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As work on Bancor V3 progresses, here’s a recap of what we’ve shared so far about V3:
The reintroduction of pool (LP) tokens to the network. Pool (LP) tokens existed up until V2.1 and they are currently obscure from LPs as they are automatically staked into the protection contract. With the reintroduction of pool (LP) tokens:
We are opening the possibilities of greater composability with other DeFi protocols which will allow for greater yield opportunities.
Dramatically simplify the new contracts to usher significant savings in gas fees for staking and trading, in addition to easier integration by third-party protocols.
Restaking of $BNT rewards will be way easier and cheaper
Capacity issues on the TKN side of pools will be addressed
Gas costs on the platform will be coming down dramatically
Onboarding of new assets will become easier and allow us to whitelist assets with less risk to the protocol
Dual-sided liquidity mining rewards with single-token re-staking will be introduced and is the first of its kind (other AMMs require pairing rewards with another asset in order to re-stake them)
We think that DeFi has been stagnant lately with new innovation and we think that’s exactly what we are bringing with V3. It does take time to make sure that the contracts are as advanced and as secure as possible. We do not take the communities patience for granted and we appreciate the continuing support as we are working around the clock to deliver what we believe is a highly differentiated DeFi product.
There are new UI screens that have been pushed to the beta interface that we are looking to get feedback on. This includes:
A new pools page 🤿
A new voting interface ☑️
A new tokens page 💰
These new interfaces are being added to beta.bancor.network which is powered by our new APIs and performance will be faster. We will eventually shift the entire web app over to the new, faster interface.
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.
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
Left: Protocol Revenue (30 Days) Right: Price to Sales ratio (P/S)
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.
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 @odtorson.
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.
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:
Proposal: Whitelist ShapeShift FOX Token (FOX) with 100k Co-investment
Temp Check: Which Blockchain should Bancor prioritize after V3 is release?
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.❗️
In this week’s Community Call recording, Bancor shared the development updates above and featured three teams to discuss collaborations with the Bancor ecosystem: Velas, ShapeShift, and Layer3.
“Founded in 2014 by Bitcoin veteran Erik Voorhees, ShapeShift is the only cryptocurrency trading platform offering zero-commission crypto trading and self-custody. ShapeShift.com allows users to buy crypto with fiat, trade, track, and secure their crypto through a simple and beautiful web interface. Users always stay in control of their keys”.
Shapeshift’s FOX token currently has its largest AMM pool on Uniswap V2 ($16.5m) with an LM program which may be extended imminently. Community members have been pushing for a whitelisted pool on Bancor to make use of single-sided staking and full impermanent loss protection. This would give users greater flexibility and provide arbitrage opportunities between two large pools.
“Velas are building an open-sourced blockchain ecosystem of services and products, aiming to combine best qualities of both centralized and decentralized solutions. It Involves researching state-of-the-art cryptography,developing consensus protocols and designing intuitive user interfaces providing developers, enterprise and people worldwide to create and join easily accessible, transparent and community-governed ecosystem for web 3.0.”
Velas are looking to get VLX whitelisted on Bancor as part of their drive for integrations. If the whitelist gets approved, Velas would be open to integrating the VLX pool into their own wallet as its source of liquidity for VLX.
“Layer3 is building a marketplace for DAOs to connect with community members to procure an array of microservices. With Layer3, community members can get paid for supporting DAOs, and DAOs can more transparently and efficiently leverage the efforts of their community.”
Layer3 are launching Bancor’s new bounty program on Wednesday 6 October to reward the Bancor community for the execution of specific tasks, including:
ELI5s about Bancor’s unique features;
Meme competitions;
Achievement of engagement with key influencers to discuss Bancor;
Impression mining on any Bancor-related content shared on social media.
You will begin a task on Layer3, and be rewarded by its DAO in BNT.
Layer3 is chain-agnostic, and can support similar initiatives when we are on a sidechain or different L1 in the future.
Sign up to be updated and check out the bounties at https://alpha.layer3.xyz/daos/bancor.
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.
As work on Bancor V3 progresses, here’s a recap of what we’ve shared so far about V3:
The reintroduction of pool (LP) tokens to the network. Pool (LP) tokens existed up until V2.1 and they are currently obscure from LPs as they are automatically staked into the protection contract. With the reintroduction of pool (LP) tokens:
We are opening the possibilities of greater composability with other DeFi protocols which will allow for greater yield opportunities.
Dramatically simplify the new contracts to usher significant savings in gas fees for staking and trading, in addition to easier integration by third-party protocols.
Restaking of $BNT rewards will be way easier and cheaper
Capacity issues on the TKN side of pools will be addressed
Gas costs on the platform will be coming down dramatically
Onboarding of new assets will become easier and allow us to whitelist assets with less risk to the protocol
Dual-sided liquidity mining rewards with single-token re-staking will be introduced and is the first of its kind (other AMMs require pairing rewards with another asset in order to re-stake them)
We think that DeFi has been stagnant lately with new innovation and we think that’s exactly what we are bringing with V3. It does take time to make sure that the contracts are as advanced and as secure as possible. We do not take the communities patience for granted and we appreciate the continuing support as we are working around the clock to deliver what we believe is a highly differentiated DeFi product.
There are new UI screens that have been pushed to the beta interface that we are looking to get feedback on. This includes:
A new pools page 🤿
A new voting interface ☑️
A new tokens page 💰
These new interfaces are being added to beta.bancor.network which is powered by our new APIs and performance will be faster. We will eventually shift the entire web app over to the new, faster interface.
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.
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
Left: Protocol Revenue (30 Days) Right: Price to Sales ratio (P/S)
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.
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 @odtorson.
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.
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:
Proposal: Whitelist ShapeShift FOX Token (FOX) with 100k Co-investment
Temp Check: Which Blockchain should Bancor prioritize after V3 is release?
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.❗️
In this week’s Community Call recording, Bancor shared the development updates above and featured three teams to discuss collaborations with the Bancor ecosystem: Velas, ShapeShift, and Layer3.
“Founded in 2014 by Bitcoin veteran Erik Voorhees, ShapeShift is the only cryptocurrency trading platform offering zero-commission crypto trading and self-custody. ShapeShift.com allows users to buy crypto with fiat, trade, track, and secure their crypto through a simple and beautiful web interface. Users always stay in control of their keys”.
Shapeshift’s FOX token currently has its largest AMM pool on Uniswap V2 ($16.5m) with an LM program which may be extended imminently. Community members have been pushing for a whitelisted pool on Bancor to make use of single-sided staking and full impermanent loss protection. This would give users greater flexibility and provide arbitrage opportunities between two large pools.
“Velas are building an open-sourced blockchain ecosystem of services and products, aiming to combine best qualities of both centralized and decentralized solutions. It Involves researching state-of-the-art cryptography,developing consensus protocols and designing intuitive user interfaces providing developers, enterprise and people worldwide to create and join easily accessible, transparent and community-governed ecosystem for web 3.0.”
Velas are looking to get VLX whitelisted on Bancor as part of their drive for integrations. If the whitelist gets approved, Velas would be open to integrating the VLX pool into their own wallet as its source of liquidity for VLX.
“Layer3 is building a marketplace for DAOs to connect with community members to procure an array of microservices. With Layer3, community members can get paid for supporting DAOs, and DAOs can more transparently and efficiently leverage the efforts of their community.”
Layer3 are launching Bancor’s new bounty program on Wednesday 6 October to reward the Bancor community for the execution of specific tasks, including:
ELI5s about Bancor’s unique features;
Meme competitions;
Achievement of engagement with key influencers to discuss Bancor;
Impression mining on any Bancor-related content shared on social media.
You will begin a task on Layer3, and be rewarded by its DAO in BNT.
Layer3 is chain-agnostic, and can support similar initiatives when we are on a sidechain or different L1 in the future.
Sign up to be updated and check out the bounties at https://alpha.layer3.xyz/daos/bancor.
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.
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