• Bancor reveals “Bancor 3” which aims to increase trading volume and make it cheaper for everyday users to earn on their favorite tokens.
• Bancor 3 will roll out in three phases: Dawn Sunrise and Daylight.
• At the Dcentralcon Conference, Miami on Tuesday November 30, Bancor 3’s contributors will reveal Bancor 3.

With new use cases and innovations appearing every day, each day marks a new day in DeFi. Visionary inventors not only use the technology’s potential, but also propose solutions to make cryptocurrency a worldwide phenomenon. One such solution is staking.

The new world of staking, as many crypto investors know, is one that many enthusiasts and investors are eager to explore. Bancor, the only decentralized staking product that allows its users to earn money with single-token exposure and full protection from impermanent loss, discloses the first details of its long-awaited third version, called “Bancor 3.”

Bancor 2 was designed by the Bancor team to provide the most user-friendly platform possible. Bancor V3 is designed to increase trading volume and make it more affordable for everyone to trade their tokens. The protocol has already famed itself in the market as a true “set and forget” staking product for token holders seeking safe and reliable yields by removing impermanent loss risk for depositors in Bancor V2.1.

Bancor contributors state that maintaining equal playing fields for everyone is essential to the preservation of decentralized liquidity market. These features are included in the Bancor 3:

• Omnipool: Compared to the previous version that required trades to be processed via BNT, creating an extra transaction and added gas costs, Bancor 3 comes with an “Omnipool” that allows for all trades on the network to happen in a single transaction. Omnipool is guaranteed to lower the cost of gas and allow Bancor draw higher trading fees while maintaining the same liquidity. This makes the protocol more capital-efficient.
• Infinity Pools: Bancor 3 will have no deposit limit on Bancor liquidity pool deposits. Unlike the V2.1 where users had to wait for space to open up in a pool before they were allowed to deposit their tokens, thus restricting the protocol’s growth. Similarly, Infinity pools present the concept of “trading liquidity” and “superfluid liquidity”. In general, trading liquidity is for market-making. Superfluid liquid is used in fee-earning strategy that is both external and native to the protocol.
• Bancor 3 offers instant impermanent loss protection. Contrary to Bancor 2.0 where you could accumulate full impermanent loss protection by holding your tokens for 100 days.
• Liquidity direction: BancorDAO can now invest BNT owned by the protocol in its pools. It also earns fees for protocol. DAO now has the power to approve or deny the participation of protocol-owned BNT to any pool. If the pool proves inefficient, it can direct BNT liquidity to other pools. By directing BNT from low-performing pools to the highest profit pools, the DAO is able to optimize the protocol fees paid by Bancor, BNT holders and LPs.
• Bancor 3 has auto-compounding. In Bancor 3, trading fees as well as rewards, are automatically re-added into the pool. Users can earn more by doing less. In Bancor v2.1, users had to manually add their rewards to the pool. This cost them gas, but only the trading fees were automatically added by the protocol.
• Dual-Sided Rewards : Bancor v2.1 was the only company that could boost its liquidity with BNT reward. Bancor 3 token projects are now able to offer rewards for their pools. Depositors will be able to benefit from dual-sided incentives, which can result in more BNT. Moreover, most of the tokens they’re staking will be free from the risk of impermanent loss.

Bancor 3 will also include a variety of cutting-edge features, including multichain support and L2 support. Chainlink Keepers integration will facilitate token burning and a single click migration.

The above-mentioned features will all go live with the deployment of Bancor 3’s first phase, code-named “Dawn”. Bancor 3’s first phase will roll out in three phases: 1) Dawn; 2) Sunrise and 3) Daylight.

The code for Bancor 3’s Dawn phase will be open-sourced in the coming weeks with a public bug bounty and eventually activated pending a vote by the BancorDAO. The target release date is set for 2022. On Tuesday, November 30, Bancor 3 will be unveiled by Bancor contributors at the Dcentralcon Conference in Miami. Interestingly, community members will hand out custom “Safe DEX” Bancor condoms as a reminder to always use impermanent loss protection at the event. Bancor’s Head of Growth, Nate Hindman, states,

The industry is concerned about the threat of permanent loss. This would make liquidity pools inaccessible to ordinary users and render DeFi unusable to wealthy and sophisticated users. We must prevent DeFi from becoming a playground for the rich and connected to extract value from protocols and dump on everyone else — and this starts with fixing liquidity pools.

Hindman adds on, “Bancor 3 marks a new day for DeFi — one in which people and projects retake DeFi’s core building block to bring community-sourced liquidity to masses.”

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