1/.@Bancor V3 launched 6 days ago and TVL mooned to $260M USD 👀
⁉Why did it grow so fast?
V3 solves a few problems that #defi farmers hate👇
1. Staking two tokens in LP pools, therefore...
2. Incurring Impermanent loss
2. Compounding rewards yourself.
$BNT solutions are🧵
2/On Uniswap you need to provide liquidity with 2 tokens, so if you farm stables you will need to provide liquidity in DAI/USDC etc.
Yet, Bancor V2 allows single asset deposits and claimed to give 100% impermanent loss protection.
@Gemini wrote a good explanation how it works.
3/V3 changed the mechanics slightly by creating an Omnipool of $BNT.
With the Omnipool, no need to choose in which pool to stake your BNT.
It also reduces transaction and gas fees.
4/ V2 also had IL protection, but you had to stake tokens for at least 100 days.
V3 boasts with Instant IL protection.
The protocol uses fees earned from its co-investments of BNT in Omnipool to compensate for the network-wide cost of IL.
5/ It seems like there is still a possibility that part of the IL protection could come from minting NEW $BNT tokens that are distributed instead of the originally staked token.
Keep in mind that there is a 0.25% withdrawal fee and 7 day cool down.
Yet yield for $DAI is high.
6/ Yield aggregators prospered thanks to their autocompound feature.
Yet, yield aggregators take their own cut in deposit/withdrawal fees, 'harvesting' fees etc.
Bancor V3 addition of Compounding Rewards maximizes yield and reduces gas costs.
Good job @Bancor 💯
7/ There are more features, such as Dual-Sided Rewards, Multichain and L2 support etc, but those three changes are what every #DeFi yield farmer is looking for.
blog.bancor.network/introducing-ba…
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