Bancor for most of DeFi is the forgotten pioneer that built the foundations of everything we have in DeFi. The first AMM sprung forth from an attempt at building localized niche currencies and after being passed over by some for other AMMs like Uniswap, the project continued to build and develop a better way. Now years later, they are set to reveal a new version of Bancor that could dramatically change the DeFi landscape again and they are determined to never be forgotten again.
Nate Hindman and Mark Richardson not only detail the massive sea change that Bancor is bringing to market in V3, but our discussion takes us to the core components of DeFi and how to do things better.
Project Name: Bancor
Project URL: https://bancor.network
Project Twitter: https://twitter.com/Bancor
Guest Names: Nate Hindman & Mark Richardson
This is not financial advice. Nothing said on the show should be considered financial advice. This is just the opinions of Brad Nickel and his guests. None of us are financial advisors. Trading, participating, yield farming, liquidity pools, and all of DeFi and crypto is high risk and dangerous. If you decide to participate, do your own research. Never count on the research of others. We don't know what we are talking about and you can lose all your money. Never invest more than you can afford to lose, because you probably will lose it all.
How Bancor began as a local currency company
Morphed into AMM, because they had to have a way for the currencies to be able to be exchanged and to have liquidity
How impermanent loss led to them developing single-sided liquidity providing with verion 2.1
Users are able to get out the same number of tokens they put inplus the LP fees
Then they describe how it works.
Each pool has a common reserve asset in the pool which is Bancor's token BNT
BNT is also an elastic supply token. Protocol owned liquidity
2.1 reduced the amount of liquidity allowed or capped it to make sure it was safe.
How the DAO decides the capped amount for each token
The more mature the token, the more depth in the pool
Their insurance policy is vested over 100 day so to protect yourself from impermanent loss, then you have to keep your funds in the entire time.
How their new version becomes composability
Why the price of the token BNT is fairly stable and how much is trade-able
Whether the volume of the exchange impacts the price
Does the gambling addiction in Crypto impact the prices of tokens?
Composability and smart tokens
How Bancor pool tokens are immune to the type of price manipulation attacks experienced by Cream Finance.
Up only tokens as part of the system
Can only go up or sideways
How volatility data has reduced the insurance/lockup period to just a 7 day cool down for withdrawal.
Omni pool for earnings from the entire network
No limits on deposit amounts
Staking rewards from partner projects
Being deployed in 3 phases
Phase 2 not yet public
Superfluid liquidity - can generate fees from liquidity and strategies - can be internal and external to the protocol
$400 million in ChainLink liquidity $LINK
No having to decide between fees from trading or staking
Chip on their shoulder from having been the first and forgotten
Partners can also insure their own tokens to compensate for IL protection
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