Community Call Summary — July 11, 2021

This post was originally published on Bancor

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, Yudi, Steven, and Asaf from the Bancor team. Here is a summary of the ecosystem and development updates from that call.

  • We are again hosting this call on a Sunday. Over the past two weeks, we experimented with the call on weekdays and now we are experimenting with a later time on weekends.
  • We‘d like to try out hosting this call on Twitter Spaces but due to a technical issue with the Bancor official Twitter account, we were not able to. If you are a Twitter Spaces guru, reach out to help us troubleshoot so we can host the next meeting there.
  • We will be at the Ethereum Community Conference next week in Paris. Nate, Steven, and some of our developers are going.
  • If you will be there, or if you know anyone there we should meet, please reach out to @NateHindman or @FoxSteven on Telegram.
  • As always, if you have a token project that could be whitelisted on Bancor, reach out to Steven @FoxSteven.
  • We are making awesome progress on our go-to-market strategy for Bancor V3. If you’re interested in helping us out with marketing and growth, content creation or user onboarding, please message Nate.
  • Bancor V3 is progressing. The contracts are in progress and things are going well.
  • For the first time, we will give a glimpse of the V3 rollout:
  • It’s likely that we will roll out three distinct phrases. Each phase will have a distinct set of features and we will announce these features about 1 month before each deployment.
  • The liquidity mining rewards will persist into V3 but the program is being completely redesigned to address core principles and integrate what we’ve learned in V2.1.
  • A key feature will be joint liquidity mining rewards, meaning that liquidity providers may receive BNT rewards, swap fees, and third party token rewards.
  • We’ve received a lot of common requests during the development of V3. For example, we’ve heard people call out that there is no space in certain pools or that there is friction when re-staking rewards. We are aware of this and we are addressing these concerns directly with Bancor V3.
  • As a final dev note, we are continuing to expand language support. If you click the gear icon in the top right corner of the app, you’ll find more languages being added to, the latest being Spanish and Chinese.
  • BNT was recently included in the Bitwise DeFi Index. Bitwise creates financial products designed for Wall Street to allow investment firms to get exposure to crypto. It’s a big deal and acknowledgement for Bancor to be included. It should continue to help us get institutional buy-in.
  • We’ve seen a large amount of whitelistings in the past few weeks. We could use your help to ensure these whitelistings are successful. Let people know they can get yield on these tokens with our unique features, and let people know that trading on Bancor offers low slippage trades and trading fees accrue to fellow holders instead of professional market makers.
  • If you hold any of the following tokens or know people who do, do what you can to fill up these pools and support Bancor.
  • RUNE has reached over 2.1m in liquidity. PERP has under 20k in liquidity. NEXO has around 1m in liquidity. ANKR has around 130k in liquidity.
  • BAL, COMP, ZRX, UMA, CRO, CRV, and CREAM tokens have been whitelisted in the past but only recently gained enough liquidity to activate their IL insurance.
  • New whitelisted tokens are IDLE, TRU, and wstETH from Lido. Each of the pools currently sit under $100K in liquidity.
  • In terms of upcoming liquidity mining rewards, we have proposals to extend LM on the SNX, BAT, and AAVE pools. These pools have performed well so keep an eye on those votes.
  • Other tokens are performing well recently: ENJ has reached 24m in liquidity and 10% APR yesterday. SNX, WOO, AMP, ROOK, and BOND are all highly performant. AXS has gone on a huge price run and the liquidity of that pool has increased, with APRs above 25%. Remember, everyone LP’ing AXS outside of Bancor is suffering from impermanent loss.
  • There has been a new proposal to add targeted liquidity mining for Harvest Finance’s FARM token.
  • The FARM team has said that if the Bancor pool exceeds the Uniswap liquidity for FARM, they would integrate it into the FARM buy-back mechanism on their platform, which could drive a ton of traffic to Bancor.
  • Community member Glenn: “My only concern was that once the LM program ends from our side that LPs would go back to the Uni pool and we will lose the FARM tokens.”
  • Mark: “It’s no secret that Bancor V3 will have the capacity to support external liquidity mining. I want to talk to the FARM team to make sure that they can and want to actually move the incentives over to Bancor if the liquidity is deep enough. It makes sense for their holders since we protect against impermanent loss and offer single-sided staking.”
  • Mark: “Liquidity mining incentives, including third party liquidity mining, will be part of Bancor’s V3 phase 1 release.”
  • Steven: “Speaking specifically on FARM, they are aware of this proposal and they know that the proposal is feasible. Their concern is that if they change the rewards to Bancor but then the liquidity leaves, they’ll have to switch it back to Uniswap. I suggest we delay the proposal on-chain by a week so they can start to engage with governance to discuss this.”
  • We have a liquidity mining rewards proposal for the COMP pool.
  • Glenn: “Essentially we’ve had LM rewards for large token communities like AAVE, SNX, MKR, and LINK. There’s only a few of these large communities that haven’t had LM rewards on their token. I think we can pull a large number of users into Bancor if we offer LM for COMP and introduce them to single-sided staking and IL insurance.”
  • Glenn: “The yield for COMP outside of Bancor is kind of low since you can only lend it on COMP and CREAM, which is around 1–3%. It can also be put in the Sushi pool by pairing it with ETH, and the yield is less than 10% with impermanent loss. There aren’t many places to earn yield on COMP.”
  • Glenn: “After our success getting BNT accepted as collateral on CREAM, we are looking at getting BNT listed on AAVE, and then we will try COMP afterwards. We can try for other lending platforms like Unit Protocol or MIM (Magic Internet Money) down the road.”
  • Lastly, we have whitelist proposals coming up this week for PLR, QNT, and WXT. Please vote on these proposals, whether you are for or against.

Q: What are the other projects like Harvest Finance (FARM) that we think we can have a mutual relationship with? Especially before the launch of Bancor V3.

  • Steven: “The Harvest Finance relationship started from these community calls. Someone from the community connected me with the Harvest guys and their team has been great. When I reach out through a community connection it’s a thousand times more impactful than if I reach out cold.”
  • Nate: “Are you referring to a product integration?”
  • Community member Tyler: “I’m talking about anything that can help support the protocol beyond just providing liquidity. We need to generate more trade volume. That’s the elephant in the room. We should be aggressively thinking about what other protocols can help us generate volume.”
  • Mark: “I think we’re orbiting this buy-back theme heavily but we are talking about something more broad. There’s two ways to approach something like this. One is the utilitarian approach where if you have one protocol that, for example, has to swap tokens all the time, we can integrate our existing features with them more directly.”
  • Mark: “Another way to do it is to scrape data from the Etherscan API to find all the wallets that have interacted with Bancor and find out what protocols they have interacted with. If we find out that we have many users on Bancor who are also on AAVE, for example, there is synergy we need to investigate. This same principle could work for token holdings.”

Q: My struggle is explaining the benefit of Bancor to other projects I’m involved with when they’re not familiar with it. It would be great to get material directly from Bancor that explains the benefits of our single-sided pools and case studies that show how other protocols have benefitted from Bancor. It could be a page or half a page to convince these communities to give effort and dev time. (41: 08)

  • Mark: “You want something that looks the part from us that lends it credibility.”
  • Nate: “We can definitely get you that. As part of our recent rebranding efforts, we are filtering our brand pillars through a process of making new marketing collateral. We can have an enterprise-focused one-pager like that, stay tuned.”

Q: You mentioned 30-day announcement lead times for each of the V3 phases. Do you know when the first phase is coming out? (44:00)

  • Nate: “Not yet, and the 30-day lead times are just a rough estimate. But our plan is to announce the features in each phase roughly one month before the phase is deployed so users know what to expect and have time to prepare.”

Q: It would be great to have more materials to use, like a template to evaluate whether another protocol needs to be approached? For instance what sort of analytics we can do, to show to other projects that there is some advantage to integrating with Bancor. Even for projects that I’m involved in, I don’t know where to start. (44:57)

  • Nate: “We have a site that our content contributor Korpi has used in the past that shows returns if someone staked in Uniswap or Sushi vs. Bancor. It can show the effects of impermanent loss on these stakes:
  • Steven: “We will always have the obvious advantage that these protocols want deep liquidity on AMMs, and they don’t want to have their token paired with ETH because if they think their token can outperform the market, impermanent loss makes this uncomfortable for them.”

Q: Over the last couple of weeks, I’ve noticed that the wNXM pool volume is lower. What can we do to recapture the swaps from aggregators? (52:22)

  • Mark: “Good observation. We can do rough math to see what our fee needs to be to capture from Uniswap. We know that Uniswap V3 has attracted a lot of liquidity providers, but we also know that the impermanent loss is 4–10x worse on Uniswap V3 than it was on V2. LPs are sacrificing themselves there, so enjoy the show. That said, it’s a valid concern. Our NXM fee is high compared to other pools, so I think we can lower it to see if we can draw more volume.
  • Mark: “As Uniswap v3 LPs start asking more questions, IL narratives are coming to light. You can say that Uni V3 is doing free marketing for Bancor with how bad IL has been. I don’t think it will be a problem forever.”

Q: It feels like a missed opportunity. Are the Bancor team searching for opportunities like this and able to arm us with the info so that we can help with marketing? I feel like Bancor is a little more complacent rather than combative. (57:41)

  • Mark: “I disagree that we haven’t been combative. Go scroll through some of Nate’s tweets! In some of our strategic marketing meetings, which include well-established crypto firms, we’ve actually been advised to be less combative. A lot of the time it stirs up the trolls and die hard enthusiasts who come out to challenge you, whether their points are based in reality or not.”
  • Mark: “We realized during our conversations that the simplest messages are the ones that get through. We’re not just trying to convert Uniswap LPs — we are trying to get people who aren’t supplying liquidity yet, and those who originally wrote off AMMs due to IL risk.”
  • Mark: “We are going to pivot to a more positive message. We sometimes have a chip on our shoulder as the inventor of the crypto AMM space and we can sound defensive. We can weather the messaging better when we just shrug off attacks.”
  • Mark: “We are working with consultants to develop the type of turn-key analysis that you’re talking about. We’re conscious that we don’t want to drag anyone through the mud. But I hear you, we need research materials to be available to everyone.”
  • Nate: “More and more data is coming out. Uni V3 is able to offer better prices because their LPs are getting a bad deal. The good prices Uni offers is because of impermanent loss. More of this information is coming out and disinformation is getting dispelled.”

Q: Why are Uni LPs not figuring out the impermanent loss and fleeing to Bancor? (1:09:38)

  • Mark: “The issue is that it’s not obvious. The top protocols are obscuring what the returns actually are because they don’t account for impermanent loss. For this reason, Bancor has attracted many of the LP veterans, while fresh faces are attracted to the sparkly nature of Uniswap.”
  • Mark: “So how do we turn Bancor into one of these competitive DEXs straight out of the gates? That’s partially marketing, branding, how we present ourselves, and mind-share. We will be more successful once the marketing engine starts roaring.”

Q: Ignorance plays a role but I know there are Uniswap LPs who are veterans and who are millionaires who still LP there. Why are they making this mistake? (1:12:56)

  • Nate: “It’s possible that these whales have access to tools that normal LPs don’t, which allow them to do advanced hedging.”
  • Mark: “They may be using pools to mitigate volatility. They may not necessarily be trying to beat a HODL position. These pools are a sort of options straddle to protect a large capital position.”
  • Mark: “We may not even want to target these individuals because Uni V3 is the type of competitive advantage they want, meanwhile the people we are targeting have more capital in total than these individuals. We are the lazy-man’s LP product that will appeal to our target demographic.”

Q: To circle back, I think we can focus on community engagement, like we did with LINK and with FARM. Impermanent loss isn’t well understood. (1:18:11)

  • Mark: “The way to discover what works is to engage with these communities. Whitelisting a token is often just the icebreaker. UMA, for example, was whitelisted with v2.1 and they’ve built an option contract for us for vBNT to act as a stop-loss for those who leverage vBNT. They also want to use our pools as price oracles for some of their other contracts.”
  • Mark: “These collaborations often start as white-listings which turn into more. White-listings are a good way to push communities to interact with us at scale.”

Q: The Graph, the indexing protocol, has recently released their curations on mainnet and their subgraphs have gone permissionless. Some of the curators are engaging with the DeFi communities to create subgraphs with those communities to index data on The Graph with the communities blessing. There is a subgraph for Bancor but it’s not from the Bancor community and we’re worried it may be a rugpull. I wanted to see if you were interested in either of those things. (1:21:53)

  • Mark: “We’re certainly interested in working with the Graph. Are you saying that the subgraph is fake?”
  • Community member Ishraq8: “Creating subgraphs is permissionless so anyone can do it. We’ve had one for SNX that ended up being a rugpull. It’s not clear that the Bancor subgraph is or isn’t a rugpull, we just wanted to reach out to you guys to get you involved. We would love to work with you.”
  • Yudi: “The current version of our subgraph doesn’t include all the things we have due to our protocol design. With V3, which simplifies many features, a new subgraph is one of our targets. We don’t want to commit too many resources to this until V3 is released.”
  • Nate: “Ishraq, DM me and we’ll get together a taskforce to get a robust subgraph up and running.”

Q: Do we know if the migration tool from V2 to V3 will move our positions over 1 to 1, or will it consolidate the whole position? Will the IL timer be an average in that case? (1:35:18)

  • Mark: “We won’t be throwing LPs under the bus. We are going to make sure that the migration is going to be super simple. It shouldn’t affect the anticipated value of your stake at all. For instance, when you migrate, do you migrate with your current value or your full IL protected value? I am looking to find a way to migrate your full value. In the worst case scenario, we may have to find a way to migrate some value between your full and protected value.”

Q: “Will we have to migrate our whole portfolio or migrate position by position? (1:37:42)

  • Yudi: “We want to make things simple and may have an option to migrate your whole portfolio. To keep things simple, it may be that you need to migrate position by position but we want to make it inexpensive and frictionless.”

Q: I saw a tweet about this. Will Bancor have more integrations as the backend of some DeFi or CeFi wallets? (1:38:30)

  • Nate: “Yes, actually we have a pretty big announcement coming soon. I think you’re referring to Bancor swaps and liquidity provision directly from wallets and this is a key channel. We know that the number of users who use MetaMask is somewhat limited. We have a big announcement involving another leading wallet soon.”
  • Nate: “We really appreciate the community’s efforts in pushing Metamask to integrate Bancor swaps. Many wallets will integrate an aggregator, but a direct integration is much better. This is because aggregators often put trades through their own private pools to gather fees, even at worse prices for the user.”
  • Nate: “Wherever you see a wallet that has swaps, if Bancor is not integrated directly, we’d love for you to bring it to our attention. And also bring it to the attention of wallet’s team directly because they respond best to users.”
  • Community member Tenzent: “On the Metamask thing, they closed the Bancor integration thread and said that Bancor is integrated already.”

Q: Does anyone know how trading volume breaks down into categories such as whales, small users, aggregators, or arbitrageurs? (1:44:07)

  • Mark: “There’s no easy answer. It breaks down differently depending on the token and market cycle. It happens differently between DEXs as well. At one time we put together a bunch of charts to identify what we thought were bots. For the token we looked at (OCEAN), most of the trades were arbitrage bots, small trades were going through Uniswap despite the slippage being worse, while large trades were going through Bancor. We’ve always been aware of this division: traders are not one uniform group of people.”
  • Mark: “Bancor and Sushi attract much larger trades less frequently, while Uniswap attracts much smaller trades more frequently. It’s not totally clear why that is. I’m still looking at an in-depth answer involving pool depth, pool fees, and gas prices. In the future, we want to create an accurate description of the types of traders that trade on Bancor.”
  • Asaf: “Even though we saw a lot of smaller trades on Uniswap. When we dug deeper, over 80% of these wallets perform more than five trades an hour, hour over hour, so that they are probably not humans. It’s hard to determine who is a user and who is a bot. We are trying to figure out how to bring these traders to the table.”
  • Nate: “We’ve seen the average trade size on Bancor drop and the amount of unique traders increase, which says to me that we are increasing adoption among retail traders.”
  • Asaf: “Due to recent white-listings and more token onboarding, we’ve brought on more LPs and communities. We’re doing trader interviews and liquidity provider interviews. One trader told us that when he sees Bancor as an option in an aggregator, he will take it since he has liquidity with us. He felt it was his duty to help the community. This is the type of cycle that we’re building. We just need to keep pushing our message.”

Wrap Up and Asks

Ethereum Community Conference:

  • We will be at the Ethereum Community Conference next week in Paris. Nate, Steven, and some of our developers are going.
  • If you will be there, or if you know anyone there we should meet, please reach out to @NateHindman or @FoxSteven on Telegram.

Go-to-market Strategy:

  • 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.
  • Front-End Developers: 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!

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.

Bancor Grants:

  • 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.

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