This article was first published on Bancor - Medium
This guide shows you how to stake and earn in the SNX liquidity pool on Bancor v2.1.
Bancor v2.1 reduces friction, risk and improves profits for liquidity providers. Using bancor.network, LPs can stake in the SNX pool and maintain 100% exposure to SNX (instead of taking on exposure to a separate paired asset like ETH), while earning swap fees, liquidity mining rewards and protection from impermanent loss.
Note: The SNX pool was recently selected for BNT liquidity mining rewards and will start receiving 10,000–20,000 BNT per week once the pool receives at least $400,000 USD in total liquidity.
Impermanent Loss Insurance
Impermanent loss insurance accrues over time, increasing 1% per day until an LP receives 100% insurance after 100 days in the pool.
Meaning, if you stake 100 SNX in the pool for 100 days, even if SNX moons, you’ll still get the equivalent value of 100 SNX back — plus swap fees & rewards. In other AMMs, the rising price of SNX causes the pool to sell SNX, so you may end up with less SNX and more of the paired asset that dropped in value. Learn more about IL insurance.
The chart below shows the impact of impermanent loss on LP returns in the SNX/ETH pool on Uniswap May 20-December 24, 2020. All else held equal, Bancor’s impermanent loss insurance protects against periods of negative returns and improves profits for LPs more than 2X.
How to Stake & Earn SNX on Bancor
1. Stake SNX (or BNT)
Go to bancor.network; select the SNX pool & enter the amount of SNX to be staked:
If there is zero space available in the SNX pool for single-sided ...
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