This article was first published on Bancor - Medium
Last month was an exciting month for the Bancor ecosystem. Following the launch of Bancor v2.1 and the announcement of BNT liquidity mining, total value locked (TVL) increased 5X from $15M to over $85M, driving a 300% increase in weekly swap fees generated by the protocol.
In this post, we’ll take a brief look at recent protocol activity and explore new & upcoming developments, including:
- Bancor v2.1 progress
- BNT liquidity mining
- Bancor.network updates
- Integrations: Zapper & DeBank
- BIP8: Perpetual BNT burning
- Upcoming releases: Gas optimizations & tiered whitelist
- Amid ETH bull run, LPs hit by impermanent loss
Bancor v2.1 progress
A wave of new users have started providing liquidity on bancor.network to generate yield on their tokens and to test-drive the industry’s first single-sided AMM liquidity pools, equipped with impermanent loss protection.
Bancor v2.1 is a dramatic improvement over the existing AMM model, as LPs can now stay long on their tokens and earn swap fees without having to worry about price movements reducing the value of their stake.
The new version of Bancor uses an elastic supply token (BNT) to manage liquidity across the network. BNT is continuously co-invested and burned by the protocol to support single-sided contributions and to offset impermanent loss for LPs.
Keep in mind that single-sided liquidity and IL protection does not necessarily require emitting new BNT. BNT co-invested by the protocol is ultimately burned when an LP withdraws. Similarly, the cost of IL protection is only paid out by the protocol when an LP withdraws, and may be less than fees earned from protocol-invested BNT, allowing the protocol to offset an LP’s IL without emitting new BNT....
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Bancor - Medium