Bancor 3 adds new features designed to boost trading volume while making it more accessible and affordable for ordinary users to make their tokens profitable. By removing impermanent loss risk for depositors in Bancor V2.1, the protocol has already distinguished itself in the market as a true “set and forget” staking product for token holders seeking safe and reliable yields. Bancor 3 expands on this design principle. Bancor contributors believe that it is essential to maintain decentralized liquidity markets because professional and high-frequency users are convergent on DeFi.

Bancor 3 Highlights:

• An “Omnipool” that allows for all trades on the network to occur in a single transaction. Bancor’s previous version required trades to be processed via BNT, creating an extra transaction and added gas costs compared with competing DEXs. Omnipool will lower gas prices and allow Bancor to get more trading fees for the same amount of liquidity. This protocol is more capital efficient.
• Infinity Pools: There are no longer deposit limits on Bancor liquidity pools (previously, users had to wait for space to open up in a pool before being able to deposit their tokens, constraining the protocol’s growth). Infinity pools also introduce the concept of “trading liquidity” and “superfluid liquidity”. Superfluid liquidity may be used to pay fees for both the native and foreign strategies. Trading liquidity is needed for market-making.
• Protection against permanent and immediate lossBancor v2.1 provided full Impermanent loss protection by holding your tokens for at least 100 days in a pool. Bancor 3 offers full Impermanent loss protection from the beginning.
• Auto-Compounding RewardsBancor v2.1 used to require users to manually add their rewards to the pool. This cost them gas and only trading fees were automatically added by the protocol. The pool now automatically adds both rewards and trading fees to it, which allows users to make even more from less work.
• Dual-Sided Rewards:Bancor v2.1 was the only company that could reward liquidity pool users with BNT. In Bancor 3, token projects can now also offer rewards on their pools, so depositors can benefit from dual-sided rewards, earning more BNT and more of the token they’re staking, free from the risk of impermanent loss.
• The Direction of LiquidityBancor 3 now gives the BancorDAO the ability to invest BNT protocol-owned in its pools, and also generate fees for protocol. If a pool is not performing well, the DAO has the power to vote to reduce the BNT protocol-owned in that pool and to direct BNT liquidity towards more lucrative pools. DAO can direct BNT away form underperforming pools to the most lucrative pools within the network and optimize protocols fees. Bancor, BNT holders, and LPs will also benefit.

Bancor 3 features a host of new game-changing capabilities, such as multichain and L2 integration, Chainlink Keepers integration to enable more efficient token-burning, revamped front-ends, third party impermanent Loss Protection, single-click migration of Bancor V2.1 and other DeFi protocol protocols. The aforementioned features will all go live with the deployment of Bancor 3’s first phase, code-named “Dawn”. Bancor 3 will roll out in 3 distinct phases.

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. An early 2022 release target is expected. On Tuesday, November 30, Bancor 3 will be unveiled by Bancor 3 contributors at Dcentralcon in Miami. At the event, community members will hand out custom “Safe DEX” Bancor condoms as a reminder to always use impermanent loss protection.

Nate Hindman, Bancor’s Head of Growth, said:

“Across the industry, the issue of impermanent loss threatens to undermine the core tenets of DeFi by making liquidity pools unusable by ordinary users, and accessible to only the most sophisticated and wealthy 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 said:

“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.”

EMAIL NEWSLETTER

Get the other side of crypto!

Upgrade your inbox and get our DailyCoin editors’ picks 1x a week delivered straight to your inbox.

[contact-form-7]
It takes just one click to unsubscribe.

Continue reading on DailyCoin