Bancor 3 Goes Live With No Deposit Limits on Its Liquidity Pools
May 13, 2022 at 12:00 pm
by Rony Roy
Bancor 3 has introduced a number of new architectural modifications and features, including Omnipool, rapid impermanent loss protection, and others. DAOs and their token holders will benefit from the new capabilities designed to make DeFi staking easier.
Bancor 3 Pledges to Protect Liquidity Providers
Decentralized finance protocol Bancor has provided a new solution to the problem of liquidity pools with the introduction of its v3, known as Bancor 3.
The launch of Bancor 3 was accompanied by a commitment to safeguarding liquidity providers from impermanent loss. The new architectural modifications are expected to provide sustained on-chain liquidity and make decentralized finance (DeFi) staking more manageable for decentralized autonomous organizations (DAOs).
In November, Bancor Protocol presented Version 3 Features for the first time. More than 30 projects and tokens, such as Synthetix Network Token (SNX), Polygon’s MATIC, Brave’s Basic Attention Token (BAT), Yearn.finance’s YFI, Enjin Coin (ENJ), and Flexa’s AMP, as well as a few DAOs, have shown interest in Bancor v3’s latest protocol launch.
Bancor v2 was the first to implement single-sided staking to safeguard traders from impermanent losses. In any case, the previous edition was plagued by a high entry hurdle and high gas prices. Bancor 3 promises complete impermanent loss protection for minimal gas fees.
Liquidity is the most important aspect of the DeFi ecosystem, yet a number of prominent protocols have experienced difficulties in maintaining a long-term mining strategy for liquidity.
“In Bancor 3, the protocol utilizes an improved set of operations that allows the network to better manage its liabilities, resulting in a more cost-efficient method of providing impermanent loss compensation,” said Mark Richardson, product architect at Bancor, while explaining the chief architecture changes and the new liquidity solution.
Added Benefits for Bancor 3 Users
Bancor 3 has implemented a number of new architectural modifications and features, such as Omnipool, auto-compounding rewards, instantaneous impermanent loss protection, dual rewards, and superfluid liquidity. The Omnipool is a single virtual storage for token liquidity.
In addition, Richardson explained that Omnipool could use protocol-earned fees from one pool to reimburse a user for an impermanent loss in another pool. This may reduce transaction fee slippage and increase efficiency.
Bancor 3 had attracted over $75 million TVL in its first 12 hours after its release. At the time of writing, Bancor had a TVL of above 559 million. The 24-hour trading volume had risen by 14%, as recorded by coinmarketcap.
Streamlining Safe User Experience
Bancor Network (BNT), an Ethereum-based on-chain liquidity provider, announced in August that it would incorporate Chainlink Keepers as part of its upcoming V3 upgrade that promises to streamline the user experience in relation to staking crypto-assets and providing liquidity.
Chainlink Keepers, for the uninitiated, is a decentralized service that uses low-cost, verifiable off-chain compute to automate on-chain procedures when certain predetermined conditions are met.
Bancor, considered to be the “godfather” of decentralized finance (DeFi), released condom NFTs on February 14 in an effort to raise awareness about the hazards associated with using decentralized exchanges (DEXs) to stake and earn tokens.