Bancor Network, the first AMM-enabled DeFi protocol, announced its latest upgrade, Bancor 3 is going live with support from top crypto partners. The decentralized finance (DeFi) liquidity protocol aims to boost DeFi projects and the ecosystem, empowering token projects and their holders to drive healthy on-chain liquidity in their native tokens. Furthermore, the new updated Bancor 3 will introduce new features that will unleash a wave of innovation and developments in the DeFi space while maintaining its simple user interface.
Announced Today, the project launch has already attracted over 30 token projects including Polygon (MATIC), Yearn (YFI), Flexa (AMP), Enjin (ENJ), Nexus Mutual (wNXM), and WOO Network (WOO). These projects will provide seed liquidity on the network and offer incentives on Bancor via the protocol’s new customizable Auto-Compounding Rewards system.
“Polygon is excited to utilize Bancor 3 to build decentralized liquidity for $MATIC token holders. Bancor’s Single-Sided, Protected liquidity solution makes it easier than ever for our DAO and token holders to safely stake and earn $MATIC while driving community-sourced liquidity that powers low-slippage MATIC trading,” a statement from the Polygon team reads.
Launched in 2017, Bancor has provided liquidity solutions in the DeFi ecosystem, enhancing decentralized trading and staking opportunities for its community. The platform offers users a DeFi trading and staking protocol with single-sided liquidity & 100% impermanent loss (IL) protection. Overseen by the Bancor DAO, the protocol's mission is to bring DeFi mainstream by providing the simplest and safest way to trade and earn passive income in DeFi.
Following a two-year growth period for liquidity staking and yield farming in DeFi, DAOs and token communities are still searching for a simple, safe, and sustainable way to drive on-chain decentralized liquidity. Looking at most of the projects, the strategies employed by token projects to create long-term liquidity have proven ineffective. Most liquidity mining programs aimed at incentivizing liquidity attract “mercenary” yield farmers who farm and dump token rewards, while the risk of IL causes even loyal token holders to withdraw liquidity when rewards expire.
With the launch of the Bancor 3 live network, projects will create more sustainable liquidity pools by protecting participants against the risk of Impermanent Loss. Token holders are less likely to withdraw liquidity when rewards expire since they’re protected from value loss and can continue earning with less risk and zero maintenance.
“Bancor has become one of the largest sources of on-chain AMP liquidity for good reason: It is a safer and simpler way to stake,” Flexa said. “With Bancor 3, we’re doubling down on our belief in Bancor by seeding our pool with AMP liquidity and providing auto-compounding rewards to our token holders who stake their AMP on Bancor.”
The new updated Bancor 3 features
In its quest to provide the ultimate DeFi liquidity provision solution, Bancor 3 live version introduces a number of novel features that simplify liquidity provision and encourage broad and sustainable involvement in on-chain liquidity markets.
First, the upgraded version introduces the ‘Omnipool’, a new protocol architecture that consolidates token liquidity in a single, virtual pool, minimizing gas costs and increasing efficiency and usability at every touchpoint. Bancor 3 also introduces an unlimited single-sided staking protocol that allows users to provide liquidity and earn yield in a single token pool, reducing the chances of IL.
Additionally, the new upgrade introduces an auto-compounding rewards feature, whereby trading fees and rewards auto-compound inside the pool, while simultaneously serving as liquidity from day one. Third-party token projects can also incentivize liquidity providers with auto-compounding rewards free from Impermanent Loss giving them an opportunity to earn dual rewards.
Bancor 3 will also feature a smart portfolio tracker, a new front-end interface that makes the process of providing liquidity, managing positions and tracking profits refreshingly easy. Finally, the upgraded version also ensures all deposited tokens receive 100% impermanent loss protection instantly, compared to the 100 day-limit on previous Bancor versions.
Mark Richardson, the Product Architect at Bancor, said:
“Bancor has spent the past several years creating the equivalent of high-yield savings account for DeFi: Deposit your assets, sit back and earn. By helping token projects and their users safely and simply tap into DeFi yields, Bancor 3 enables robust and resilient on-chain liquidity markets that drive healthy token economies.”