Written by: Karen
Written by: Karen
Last week, a report on the impermanent losses of Uniswap V3 showed that 80% of the fund pools in Uniswap V3 had impermanent losses more than transaction fee income, and as many as half of LP users net income was not as good as HODLer. Obviously, effectively alleviating impermanence loss in AMM has become a major problem to be solved urgently.
As the earliest proposer of AMM, Bancor is also constantly optimizing the model design. The V1 version launched in 2017 requires all capital pools to use BNT as the transaction asset. After considering factors such as impermanent loss (IL), in the second half of last year The launched V2.1 version allows users to mortgage unilateral assets and obtain 100% impermanent loss protection under certain conditions.
Specifically, Bancor will launch the V3 version in three stages: Dawn (dawn), Sunrise (sunrise) and Daylight (daylight). It is expected that the first stage will be launched in January 2022, and the second and third stages will be launched next year. Started in February and March.
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Impermanence loss protection: protocol instant IL protection + third-party support
Instant 100% protection against impermanent loss is the most critical feature introduced by Bancor V3. In Bancor V2.1, users can enjoy impermanent loss protection in the fund pool related to whitelisted tokens. However, the protection ratio within 30 days of pledge is 0%, and 30% on the 30th day. The staking time increases by 1% per day, and you can enjoy 100% impermanent loss protection after 100 days of staking.
In addition, Bancors current impermanence loss protection will first use the fee obtained by the protocols liquidity as the first line of defense. If the impermanence loss exceeds the fee, it will be covered with newly minted BNT. Therefore, the impermanence loss protection is set Whitelist fund pool. In the V3 class, third-party projects can also provide impermanence loss protection for their token liquidity providers, so that the project party and Bancor can share the impermanence loss burden, which can support more impermanence loss protection fund pools.
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Independent BNT summary pool: transactions skip BNT
On the other hand, in the current version, although users can provide unilateral liquidity, when the BNT provided by the agreement on the other side reaches a set upper limit, the user must provide BNT to expand the fund pool, while in the V3 version , there is no deposit limit. Specifically, the concepts of trading liquidity and superfluid liquidity will be introduced. Trading liquidity is used for market making. Superfluidity can be used for such as native and other charging strategies. The scale of trading liquidity It is still the DAOs decision that tokens that exceed transaction liquidity can be used in hyper-liquidity strategies, accumulating additional value for stakers.
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Reward upgrade: automatic compound interest + double reward
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other
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summary
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