Bancor Progress Update: December 2020

Bancor Follow Jan 1 · 5 min read

December was another record-breaking month for the Bancor ecosystem as swap volume and total liquidity locked reached all-time highs for the second month straight.

Since the launch of Bancor v2.1 in October, monthly volume has increased 470%, while total liquidity locked has increased over 670% (currently ~$130M). Highlights in this update include:

New tokens added to BNT Liquidity Mining: SNX + AAVE

LM rewards development (almost there!) & joint liquidity mining

Raising insurance limits

Coinbase lists BNT

Integrations: Matcha & Zapper go live

Bancor selected as a leading crypto by World Economic Forum

Cross-chain development: Polkadot

L2 Development: Arbitrum

Admin fee via vBNT

Roadmap in 2021

SNX & AAVE Receive BNT Liquidity Mining Bancor governance added two new tokens to the BNT liquidity mining program. SNX & AAVE will receive liquidity mining rewards for 12 weeks straight.

SNX staking guide ; SNX pool The SNX pool allows LPs to earn swap fees, impermanent loss insurance & BNT rewards.

AAVE staking guide ; AAVE pool

The AAVE pool allows LPs to earn swap fees, impermanent loss insurance & BNT rewards.

In addition, the following pools are currently receiving BNT rewards: ETH, LINK, WBTC, USDT, DAI, USDC, OCEAN, YFI, REN, renBTC.

Staking & stats on bancor.network

LM Rewards Development & Joint Liquidity Mining They’re coming! Liquidity mining rewards are undergoing third-party audits and expected to go live in January. We can’t wait for LPs to see how much they’ve been earning since v2.1 went live.

Once live, LPs can claim their rewards, or re-stake them in the same or a separate pool in exchange for additional BNT bonuses. The upcoming launch will also feature a mechanism for third-party projects to run Joint Liquidity Mining on Bancor pools, with configurable distribution schedules and bonus programs.

Since LPs on Bancor are not susceptible to impermanent loss, third-party projects can run liquidity mining programs that deliver higher APY with fewer funds compared to other AMM pools.

Raising insurance limits Bancor v2.1 allows the protocol to co-invest alongside LPs to support single-sided exposure and impermanent loss insurance, while also generating fees from protocol- invested BNT.

The Bancor DAO governs the amount of BNT that can be co-invested per pool, and earlier this month, it voted to increase the limits on the ETH and LINK pools.

Researchers in the Bancor community have been observing the impact of limit increases — and the results are encouraging. As limits are raised, single-sided liquidity rushes in. The increased liquidity corresponds to an increase in marginal fees in both the ETH and the LINK pool (shown below): Increasing the LINK pool’s insurance limits led to an increase in liquidity & marginal fees (source: topaz.blue)

Bancor is winning a greater share of LINK swaps on 1inch as liquidity in the pool (now at $16.8M) has grown.

In sum, the increases in pool capacity were shown to be beneficial in that they brought Bancor pools closer to being competitive in the market, which in turn leads to an increase in transaction volume and therefore fees.

Stay tuned for proposals on additional limit increases to strategic pools, as well as custom insurance packages for newer, less established ERC20 tokens.

Coinbase Lists BNT We were thrilled to see BNT listed on Coinbase, a major milestone for the Bancor community which exposes the protocol to a broader audience of crypto users.

Integrations: Matcha & Zapper Go Live

Matcha Bancor is now used as a liquidity source in Matcha, the DEX aggregator powered by the 0x Protocol. This integration will drive more transactions and fees to the Bancor protocol. Swap on Matcha

Zapper Zapper’s integration of Bancor went live, allowing Zapper users to provide single-sided liquidity to Bancor pools and track their pool stakes. Provide liquidity on Zapper

Bancor’s Head of Growth Nate Hindman demoed the integration live on Yield.TV:

DeFi Dad ⟠ defidad.eth @DeFi_Dad

I'm about to demo single-sided LPs on @Bancor with @NateHindman on @Yield_TV. Bancor Selected by World Economic Forum as a Leading Crypto Use Case The first report of the WEF’s Global Future Council on Cryptocurrencies featured Bancor among 30 leading use-cases of cryptocurrencies.

Read the full report

Cross-chain development: Polkadot Bancor is currently exploring the development of a cross-chain bridge to Polkadot!

Such a bridge would enable decentralized cross-chain swaps between the Ethereum and Polkadot chains. Notably, the bridge would employ a cutting-edge design that leverages lightweight nodes which can run within a browser. This would dramatically lower the costs and barriers for anyone to become a bridging agent.

More details to be shared soon.

L2 Development: Arbitrum Bancor has been working with the Offchain Labs team on a deployment of Bancor on Arbitrum, an Optimistic Rollup protocol currently on testnet. This is part of Bancor’s efforts to enable lower latency swapping, faster settlement, and cheaper transaction costs using an Ethereum Layer 2.

We are happy to report the successful deployment of Bancor contracts on the Arbitrum testnet. Stay tuned for a front-end where users will be able to test Bancor swaps.

Admin Fee via vBNT Core Bancor community members are progressing on the research, design and implementation of a protocol admin fee that seeks to increase the incentive to stake BNT on the protocol and allows for greater value capture for BNT holders.

The latest research explores the utilization of a vBNT/BNT liquidity pool to distribute protocol fees and enable novel use-cases for the BNT token. A proposal for the design will be posted in the coming week, and if approved by the community, swiftly implemented.

Looking Forward to 2021 Looking forward to next year, the Bancor roadmap in Q1 will focus on a few key areas:

Deploy BNT liquidity mining & joint liquidity mining programs

Increase the incentives to stake BNT on the protocol

Lower the barrier for new tokens to access Bancor’s novel features (single-asset exposure & impermanent loss insurance)

Expand the reach and utility of the Bancor protocol via cross-chain and Layer 2 deployments

Greatly improve the performance and functionality of the bancor.network front-end via new Bancor APIs, as well as new trader & LP features

Implement a dynamic fee to Bancor pools which optimizes volume to the protocol and is adjustable via governance

Expand the team — we’re searching for developers, designers & more!

Happy holidays and here’s to an epic 2021! Bancor Ethereum Polkadot Arbitrum Cyptocurrency

About Help Legal

Get the Medium app