The tentative go-live date for the launch of Bancor 3 Phase I Dawn is in Q1 of 2022. As part of the launch, we are working on putting together a new whitepaper that details Bancor 3. This is in addition to a technical paper that covers the underlying design of the protocol and its intricacies. In the meantime, you can read our Bancor 3 primer document that’s available now. Note that we have a new Bancor 3 landing page that details the features of Phase I (A.K.A Dawn) as well as a roadmap.
We have launched a new UI for the Bancor web application which is powered by our new APIs. Expect the new UI to be modern, faster, and better than the previous version. The application will continue to evolve as Bancor 3 rolls out and new screens, as well as user flows, will be made available in the future. We welcome any feedback from the community as well as any bug reports.
New UI screens are now live on the redesigned interface. This includes:
- A new pools page🥽
- A new tokens page💰
- A new portfolio page📒
- A new voting interface🗳
- A new safe staking landing page✅
- A new impermanent loss landing page ✅
- A new Bancor 3 landing page 3️⃣
This week, we saw roughly ~64K in $vBNT that was burned by the vortex. At current $BNT prices (~$3.25) this equates to ~$208K worth of $BNT locked forever.🔒
| time | burnedamount |
| 12/13/2021 0:00 | 5111.053561 |
| 12/14/2021 0:00 | 12339.69473 |
| 12/15/2021 0:00 | 3625.819343 |
| 12/16/2021 0:00 | 1528.047171 |
| 12/17/2021 0:00 | 22722.50795 |
| 12/18/2021 0:00 | 11071.34728 |
| 12/19/2021 0:00 | 7888.863131 |
| Sum | 64287.33317 |
The cumulative burned amount increased from ~1.90m on 12/12 to ~1.967m on 12/19. We are quickly approaching the 2m $vBNT burned mark.
7-day total cumulative fee revenue: ~780.6K
30-day total cumulative fee revenue: ~$4.94m
Source: token terminal
📈 The average daily revenue for different time periods:
- 7 days ~$111.5K
- 30 days ~$165K
The 30-day annualized daily revenue equates to ~$60.2m in annual trading fees paid to LPs. For the past 30 days, trading fee revenue is down (~$300K) as compared to the previous 30 days.
💰 In terms of protocol revenue, Bancor earned around ~$2.47m in monthly revenue for $BNT holders.
🔌Integrations and Updates
- The abstain option for Snapshot is now live in our governance. This is a feature that helps with our high quorum and supermajority requirements on proposals in our DAO. The abstain features allow you to remove yourself from making a “For” or “Against” decision and still count towards the quorum (35%-40% for most proposals). We still get to keep our supermajority rule (66.6%) in order for a proposal to pass successfully and those that are voting “For” or “Against” will count towards it.
- A proposal was recently submitted to our governance forum to implement a vBNT Burn day. It is an interesting marketing idea to highlight the deflationary tokenomics of the protocol. It proposes that once a year, the vBNT rate is set at 100% for 24 hours — from an economic standpoint, one day would make no real difference to fees earned by LPs.
- There is a proposal in Snapshot to increase the trading liquidity on the Paraswap PSP-BNT pool. This will open space for the Paraswap treasury whose DAO voted to stake a portion of their treasury on Bancor. The Paraswap DAO has committed to staking 1.5M PSP tokens to grow their liquidity on Bancor.
- We have a proposal in governance to experiment with a fee change schedule on the TRAC-BNT pool. This performance analysis is looking to optimize the fee percentage that will lead to the best outcome for LPs. Simultaneously, we are hoping that any data gathered from this study will help guide the DAO in determining what the right fee percentage should be for the other pools on the network.
🍣suSHIBAncor — A Bancor 🍥 Sushi Merger
As a surprise to everyone in the Bancor community, there was a proposal
submitted to the SushiSwap governance forum about a potential Bancor x Sushi merger. The proposal itself doesn’t go into any details about how such a merger will function (seems satirical in nature). With that said, I did go into some details about how such a merger would function after being asked this question.
As a first step, both DAOs would have to approve such a proposal. Now what happens next is a good question. Bancor has innovative tech in the AMM space with V2.1 and now with Bancor 3 Phase I Dawn. Sushi can probably tap into Bancor’s infinity pool for liquidity provisioning going forward. Since infinity pools have a concept of trading and nontrading liquidity (can be used for other purposes), this means that idle liquidity can be used for other strategies. Enter Kashi & Bentobox from Sushiswap for lending that liquidity which can generate passive yields for those LPs. Note that some of the non-trading liquidity in infinity pools will be used for flash loans as well.
Sushi also has Miso (a launchpad) and that would be complementary to Bancor. This could fit well with origin pools and external IL protection which lets us list new projects that are riskier to whitelist initially. Bancor would be able to provide liquidity to these new communities. I am not sure about Shoyu. This appears to be an Opensea competitor from the looks of it. It might be interesting to spin this out as a separate team. See, for example, BBS Network — a project from some of the bancor co-founders.
On a more serious note, Mark actually wrote a good post about the merger in the thread. A short excerpt is below:
What I will say in support of the concept (again — without a detailed description, there is little else to opine on), is that both Bancor and Sushi projects seem to have a community-first approach. I don’t see any cultural rift between us that would make it difficult for our two communities to be one. That’s probably the easy part.
As part of our outreach efforts into other communities, we recently held a learning event for Digitalax. This event was put together by alanatheweb3girl (A web3 digi model created by Stella) and the learning was led by Mark Richardson. To encourage attendance and participation, a reward in the form of an NFT was put together 👀👇
🤩 you have to see it in order to appreciate the greatness of this Bancor theme NFT (A digi model wearing a Bancor theme dress 👗). For more of Stella’s work, check out her artist profile on Digitalax. The training session was recorded and is available on YouTube for anyone that missed it.
So if you LP in Uniswap V2, Uniswap V3, or Sushiswap there is a 50% chance that you could end up with negative returns. Essentially your odds are a flip of a coin. No other LPs know this better than Chainlink token holders, who have made Bancor the preferred home for their $LINK. Why is that?
- Single-sided asset exposure: The idea of holding any other tokens besides $LINK is a dreadful thing.
- Impermanent loss protection: The “knowledge” of knowing that $LINK will outperform the rest of the market means that they will end up with broken hearts 💔 if they LP anywhere else.
This week, we saw large amounts of liquidity being pulled from Sushiswap and Uniswap. This effectively made Bancor the majority stakeholder of all $LINK liquidity (~252M at time of writing) on Ethereum. Do these whales 🐳 know something that we don’t?
Lastly, we will end it with an inspirational message from Mark Richardson. A 50-second clip, that answers from his perspective what Bancor is trying to achieve. One word, to be “transformational”.
Some tweets from the official Bancor account in case you missed them
🎩Bancorians in the Wild
This past week (12/12/21), we had three proposals on Snapshot that were able to meet quorum and supermajority requirements:
- Proposal: Whitelist Frax Share (FXS) with 100K BNT trading liquidity
- Proposal: Whitelist DUSK with 50K BNT Trading Liquidity
- Proposal: Activate Abstain Feature
- Proposal: Activate Comment Box and Graph plugins on Snapshot
For this week (12/19/21), we have five proposals on Snapshot for voting:
- Proposal: Increase Trading Liquidity on PSP-BNT Pool to 200K BNT
- Proposal: Onboard Sator (SAO) token
- Proposal: Onboard Boba Network (BOBA) with 50K BNT Trading Liquidity
- Proposal: TRAC-BNT fee change schedule and performance analysis
- Temp Check: Should the Bancor DAO consider a merger with SUSHI to form suSHIBAncor?
Head over to Snapshot to cast your votes on current proposals.
❗If you aren’t voting regularly make sure you unstake your vBNT from governance and delegate instead. Self-nominated delegates maintain a page on Discourse to inform other community members of their intended voting behavior. If you disagree with the way your delegate votes, you can always vote manually to override their decision on your behalf.❗
☎Bancor Weekly Call
In this week’s Community Call recording, Bancor shared the development updates above and answered questions from the community regarding the upcoming features of Bancor 3 Phase I (Dawn).
Mark’s insight into the OriginTrail community’s proposal
Regarding the proposal to monitor and adjust the TRAC-BNT pool’s fee, Mark pointed out that research across all DEXs shows that higher trading fees don’t necessarily reduce fee volume. Sometimes, reducing the trading fee actually reduces the fee volume that comes with it, rather than encouraging more trades to increase fees earned. Therefore, it makes sense to increase the fee and monitor performance.
Moreover, the trading volume doesn’t mean profit for LPs, as shown by the Uniswap V3 data study, which revealed that over 50% of LPs have lost money despite Uniswap being the most dominant DEX on Ethereum in terms of commanding trading volume. Other DEXs don’t have a financial incentive to ensure that LPs are profitable — their protocol tokens do not benefit from LP profitability in the same way BNT does.
Autocompounding rewards on V3
Every token needs liquidity in order to instill a price discovery mechanism, and people who own the token must be able to transfer value. Whilst CEXs can charge millions for listings, DEXs allow you to offer LM programs to bootstrap your pool, but setting these up can be expensive and time-consuming.
Bancor V3 automates this process on behalf of partner projects — all they have to do is ask the DAO to approve their LM rewards, and then deposit their desired amount of LM tokens into a contract that Bancor has already created for them. They don’t need to deploy their own special contracts or build any websites to set up their LM program, as is the case currently when setting up LM programs on other AMMs. Moreover, Bancor’s IL protection means that projects don’t have to provide so many tokens as LM rewards to keep their LPs profitable while their token moons.
What do you think of the Sushi-Bancor merger proposal on Governance?
It seems like a satirical post in response to the turmoil at Sushiswap — we’ve not given it too much thought. If there is support for it on both sides, we’d explore how the two DAOs can combine their resources. It’s also not entirely clear what’s being suggested, but we’re always open to welcoming the Sushiswap community at Bancor in any capacity.
Can you use the one-click migration to bring liquidity from other protocols to Bancor 3?
Yes, not only from other AMMs but all kinds of liquidity protocols such as Aave and Compound.
Does it make more sense to wait for Bancor 3 to launch before providing liquidity to the protocol?
It doesn’t matter too much — having multiple open positions in V2.1 won’t impact your migration costs significantly. Moreover, low gas fees for staking are always a blessing, so if they come around now, don’t wait!
Does token auto-compounding impact the token’s price, since most vaults contribute to price suppression on other liquidity protocols?
Rewards on other platforms cause selling pressure because of the way they’re issued — you have to sell part of the token reward in order to recover the other half of the pool, so that you can redeposit in the pool and continue compounding.
For example, in Yieldyak on Avalanche, you give your funds to the autocompounder and it stakes in the pool on your behalf, using the liquidity tokens generated to stake in the mining contract. As people claim the rewards, they sell half of them for the other token in the pool in order to restake. On Bancor 3, you don’t need to do that since the existing staked liquidity is constantly being redistributed — the protocol is just relinquishing its share of the pool to other users over time.
This mechanism will help Bancor’s external LM support be very popular — other projects don’t want to see this dumping behavior on their own token, but it can’t be avoided when interacting with other AMMs.
Will protocol-owned BNT continue in Bancor 3?
Yes, this stabilizes our ecosystem. We’ll be wielding it with more skill than in V2.1, which was a test run for the system that’s to come. Protocol-owned liquidity remains essential to Bancor.
🤝Connect Projects with Steven, Bancor Business Development Lead:
- Are there tokens you’re holding that we should whitelist on Bancor? DM @FoxSteven about it or connect us with any community leaders/core contributors on the project. Steven leads all our BD efforts and will connect with the team and work with them to get whitelisted or build a deeper pool.
- We have content grants active at all times. Any users that want to create videos or guides, please reach out to Nate Hindman (@NateHindman on Twitter or telegram).
- We have analytics grants. If you want to work on Bancor data projects or if you are good with working on blockchain data and APIs, we can always use your help!
- As always, we have rolling developer grants for those who want to build and innovate on Bancor’s infrastructure.
- Bancor Staking Guide
- Resources & FAQs
- Bancor Docs
- Video: How to stake in Bancor Pools
- Video: How to Earn Fat Yields on Bancor
- Video: Say ADIOS to Impermanent Loss with Bancor V2
- Research: Bancor — The World Token
- Research: Impermanent Loss in Uniswap v3
- Analytics: il.wtf
- Analytics: Bancor Dune Analytics