Established in 2017, Bancor launched DeFi protocol and AMMs in the blockchain sector. This lending and exchange platform based on Ethereum lets users receive staking rewards through liquidity pools. It announced the launching of Bancor 3 with new upgrades. The new features include Infinity pools, Omnipool, and immediate impermanent loss (IL) protection.
Solving Liquidity Pool Problems
An impermanent loss can occur on an AMM like Uniswap or Bancor when two assets have different prices in the liquidity pool. One asset value goes high or low strongly. Bancor had launched a mechanism in October 2020 to fix the issue with rolling out insurance. It guaranteed liquidity providers full amount of their invested capital, plus the amount earned after waiting the 100-day period. Now with this new loss protection feature in place, users do not have to wait 100 days. Total protection will be available from the starting day itself.
New Omnipool Feature
This feature will be used to create a pool that stakes BNT which has yield from all over the network. The current option is to offer yield from different pair pools like ETH/BNT. Omnipool lets all network trades happen in one transaction. Previously in Bancor, trading required transferring via BNT, leading to an additional transaction and gas costs when compared to other DEXs.
Bancor 3 will allow unlimited deposits through Infinity Pools. Users do not have to wait for the pool to open before they can deposit the tokens. Other major updates include automatic compounding of liquidity mining incentives. Dual side rewards will allow token projects of third-party to provide IL-free rewards in their pools. Bancor is controlled with DAO and has cross-chain help for EOSIO blockchain. BNT, the native token of Bancor has been up 2.3% in the last 24 hours. Its current value is $4.06 and market cap is $949 million.