Bancor v2.1 Protocol Health Report: January 2020

This article was first published on Bancor - Medium
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Bancor v2.1 has been live for about three months. The new version of the protocol offers single-sided exposure and impermanent loss protection to AMM liquidity providers through the use of BNT.

The following report utilizes on-chain liquidity, volume and revenue data collected from October 24, 2020 to January 6, 2021 to analyze the growth and overall health of the protocol. Additional protocol reports, live dashboards and network data will be made available to the community via bancor.network.

Highlights:

  • Total network liquidity increased almost 1000%, driving $1.12M USD in cumulative swap fees ($4.48M annualized).
  • The value of swap fees earned by the protocol exceeded the total cost of impermanent loss compensation paid to liquidity providers by a margin of more than 5X.
  • This indicates protocol revenue is covering the cost of impermanent loss protection, and generating a profit for the protocol and its owners (BNT holders).
  • The results lend credence to the sustainability of the v2.1 model and largely support our belief that v2.1 offers a compelling answer to the problems of first-generation AMMs.

Sections:

  1. Bancor v2.1 Primer
  2. Liquidity & Fees
  3. Impermanent Loss Protection
  4. BNT Supply
  5. Outlook
  6. Conclusion

1. Bancor v2.1 Primer

A key feature of Bancor v2....

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Bancor - Medium

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