September 2021 ended with a total of ~215K $vBNT burned in total. On 9/8 we saw one of the highest burns (~21k) since the inception of the vortex
This is inline with the last 5 months in which we have burned >~200K $vBNT monthly 🌀🔥
| time | burnedamount |
| 4/1/2021 0:00 | 66613.12837 |
| 5/1/2021 0:00 | 234190.261 |
| 6/1/2021 0:00 | 240030.686 |
| 7/1/2021 0:00 | 212623.0538 |
| 8/1/2021 0:00 | 281869.4172 |
| 9/1/2021 0:00 | 214951.2059 |
For this week, we saw roughly ~34K in $vBNT that was burned by the vortex. At current BNT prices (~$4) this equates to ~$136K worth of $BNT locked forever. 🔒
| time | burnedamount |
| 9/26/2021 0:00 | 4334.940002 |
| 9/27/2021 0:00 | 4324.199758 |
| 9/28/2021 0:00 | 5225.247785 |
| 9/29/2021 0:00 | 6738.227584 |
| 9/30/2021 0:00 | 4576.661794 |
| 10/1/2021 0:00 | 4152.765652 |
| 10/2/2021 0:00 | 4472.588928 |
| Sum | 33824.6315 |
The cumulative burned amount increased from ~1.225m on 9/25 to ~1.259m on 10/2.
📊 Key Metrics
7-day total cumulative fee revenue: ~$732K
30-day total fee revenue: ~$4.9m
Source: token terminal
📈 The average daily revenue for different time periods:
- 7 days ~$105K
- 30 days ~$163K
For the past 30-days, trading fee revenue is slightly down ($600K) as compared to the previous 30 days. Annualized, that’s around ~$59.5m in annual trading fees paid to LPs.
💰In terms of protocol revenue, Bancor is the third largest DEX on Ethereum, with around $2.27m in monthly revenue earned by $BNT holders. It is ranked the 7th lowest by Price to Sales (P/S) ratio compared to other crypto projects
Source: token terminal
🔌Integrations and Updates
- We have spent time doing a comprehensive study on divergence loss (impermanent loss) and profitability in Uniswap V3. We are looking at how concentrated liquidity strategies are actually working out for LPs since its inception. There is significant attention placed on volume and fees in DeFi protocols without considering the costs (in this case, IL). For the majority of LPs in Uni V3, data shows that they are losing money as IL costs are greater than fees earned.
- Specifically, we have looked at the top 17 pools by value locked and excluded those with “like-kind assets” (two assets that track each other in price closely). On aggregate, about 60% of users who provided liquidity to the top 17 pools have lost money. In certain pools, that number is as high as 80%. This reality is often obscured from users as directionally their holdings may be worth more because the prices of the assets have gone up but they can’t see that they are losing money vs. simply holding the assets on their own outside the pool.
- The questions then becomes, why is there still significant liquidity in Uni V3? In short, many people don’t know that they are losing money and we don’t think that is sustainable in the long term. We think token holders are better off in protected pools and a big part of this study is educating the community on the real cost of IL. There are thousands of token holders that are currently shorting their own bags without realizing it. We are hoping to finalize our report soon and deliver our results to the broader DeFi community.
- In conjunction with the Uni V3 study, we are also planning an aggressive campaign to help get the word out. We will have bounties available that will allow you to get paid to help distribute this educational information. If you have ideas about bounties that we can implement then let us know in discourse.
🏫Take me back to school
WOW! Both of these threads are a great read to understand the intricacies of Divergence Loss (Impermanent Loss). Plenty of graphs, equations, and examples to explain this concept that is elusive for many to understand. Be warned, this is not for the faint of heart and might require spending some time to analyze the information provided. This is quite the big 🧠 analysis from Oscar D Torson.
Real recognize real. The amount of low effort crypto projects launching daily leads to a false narrative that things move quicker than they actually are. With every new blockchain launch, a number of projects that forked other protocols follow to try to capitalize on the initial rush. There are very few teams that are innovating and bringing new primitives to DeFi.
I wrote a thread recently explaining the introduction of Pool (LP) tokens as part of V3. There is some good information if you are trying to get an understanding of what this means.
If the community calls from the previous weeks are any indication, the data from this study should shed some light regarding how profitable LP positions on Uni V3 actually are. The preliminary information doesn’t bode well, but we will have to wait for the full report to be published.
🎩Bancorians in the Wild
A collection of weekly tweets from some of the greatest Bancorians 🧠💪
There were no governance proposals this past week (9/26/21).
For this week (10/3/21), we have three proposals up for voting:
Head over to snapshot to cast your votes.
❗️ If you aren’t voting regularly make sure you unstake your vBNT from governance and delegate instead. Self-nominated delegates maintain a page on Discourse to inform other community members of their intended voting behavior. If you disagree with the way your delegate votes, you can always vote manually to override their decision on your behalf.❗️