This article was first published on Bancor - Medium
DeFi investment fund DeFiance Capital has taken a position in the BNT token and will serve as strategic advisors to the Bancor protocol, advising on tokenomics, strategy and institutional liquidity provision.
DeFiance will use its BNT tokens to provide liquidity on the bancor.network and earn yield from swap fees and liquidity mining rewards, while enjoying impermanent loss protection.
“Bancor was the pioneer of the Automated Market Maker (AMM) model on Ethereum,” wrote members of the DeFiance team in a recent article on Bancor in Deribit Insights.
“Despite Uniswap’s runaway success and the rise of similar competitors such as SushiSwap, the Bancor team persisted in iterating on their original product. With the Bancor v2.1 release in Oct. 2020, the combination of single-sided liquidity provision and impermanent loss insurance seemed to be the unique selling position needed to make a breakthrough in the fiercely contested DEX arena. This is clearly reflected in parabolic growth metrics such as TVL and trade volumes since the protocol update.”
Protocol Stats (as of March 18, 2021):
- TVL: $1.65B (#9 on Ethereum — DeFiPulse)
- Cumulative fees: $61M per month (#4 on Ethereum — Cryptofees)
- Bancor Dune Analytics
DeFiance joins Bancor at a pivotal moment in the protocol’s development and the overall DEX ecosystem. Until the recent release of Bancor v2.1, AMM pools have required liquidity providers to forfeit their long position on volatile tokens and take on exposure to other assets in a pool. LPs have also run the risk of suffering impermanent loss, which can leave them holding less of their principal stakes, even after accounting for fees and rewards.
Such risks have prevented many users from providing liquidity, since unlike most staking products, AMMs can under-perform a basic buy-and-hold strategy.
By removing IL risk for LPs and offering single-asset exposure, Bancor v2.1 ...
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Bancor - Medium