Bancor announced the launch of the second version of the popular automated liquidity provider protocol on Apr 29. The Bancor v2 will be launched in the second quarter of this year. It will feature integration with Chainlink for price oracles to obtain reliable and tamper free data for stable automated market marker (AMM) operation, provision for a user to contribute to a liquidity pool with only one token, reduced slippage design (reducing volatility and providing smooth liquidity) and support for lending pools.
The technical details, documentation and source code will be released later by the team. Bancor v2 launch will highly benefit the rising field of Decentralized Finance (DeFi) by solving major problems associated with automated liquidity providers.
Liquidity Provision Impermanent Loss Problem: Why Stake When Buy And Hold Gives Better Returns?
There’s a reason why people don’t stake tokens readily, they cause a reduction in value compared to a simple token holding strategy. Its called impermanent loss and Bancor aims to solve this by pegging automated market makers with liquidity pools. The relative value of the automated market maker (AMM) reserves will be held constant using Chainlink oracles, which supply reliable price data to the smart contract from multiple sources. Bancor v2 will extend this protection to volatile assets, without requiring liquidity providers to hold additional assets.
Single Asset Liquidity Provision
Bancor v2 will allow liquidity providers to maintain exposure to a single ERC20 token asset, instead of having to maintain reserves of ever single asset (usually 2 or 3). This will grant greater flexibility to user, who want to minimize exposure to any other asset. Also, custom percentages (1-100) can also be set for assets.
Reduced Slippage Redesign
Bancor v2 will be redesigned from the get go to favor reduced slippage, which will allow it to compete better with order-book based exchanges. It will do so by offering customizable bonding curve logic and enhancing capital efficiency.
Support For Lending Pools
Bancor v2 will support lending pools, so liquidity providers can earn interest alongside the fees from trading. It will maximize the profitability for the users and motivate more people to stake assets.
It is super easy to buy Ripple. Just take a look at our exchange comparison!
Follow us on Social Media and subscribe to our free crypto newsletter!
@Telegram
@Instagram
@Twitter
@TikTok
@Facebook
Diskutiere mit uns!
This post may contain promotional links that help us fund the site. When you click on the links, we receive a commission - but the prices do not change for you! :)
Disclaimer: The authors of this website may have invested in crypto currencies themselves. They are not financial advisors and only express their opinions. Anyone considering investing in crypto currencies should be well informed about these high-risk assets.
Trading with financial products, especially with CFDs involves a high level of risk and is therefore not suitable for security-conscious investors. CFDs are complex instruments and carry a high risk of losing money quickly through leverage. Be aware that most private Investors lose money, if they decide to trade CFDs. Any type of trading and speculation in financial products that can produce an unusually high return is also associated with increased risk to lose money. Note that past gains are no guarantee of positive results in the future.
You might also like
More from Altcoin
Crypto Staking – The DEFINITE Guide on How to MAKE money staking
If you're looking to know how to earn money with cryptos, this is your complete guide to staking on Binance, …
NFT Enthusiast? You Might Have Been Airdropped $2200!
The cryptoverse just keeps on giving. Here's how to check eligibility for and claim PAINT tokens worth $2500!
EOS Conundrum: Mark Cuban Latest Statement About “Sharing Upside” Highlights Block.One’s Inaction
Billionaire entrepreneur, investor and crypto-enthusiast Mark Cuban said in a recent interview that token based projects should share profits upside …