Bancor retweeted and expressed, Bancor has exceeded $1M dollars in Total Value Locked in the protocol FOREVER. Bancor definitely has the best “set it and forget it” technology in all of DeFi. Also, Bancor didn’t face any problems in latest market drawdown. BNT to $100 Soon
It is important to note that the more BNT locked forever in the protocol the more space on one sided liquidity provision for TKN opens up without the need of BNT LP’s.
For those who missed the Korpi thread:
Vortex Burner is a further improvement to BNT token model (as if it wasn’t good enough!). It’s designed to: – Increase locked BNT liquidity. – Reduce circulating supply of BNT – Increase lending capacity for BNT LPs.
When you provide BNT to Bancor Pool, you get vBNT in return. It represents your stake in the protocol which consists of underlying BNT plus accrued swap fees. Both can be redeemed when you send the same amount of vBNT back to the pool.
ou may also decide to sell your vBNT for other token in Bancor (e.g. LINK or ROOK). It’s done via vBNT/BNT pool, called Bancor Vortex. Purchased tokens can be used to earn more yield by providing additional liquidity on Bancor or by using them in other DeFi protocol.
But selling vBNT removes the option to unstake the associated BNT stake. To get back your staked BNT, you will need to buy back vBNT. In other words, you are making a bet that you will earn enough to get the same amount of vBNT in future and keep some profit on top of it.
Notice that if 1 vBNT > 1 BNT, arb opportunity exists. You can buy BNT, stake it, get vBNT and sell it for more BNT. So vBNT/BNT has an effective ceiling at 1 vBNT = 1 BNT. If you sell vBNT for 1 BNT, you are almost guaranteed to buy it back at lower price in future.
The lower vBNT/BNT rate is, the more room to climb vBNT has, therefore, the higher the risk that you will have to buy back vBNT at higher price in future. So vBNT/BNT rate determines the borrowing risk at any given time. The higher the rate, the lower the risk.
So what is Vortex Burner? It collects an adjustable fee (5% atm) from swap revenue generated by LPs and uses it to buy and burn vBNT. For example, if a $100k trade is executed on a pool with a 0.2% fee, 200$ is collected by LPs. 5% of this fee (10$) buys vBNT and burns it.
Community Musings: One of the community member was like: I took all of the Bitcoin (WBTC) and Ethereum that I bought this week during the big dips and put it into Bancor to compound my gains. This is how winning is done.
Another HODLer: Bancor has much lower trading volumes than Uniswap and Sushiswap but it’s higher than Balancer, DODO, and 1inch. It also offers unique feature for LPs – impermanent loss protection. So it certainly stands out from other AMMs.
The best place to make some fees while holding your favorite coins. Without impermanent loss. Gas it literally the ONLY thing holding Bancor back.
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