/biz/ - Business & Finance

Bancor v2, which is due out this month, solves both of these problems. This has a number of effects. The first is that you can now stake a single asset. If you are 100% in LINK you can stake 100% LINK on their protocol and take fees, you don't have to sell half your stack for ETH (or whatever the other side of the pair is, BTC, USDT etc). That's really cool for me and you, but it's even cooler for, say, the dev team for a project who hold 10% of the total token allocation for "development". They can now stake that entire development budget and get fees.
And this deal is even sweeter when you consider that Bancor has solved impermanent loss. Now, if you stake 100 LINK, you will ALWAYS have 100 LINK + fees available to withdraw. Again, that's really good for me and you, but it's even better for the big boys who would be interested in staking very large quantities for the fees that could generate. Chainlink themselves, in the blog post above, say that this could lay the groundwork for "traditional markets" (ie institutions) to start providing liquidity to DeFi. This wouldn't just mean a huge influx of capital and credibility into DeFi, we as end users would benefit hugely from DEXes that could compete in terms of liquidity with the biggest centralised exchanges, in some cases actually performing better.

DYOR, of course, and as with anything in this space unforeseen smart contract vulnerabilities could bring it all undone, but Bancor v2 is currently undergoing two separate code audits. If it works as intended, we will see a fundamental shift in the user experience of dexes, the legitimacy of DeFi, and the value of the Bancor protocol as a fundamental lynchpin of the entire space.

So if there is 100 link pooled and I buy 100 link and the liq. provider still has 100 link. Where did my 100 link come from?

>>20263319
>>20263320
Nice writeup. What are the BNT tokenomics?

I'm holding a small bag of BNT. I think there's potential for a good profit but even more, it's one of those projects that I hope succeeds. Would push the DeFi space forward a lot.

>>20263416
The system is quite complicated, but basically works around the idea that when you buy LINK out of the pool of tokens that the exchange is holding, the price of LINK changes slightly and it's in the interest of people to "balance" the price by performing what's called arbitrage. Which is buying slightly cheaper LINK from somewhere else, and selling it for a small margin.
A lot of arbitrage is done by bots these days that automatically detect these small discrepancies in price and keep the whole system level while taking a share of the profits.
There are systems in place to prevent you from "draining" a liquidity pool (say if the pool is holding 1 million LINK you can't just market buy 1 million LINK because the price would go up exponentially and you would end up overpaying massively.

>>20263319
Anon, I’m intrigued, but haven’t they been hacked two times?

>>20263450
Three sources of profit, which I'll list from least to most interesting.
Firstly is that the Bancor DAO votes for a small rate of inflation that is paid out to people staking BNT. Essentially a faucet of staking fees to people staking their BNT tokens on the platform.
The second is that BNT holders receive 50% of the trading fees on the platform, regardless of how much liquidity is on the other side.
So if Chainlink are right about this bringing in institutional money, even if that big money is staking thousands of BTC and tens of thousands of ETH on the platform and generating tons of fees, 50% of those fees will be going to BNT holders.

But the third one, the huge one, is that BNT is the counter pair for everything on their exchange. So instead of a trading pair being, say, LINK/ETH or LINK/BTC, it's LINK/BNT. Or ETH/BNT. Or whatever.
But to balance the trading pair so that there is equal liquidity on both sides, that means that BNT must be equal to the amount of, not just all the LINK that's staked on Bancor, not just all the BTC, not just the ETH, but ALL trading pairs COMBINED.
The total value of BNT has to be able to act as a liquidity counterweight to every single token that is staked on their exchange, put together.
When you consider that this might be the platform that brings in institutional liquidity, when you consider that literally billions could be brought into this platform as major projects make use of single asset exposure and no impermanent loss, then a Bancor market cap in the billions or tens of billions is actually entirely possible, and within a year or two at that.

>>20263319
>>20263320
I'm bullish af for this whole thing. I remember they announced a while ago they were being audited by two companies, are the results out yet?

>>20263550
Yeah there was a hack in 2018 which drained a significant amount of money. I don't know the details as I wasn't following the project at that time.
The more recent vulnerability was found by the team themselves who front-ran it, so it wasn't so much a hack as a potential vulnerability that the team themselves saw and took care of.
The code is currently undergoing audits from Consensys Diligence and 1inch, but there is never zero risk, especially when it comes to complex and novel smart contract applications. The thing is that IF this works and is watertight then it will be massive, and it will be massive within a year. That's a lot more than can be said for 99% of shitcoins out there.

>>20263512
I need to read more about this. Same question can be asked for small ratio orders. 3000 link and I buy 200 link, etc. etc. where do the tokens come from or the 3000 link is balanced back. Is it a function of time or what? Liq. provider just waits until his liquidity is balanced back and can’t get out the pool anytime he wants?

Holding onto 1k BNT seems like a smart play, I really hope BNT succeeds not just for my personal gain, but for the defi space in general. If what they say they will do ends up happening then this can reach a 1b Marketcap easily. Thats a 10x from here.

>>20263628
There's a lot to get your head around here anon, but a good place to start would be reading about Automated Market Makers, or AMMS.
After that the Bancor blog:
>blog.bancor.network
Or this section of their recent community call:
>https://youtu.be/HeIsh8AVXhM?t=320
Is where they lay out how they have solved the major problems facing AMMs, that set the stage for liquidity provision to actually be an attractive and safe option for large scale providers.

>>20263628
Also the Chainlink post I posted in the OP is excellent, Chainlink are very good at explaining complex subjects.

>>20263659
>>20263665
will read them thanks

>>20263319
>>20263320
>>20263512
Ok fuck it real talk, fuck this shills and retards who fud without understanding of paltform
Look Im in every defi project since early 2020, acually did traditional market making back in the day, and bnt v2 looks cool AND there is huge hypetrain on defi twetter but take care

>"impermanent loss" was never "problem" its state of market making dunno why they hype it as problem to solve, marketmakers do 50%x/50%y knowing they "might miss gains" aka suffer impermanent loss if x or y go up, but do it anyway to reduce price exposure to x or y (usually one of them is stable asset like stablecoin) and earn fees in process
>if you understood what i typed above please understand that if price of x or y goes up amm eats "impermanent loss" but it works vice versa if it goes down alot amm just saved himself from 50% of loss and just did "impermanent win?" and you suffer 2x loss if you are in only 1 asset and ti goes down, so its not black and white problem to "SOLVE"
also
>arbitrage systems to keep price of x anchored to price of y historically allways failed
>bancor team have really poor security track record, yes i know about auditis but thats just for smartcontracts, thing is there is so much of actively managed parts to this and attack surface huge anyway

Stay safe out there

>>20263590
Nice, thanks anon. I'm on board. I like SNX too but the BNT market cap is pretty tasty.

>>20263844
Why should be there one business model in the entire ecosystem? If you are not worried of the impermanent loss “problem”, then you use uniswap or similar.

>>20264046
Single token staking is the real killer feature.
I don't have to split my Link long term holding in 50% Link and 50% ETH to provide liquidity .
I hodl 100% of my Linkies and put it in the pool and enjoy nice fees rewards.

>>20264046
Agreed
>>20264180
Just various opportunities with various levels of risk. More risk, more reward typically. The best opportunities are 0 downside, only possible upside, only risk 0 ROI.

>>20264217
Can you imagine how many ERC20 normies who are not arbitragers will start staking in Bancor pools?
It will be massiv, because it's simple.

>>20263590
What I understood after reading these is that you are right that the staked bnt needs to be at least equal to the total liquidity of the bancor network. Eth or link goes up bnt goes up. In case the value of the total assets goes down, more liquidity may come keeping the price of bnt floating or going up, but no additional liquidity may result in decrease in value of bnt. Ample/bnt pair may play a stupid role here if the liquidity of ample moves to bancor.

ok so i have some benties and i want more as soon as the audits results are out and are positive, where will the info be first released, Twitter?

>>20264407
>Ample/bnt pair may play a stupid role here if the liquidity of ample moves to bancor.
This really activates my neurons, hoping ampl gets a bancor v2 pool.

>>20264468
Imagine that:
Ampl rebalance earning + trading fees on top.
Money making machine!

Lads, will the liquidity providers be rewarded with BNT, or some other token?

>>20264597
BNT

>>20264046
Abilities of reading comprehension?
Its not fucking "busness model" on tn its solution and market product fit
And its not killer feature its just amm on levrage 0% losses if price goes up 2x loss if price goes down compared to amm +riskis of big attac vectors

>>20263844
Your main point seems to be:
>Traditional market makers don't mind impermanent loss because it works both ways.
OK, but mitigating it coupled with single asset exposure creates a new market for people or dev teams that only want to be long in one project, right? Like a developer stash of tokens for example. It creates a product that so far has not existed.
And I wouldn't have even gone so hard on shilling it if it weren't for the Chainlink blog post. I trust their judgment more than my own.

I partly agree on the security stuff, that's really the big question mark about this whole project. I might be a shill, but I'm not deluded. But that hangs over any novel, complex smart contract application.

only faggots are not holding this gem

>>20264915
>>20264915
>Your main point seems to be:
>>Traditional market makers don't mind impermanent loss because it works both ways.
Yup, there is not impermanent loss or impermanent win its all about asset exposure
>OK, but mitigating it coupled with single asset exposure creates a new market for people or dev teams that only want to be long in one project, right?
Yes its more on less amm on long
Its acually really intresting idea im just saying its not black and white "perfect amm" solution everyone makes it to be on defi twetter

>>20264987
Fair enough, anon. I appreciate your input.

>>20265005
Np and gl

audit has failed and price will crash when it is announced

>>20265232
I'm financially ruined if this happens.

Sounds jewish

>>20265371
>I'm financially ruined if this happens.
it will just be delayed a few months

>>20265386
I'm financially stagnated if this happens.

>>20264682
Thanks

>>20263319
I bought a bag of 4k BNT because the name sounds similar to the PARKOUR!! meme.

Imagine providing liquidity and yelling BANCOR.

BANCOR LIQUIDITY VORTEX!!

I hold link and bancor

I bought 1k BNT last night then realized, i as an American can not stake or swap on bancor.network
Can burgers stake on V2?

So should I be investing in LINK or BNT?

>>20266657
>I bought 1k BNT last night then realized, i as an American can not stake or swap on bancor.network
>Can burgers stake on V2?
thats why it will never be listed on coinbase. also the audit failed but team havent announced it yet.

>>20267097
Fake ass FUD

brainlet here holding a small bag purely off intuition

any price predictions?

>>20267193
$10 within 3 months. No reasoning but prediction nonetheless

>>20267212
if I sell at $10 will I need to look for ropes in the immediate future?

>>20267097
High quality fud here. Almost made me second guess for a moment.