The first decentralized finance protocol to introduce liquidity pools, Bancor has released a new liquidity solution with the drop of its v3, named Bancor 3.
Bancor 3 went live with a pledge to provide security against impermanent loss to liquidity providers. The new architectural changes promise to put forward sustainable on-chain liquidity and make decentralized finance (DeFi) staking manageable for decentralized autonomous organizations (DAOs).
Bancor Protocol first unveiled Features Of Version 3 in November. The v3 of Bancor has drawn attention of more than 30 projects and tokens including Synthetix Network Token (SNX), Polygon’s MATIC, Brave’s Basic Attention Token (BAT), Yearn.finance’s YFI, Enjin Coin (ENJ) and Flexa’s AMP along with a few DAOs for its latest protocol launch.
The single-sided staking was first established with Bancor v2 to protect traders from impermanent losses. Anyhow, the last version faced issues from a high barrier of entry and expensive gas fees. Bancor 3 has promised full impermanent loss protection with minimal gas fees.
The most crucial part of the DeFi ecosystem is liquidity, but a lot of major protocols have suffered crises in keeping up a long-term liquidity mining strategy.
“In Bancor 3, the protocol utilizes an improved set of operations that allows the network to better manage its liabilities, resulting in a more cost-efficient method of providing impermanent loss compensation,” said Mark Richardson, product architect at Bancor, while explaining the chief architecture changes and the new liquidity solution.
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Bancor 3 has rolled out various new architectural changes and features, which include Omnipool, auto-compounding rewards, instant impermanent loss protection, dual rewards and superfluid liquidity. The Omnipool is a single virtual vault for token liquidity.
Furthermore, Richardson went on to explain that Omnipool can utilize protocol-earned fees from one pool to compensate a user’s impermanent loss in another pool. This might cut down the transaction fee slippage and ensure efficiency.
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