This article was first published on Bancor - Medium
- You can now “zap” into a Bancor liquidity pool simply by buying its Pool Token on 1inch.exchange.
- Zaps allow users to add liquidity to a Bancor pool in a single action with one ERC20 token that is automatically split across the pool’s reserves.
- Zaps are not limited to funding 2-token pools with 50/50 weights. You can zap into a Bancor pool that contains any number of reserve tokens and is set with custom reserve weights (e.g., 80/20 or 60/20/20 pools).
How It Works
Developed by the 1inch team, Bancor Zaps use 1split, an open-source on-chain aggregator, to:
- Receive any ERC20 token
- Split the token into the pool’s underlying assets according to the pool’s reserve weights
- Deposit the assets in the pool’s reserves
- Mint Bancor Pool Tokens, which represent your share of the pool
You can always zap out of a pool to realize gains in any ERC20 token, such as ETH or DAI. Zapping out sells (burns) your Pool Tokens for the pool’s underlying assets, which are then converted into the desired ERC20 token.
Hat-tip to DeFiZap — which first popularized liquidity pool zaps.
How to Zap
This example will use ETH to zap into the UBT/BNT pool. Simply reverse the steps to zap out.
- Visit https://1inch.exchange/ & connect your wallet.
- Select the From Token (in this case, ETH) and the amount you would like to stake:
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Bancor - Medium