In this week’s Community Call recording, Bancor shared the development updates above and discussed governance proposals on discourse.
Discussing the proposal to restructure LM in the EDEN pool
The main two concerns with the Eden Network’s prioritization of Bancor transactions are that:
- It’s difficult to verify what an EDEN block precisely is;
- There’s a front-running/back-running arbitrage bot in the Slot 1 tenancy position, which can still anticipate what’s going to happen and make compensatory actions to extract value that way.
Bancor has been frequently ejected from its tenancy position since LM began in the EDEN pool on the condition it would be prioritized. This isn’t necessarily the Eden team’s fault, but the project’s tokenomics model takes over eventually.
The DAO has therefore proposed to transfer 100% of LM rewards in that pool to BNT holders. However, it’s worth remembering that the pool has performed very well on account of EDEN’s price volatility.
James from Eden said that Slot #1 sitting above the Bancor slot is a bot that can’t do bundles, so the negative externalities to Bancor users are limited. There’s game theory involved because if it’s put up too high, Bancor will never own a slot.
Discussing the Unfederal Reserve (eRSDL) LM request for buy-back implementation
The eRSDL token will be purchased by banking and non-lending institutions as licensing fees to use their software as a servicing platform; the team will buy it back from those organizations to distribute or burn. The proposal, therefore, aims to have Bancor as the back-end for these transactions. An incentive to provide liquidity for this would be very helpful.
Will third-party LM on V3 solve a lot of friction we currently have with whitelisting proposals?
Yes, because vBNT holders will no longer feel tied to a particular project if some of them don’t want LM for it.
Why are we paying such high rewards for LM in stable coin pools? We are currently paying 30–55% rather than 10%
It’s partly this high because some of the liquidity has recently left. LM was halved not too long ago, because DeFi is losing interest in stable coins, and APY went back up simply because positions in the pool were exited.
Can we change the rate of LM emissions after we renew them?
Yes, but it requires an expensive migration and comes with some risk. The best option is to shorten an LM cycle and supersede it with a new arrangement.
Are we interested in using OlympusDAO?
One of our economists is taking an in-depth look at it.
Are there technical difficulties involved in migrating our codebase to chains written in different programming languages?
We have more experience with Solidity than with newer chains that require other programming languages. The fact that some are not fully compatible with EVM is a challenge, and we would enlist an external team to work on porting the code if needs be. Right now, the EVM support on chains such as Solana is insufficient. Our preference for new deployments is our community’s preference; we’ll find the right configuration to make it happen.
Are Bancor monitoring dYdX? They’re on Ethereum L1 with roll-ups and it’s working well
Our three requirements for deploying on a new chain are
- The maturity of the chain
- The popularity of the chain
- Bancor V3 being ready
Right now, roll-ups are less mature than Arbitrum and Polygon.
Are we concerned about Bancor V3 being forked on other blockchains we don’t deploy on?
Forking is nothing new, and it wouldn’t disrupt our momentum and first-mover advantage as the first AMM in the space.
Didn’t Mark already express a preference for Polygon as an L2 deployment?
Yes, because it’s the oldest of the L2 solutions; its testnet was out for 12 months before mainnet. It drew in a large community, and the quiet period now is purely indicative of a new, temporary hype cycle. Avalanche as an L1 may be too early to call, given it had a double-mint issue recently. Something so broad in scope and large in scale needs time to mature, whereas Polygon comes with less uncertainty. Polygon is also just a carbon copy of Ethereum in terms of contracts you can deploy on there. Finally, some other L1s have simultaneous (rather than ordered) transactions, which can interfere with the way AMMs are ordered.
Do you have any plans for lending on Bancor?
It’s not off the table and a very interesting idea. Over time, you’ll see a lot of DeFi protocols increasingly resembling each other. It would be outlandish if Bancor didn’t incorporate lending in the future. Bancor has features that would allow us to execute lending in a fruitful way.
🤝Connect Projects with Steven, Bancor Business Development 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 (@NateHindman on Twitter or telegram).
- 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 always use your help!
- As always, we have rolling developer grants for those who want to build and innovate on Bancor’s infrastructure.