Bancor hosts weekly community calls with core contributors every week in Bancor’s Telegram voice chat.
This week, Nate hosted the call with input from Mark, and Yudi. Here is a summary of the ecosystem and development updates from that call.
- Grayscale, the investment firm, announced that BNT is one token being explored as an investment vehicle, which is a great validation of Bancor as a leading DeFi project.
- Despite the ongoing downturn in the market, Liquidity Providers on Bancor are benefitting. Trading fee APRs on major pools are in the double digits and weekly average APRs are close to 5% across the network.
- If you were a Uniswap v3 LP, your liquidity might be pushed out of its price range due to the recent volatility and you would need to manually re-add it to continue earning fees.
- Sushi LPs are suffering IL as the price of assets diverge.
- Meanwhile, Bancor pools are protected against IL and earning fees from the current volatility.
- The GTC pool went live and had its pool liquidity seeded.
- The Gitcoin team, due to their token distribution, are currently not able to directly promote the secondary market for their token.
- If anyone is or knows a GTC holder, let them know so we can fill up the GTC side of that pool.
- The SUSHI pool, which was whitelisted two weeks ago, has had its liquidity seeded and is open for swaps.
- CHZ, NOIA, HOT, and RMB were also whitelisted.
- Proposals this week include a whitelist proposal for FARM. The Harvest team has said that they want the Bancor pool to be their deepest in DeFi and are considering profit sharing schemes with Bancor.
- Whitelisting proposals this week include: LQTY, NAOS, and ORBS.
- Other proposals include increasing coinvestment for WOO, lowering the MKR pool fee, and reducing liquidity mining rewards on stablecoin pools.
- Korpi, who writes some of the best and most informative Twitter threads in DeFi, wrote an excellent Medium post about BNT supply and tokenomics and a twitter thread summarizing the post. We have another one of his posts coming out soon which will examine profits among AMMs.
- We are heads down working on Bancor V3, currently coding and building the contracts. We are excited to share more information with you when we’re ready.
- We are building a V3 go-to-market strategy to simplify our message so that the community can help us spread the word.
- We know we have the best LP product in crypto. What we don’t have is awareness.
- We’re building a survey that will first be run on Bancor users to help bring the voice of our users into our messaging. We want to co-create our marketing stack with you.
- Anyone who wants to get more involved with our marketing, DM @NateHindman on Telegram to pitch in.
- In particular, feel free let Nate know of any communities where you think Bancor can be more active.
- Lido does liquid Ethereum staking meaning that when you stake your ETH with Lido, the value of your ETH is still liquid.
- We mint tokens that are pegged 1:1 with your ETH and you can use these tokens across DeFi to earn additional yield.
- Unlike traditional ETH staking, Lido helps protect you against slashing and other validator issues.
- We have a partnership with P2P.org and other big names in the industry.
- We allow stakers to enter with any amount of ETH because we put all our assets together and stake them with our network of validators.
- In particular, we make staking ETH 2.0 easy while large actors are controlling the space which is important for decentralization.
- More than 9% of all staked Ethereum is staked with Lido.
- The wstETH token is mostly present on Curve but we want to have deep pools across DeFi, which is why we love Bancor.
- When Bancor V3 is launched, we are likely to incentivize or co-incentivize the wstETH pool as we’ve done for other protocols.
- Our great community member Glenn has made a proposal on the Cream DAO to onboard BNT.
- Cream is a decentralized lending platform which had its token recently whitelisted at Bancor.
- At the moment, BNT is not listed as collateral on any lending platforms.
- We offer the CREAM community single-sided staking with IL insurance currently and their DAO will hopefully vote in our favor.
- Glenn: “BNT is a reliable asset and the risk to them is minimal.”
- If anyone is interested in lending/taking a loan against BNT, go to Cream’s governance forum to make yourself heard.
- If you hold or know a CREAM holder, let them know about this proposal to help it pass.
- Hopefully BNT is a foot in the door to eventually get an asset like vBNT onboarded.
- Mark, on vBNT becoming a collateral asset: “As Glenn pointed out, it’s challenging because vBNT is a relatively new token. vBNT is not listed on centralized exchanges and the DEX liquidity is too concentrated on Bancor to be acceptable as collateral.”
- Mark: “The best place to stake vBNT is Bancor due to impermanent loss insurance. Until other DEXs offer IL insurance, this problem may not go away.”
- Mark: “We are a long way off of vBNT being accepted as collateral but it’s not impossible.”
Q: Inflation continues to be a big topic. Most of the “inflation” of BNT comes from protocol-owned BNT and the amount of BNT owned by the protocol keeps increasing. How can we return some of that value to BNT holders and LPs?
- Mark: “This is actually what Liquidity Mining does. What most people do with liquidity mining rewards is stake it, which replaces protocol BNT (which is then burned). LM rewards is mostly a way of transferring protocol BNT to users.”
- Mark: “We want to make sure that protocol-owned BNT remains high compared to user-owned BNT. We are healthy in terms of that split right now. We are confident that our new rewards program will still kick ass with Bancor V3.”
- Mark: “Eventually there will be a shift to reduce liquidity mining rewards and once Bancor is at that stage, we expect protocol-owned BNT to grow rapidly and exceed user-owned BNT, which is what we want.”
- Mark: “Protocol-owned BNT doesn’t dilute anyone because the protocol never sells while users sell. The economic impact of protocol-owned BNT is almost zero sum.”
Q: If liquidity increases in a pool, like when the protocol mints BNT, doesn’t it take more money to move the price of BNT?
- Mark: “It’s important to remember that because BNT is on a bonding curve, it remains as volatile as the assets it is paired with. As long as we’re careful to pick assets, it garners the momentum of the tokens. We saw BNT greatly increase relative to the market before.”
- Mark: “There are other mechanisms I’m investigating that would help make BNT a more speculative asset but it’s not something we need to be concerned about.”
Q: When is the team expecting to launch Bancor on Matic or Arbitrum?
- Yudi: “As we discussed on earlier calls, we do want to launch on Layer 2 but we need to wait until after V3 is launched so it doesn’t distract us.”
- Yudi: “It’s not worth deploying V2.1 on L2 now only to have to upgrade both deployments.”
On the May 30 Community Call, Mark and Yudi discussed deploying to L2.
- Mark, May 30: We are going to finalize V3 and then rapidly deploy it to L2 solutions. DeFi thought leaders on Twitter, including from Aave & Uniswap, are urging caution for L2 solutions. Since it is still unproven technology, it may be best to wait to see which L2 solution is the ‘correct’ one before deploying. We are excited by Polygon and it isn’t having the security issues that were predicted. We are observing the L2 space diligently and waiting to see what the right decision is.
- Yudi, May 30: The requirements for us to deploy on L2 solutions are 1) the L2 must be mature enough. We don’t want to be the first and then suffer from some exploit. 2) We need enough users and not just short-term hype. We don’t want to maintain a platform that was hyped only to see users leave. 3) The best time to deploy to L2 is once V3 is out. We are not going to pick a single L2 solution. We intend to deploy on any solution that meets these requirements.
Q: It’s hard to keep track of what is being developed, especially in terms of marketing. I hope we can create a Medium post to show these developments. For example, are shadow pools going to be part of V3?
- Yudi: “Shadows pool are part of V3. Our V3 plan is going to be a rolling release and shadow pools are going to be one of those releases.”
- Nate: “I agree. We owe the community an update to help align people. More information on V3 is coming.”
- Yudi: “A rolling release is better in terms of getting to market faster and in terms of security.”
Q: Will BNT ever have a single-staking rate or will it always be based on the pool? Since BNT is in every pool, you would think that there would be a single dynamic pool that allocates BNT which would give all BNT stakes a single rate.
- Nate: “There will be some fundamental changes in V3 that are related to that and somewhat along those lines. A staker may not want to have to choose or speculate on what pool is the best for their BNT. The protocol should just know — and stake the BNT on behalf of the user where it is most helpful for the network and most lucrative for the LP.”
- Yudi: “Something we can say about V3 is that the goal is to make it simple for the end-user and for developers. We want the simplest experience that we can make. We can’t say much more beyond that.”
Wrapup and Asks (53:12)
- Sidenote: We are seeing trader traffic materialize and the analytics are encouraging!
- Check out our Dune Analytics around trade and trader count to see the strong growth.
- We are building a list of people whom we think can help us spread the word about Bancor.
- Send your influencers to @NateHindman on telgram/twitter! Anyone you follow with an audience in DeFi, crypto, or general investing — on Twitter, YouTube, or elsewhere — especially the non-obvious ones, send them to Nate.
- We’re building focus groups of core Bancor community members interested in helping co-create Bancor’s go-to-market strategy in the lead up to Bancor V3.
- We have an incredible opportunity to build awareness in DeFi, crypto, and mainstream communities. We have a killer product and we just need to get the messaging right and spread the word!
- DM @NateHindman on Twitter or Telegram if you’d like to get more involved in our efforts to spread awareness. Feel free to message us with any communities where Bancor should be more active.
- Keep an eye out for a user survey we’re sending out and please take the time to fill out!
- Your insights really help us understand our users and how to better serve them.
- We’re looking for front-end devs with blockchain experience to join as a full-time core contributor. Let us know if that’s you or someone you know!
Vote on Live Proposals:
Fill Up the Pools:
- If there is space in a Bancor whitelisted pool, it means there is work to be done in the respective community to build awareness on Bancor and why it’s the best place to earn yield on your tokens
- If you or someone you know is active in these token communities, help spread the word!
- There are several new pools to check out (GTC, NOIA, HOT, RNB, SUSHI) and also key pools with open space and great rates (ETH, LINK, WBTC, MATIC, etc)
Connect Projects with Steven, Bancor BD 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.
- 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 use your help!
- As always, we have rolling developer grants for those who want to build and innovate on Bancor’s infrastructure.