
  • Joint liquidity mining: allow token projects to deploy non-BNT liquidity mining with single-sided re-staking
  • Bancor.network redesign (coming soon): limit orders, new trader features & one-click LP token migration from other AMMs
  • New APIs: real-time pricing, volume, revenue data
  • Layer 2: Arbitrum testnet contracts deployed w/ front-end demo
  • Cross-chain: Cross-chain bridge to Polkadot & other chains
  • Nexus Mutual “shield” mining launched
  • Top secret new pool design (delet)

Industry View

The data suggests Bancor is gaining traction with users who want to stay long on their tokens and avoid impermanent loss while providing liquidity. This “HODL + LP” strategy aims to earn higher returns from swap fees and liquidity mining rewards for liquidity providers and the protocol’s owners, BNT token holders.

After accounting for impermanent loss compensation, BNT holders earn around 25% of total swap fees. This is approximately 50X higher than other AMM protocols: SUSHI holders, for example, earn 0.05% of swap fees, while UNI holders currently earn 0% of swap fees.

The design of Bancor v2.1 is driven by our conviction that those who support the system, the LPs, are entitled to 100% of its ...

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