Bancor hosts weekly community calls with core contributors every week.
This week’s recording can be found here
Nate hosted the call with input from Mark and Eyal. They were joined by Zack Gall from LiquidApps and Emma-Jane MacKinnon-Lee from DIGITALAX. Below is a summary of the ecosystem & development updates from the call.
Quick Asks of the Community (1:15)
- We have a new swap API for wallets to more easily integrate Bancor swaps. If you know of any wallets which aren’t already tapping into Bancor’s deep liquidity to offer always-available swaps & the best prices to their users, contact @FoxSteven on Telegram to let us know and tell the wallets you want to see Bancor integrated!
- We’re looking for DeFi educators interested in creating crypto & DeFi content about Bancor — video explainers, tutorials, informational graphics/GIFs, fact sheets — especially especially as our upcoming V3 approaches. Contact @NateHindman on Telegram if this is something you‘re interested in working on.
Ethcc Conference, Paris
- Was great to finally meet many of the protocols we’ve worked with face to face.
- Successful meetings with investors and key developers in the Ethereum ecosystem and across different blockchains.
- A recurring question : What will “institutional” DeFi look like and how do we get regulatory clarity?
- Met with numerous teams seeking on-chain liquidity solutions for their token or trading and yield strategies.
- Key takeaway was Bancor’s solutions remains uniquely positioned compared to other AMM designs in the industry to serve the needs of token projects, LPs and on-chain financial apps.
Ecosystem Growth
- Bancor’s trader count is continuing to rise — traders are coming directly to the swap.bancor.network, as well as from other apps and arbs.
- Average swap fee APR across the network is steady around 5% (before accounting for liquidity mining rewards). Pools like AXS, SNX, MATIC and AMP continue to drive 10–30%+ APRs
- The COMP/BNT pool was selected for Liquidity Mining, and liquidity in the pool has increased to $10m in liquidity, driving more attention with the Compound community and a new stream of revenue to BNT holders.
- Mark: vBNT burning is trended upwards. 10% of the swap revenue on Bancor is now being used to buy vBNT from the vBNT/BNT pool and burn the vBNT, causing BNT being locked in the protocol forever.
- The lower the vBNT price is relative to BNT, the more efficient the burning mechanism. If the vBNT/BNT price ratio is 0.5/1, every vBNT burned is locking 2 dollars of BNT in the protocol forever. We’re one of the only protocols burning tokens at an accelerating rate, so the longer the vBNT price stays this low, the more deflationary this process becomes on BNT.
Development Updates (17:00)
- New updates and designs in the swap UI will go live in the coming weeks.
- A new back-end developer who is extremely talented joined as a full-time contributor to Bancor after working part-time on Bancor APIs. Combined with our recent hire of a data analyst, this will help us greatly improve visibility into protocol stats and provide better data on pool and network statistics to external integrators.
- Development of Bancor V3 contracts are progressing rapidly. With the contracts well underway, focus is shifting to creating the front-end screens to support liquidity migration from V2.1 to V3, and Bancor V3's new pools and functionality.
- V3’s ethos: “Make DeFi as simple as possible”, i.e. make staking and trading on Bancor as easy as possible. This includes simplifying the process of re-staking rewards, accessing yield on different pools and accessing IL protection.
Governance (21:05)
New proposals going live this Monday July 26th.
Voting: vote.bancor.network
Discussions: gov.bancor.network
Highlights:
- Extension on stablecoin and wNXM liquidity mining
- Whitelists: VISION, EVEREST, MONA and DAPP tokens
- Increase BNT co-investment limit in the QNT/BNT pool
An introduction to the DAPP Network and token (23:15)
- DAPP Network was invented by Tal Muskal, a former senior technical consultant to Bancor. It launched in 2019 and has recently started moving its network from EOS to Ethereum.
- DAPP Network is a scaling solution for applications on Ethereum Virtual Machine (EVM)-based blockchains. Its native token has multiple utilities, including: IBFS storage (similar to Filecoin), oracles, IBC (like Ren Protocol)
- Coming soon is EdgeOS — a blockchain-agnostic operating system that will allow for many-to-many token bridging. This aims to quicken the process of moving tokens between blockchains compared to the current bi-lateral bridges.
The DAPP team’s offer to Bancor: External IL Protection (23:15)
- 1.4% of the token’s supply is currently on Ethereum, but they want that figure to rise to 10% going forward. The team and community want Bancor to be the liquidity hub with a large number of fees from DAPP transactions routed through Bancor.
- They plan to reduce BNT’s exposure to IL by providing external IL protection on the DAPP/BNT pool. Where IL is present on the DAPP side of the pool, Bancor’s usual compensation in the form of BNT will be intercepted, burned, and replaced with an equivalent dollar value of DAPP tokens — matching the exact value of IL.
- All of this will be included in the open-source contract, and will ideally serve as a template for future external IL protection programs with other projects.
- Nate: This external IL protection mechanism will be a way for Bancor to offer IL protection to more tokens, while reducing the cost to the Bancor protocol. People will receive IL protection in the token they’ve staked, rather than receiving BNT which they may liquidate.
- Eyal: We want to give the DAO control over the size of an individual pool from a strategic point of view, which currently is not being discussed in DAOs generally.
- DAPP’s rewards mechanism will also be designed to reward locking liquidity into Bancor for longer periods of time.
An introduction to DIGITALAX from Emma-Jayne (46:10)
- A web3 fashion protocol using fashion as a tool to onboard people into DeFi.
- Just as there’s exploitation in centralized models in the traditional finance industry which gave birth to DeFi, DIGITALAX seeks to reduce exploitation in the traditional finance industry using decentralised technology.
- The MONA token went live in 2020. Since then, an ecosystem has been built to accommodate digital fashion, NFTs, physical fashion, and global designer network DAOs.
- DIGITALAX has a casual E-Sports platform using a similar play-to-earn model to Axie Infinity — players buy fashion and take it to different game environments such as Fortnite and Minecraft, and get paid out in MONA if they win.
- Emma-Jayne: “If Web3 is really going to grow and scale beyond the minority that it’s interacting with today, going up to someone in the street and talking to them about yield farming or AMMs goes completely over their heads…if we can use a tool or mechanism that [non-Defi users] are already familiar with and has already been adopted by all of humanity, our chances of serving their desires and tapping into their needs becomes much greater”.
- Nate: “How do I go about getting one of [DIGITALAX’s hoodies and hats]?”
- Emma-Jayne: Go to drip.digitalax.xyz, connect your Wallet, and choose the ‘swag’.
- Digital NFTs retain value as they can be staked for crypto rewards, even after the physical item has been redeemed.
Q&A (1:00:10)
“The BBS proposal has not been voted on by the BancorDAO yet. Are we expecting that to come soon?”
- Eyal: “Yes, we are getting ready for the issuance and getting familiar with exactly how it works and the contracts are moving forward and being audited, so I would expect that in the next two weeks.
“What are the synergies between DIGITALAX and Bancor?”
- Emma-Jayne: “the biggest part of Digitalax is that it’s the only project in crypto that serves an entirely new market of the fashion industry, which happens to be just about everyone. It was founded to use fashion as a tool of desire to onboard people into DeFi because they interact with fashion on a daily basis. The biggest synergy is exposure for Bancor to a completely new retail market.”
“The DAPP people mentioned the long-term effect of locking up liquidity with Bancor. Is there any interest in having a longer-term reward structure to pay BNT LPs within Bancor?”
- Mark: It’s certainly something we’ve discussed within the community and between the developers. It’s never come to fruition because it wasn’t a priority, but a gamified setup could be incorporated. When V3 is launched, there’s going to be a slight change to the way LM incentives are handled in general on both sides of the pool, based on the profoundly different architecture of V3. Let’s discuss further when V3 is launched”.
“How does the external IL protection plan relate to the previous plan to create origin pools?
- Nate: “External IL protection helps protect specifically the non-BNT side of the protocol’s liquidity pools. I see them as complementary to Origin Pools, not mutually exclusive. They’re targeted at the same goal, which is to reduce the barrier to whitelisting and lower the cost of IL to Bancor. Origin pools are still very much on the radar.
- This new mechanism for third-party IL we see this as an incredibly important stepping stone to allow permissionless access to IL protection on Bancor with no decision-making required of the BancorDAO, and it is ultimately something we plan to build natively into the protocol, so a token project doesn’t need to perform manual work to set up IL protection on their pool funded with their tokens.
“How do we increase trading volume?”
- Nate: In addition to improving trader traffic to bancor.network and arbitrage on the contracts through improved UI, awareness and deep liquidity, we are working as a community to deepen our integrations with wallets and other sources of volume.
- Our pools are among the deepest in the crypto market for certain tokens and often offer the best pricing, making Bancor more attractive to integrate for wallets and other actors.
- It’s not just the protocols, but also the trading firms, funds, and banking providers bringing more of their activities on-chain. They are drawn to Bancor’s trading and yield because it is fully transparent and on-chain with 100% uptime, unlike a CEX where trading can be halted at times of volatility and yield strategies are not fully transparent to the user.
- So increasing trading volume is an effort not only on the consumer side via trader traffic to bancor.network, but also on the BD side across wallets, protocols, trading firms, banks and consumer finance apps.
- To the extent that we have people on the call who have connections to these types of integrators or ideas of places where they you think Bancor‘s automated trading / yields should be integrated, please contact @NateHindman or @FoxSteven on Telegram to let us know.
