Bancor launched the highly anticipated second version of it’s Automated Market Maker (AMM) on Jul 31. Since, it was the first company to pioneer the orderbook-less automated decentralized exchange back in 2017, all eyes were on Bancor v2 to revolutionize the decentralized exchanges and liquidity provision industry again.
The Bancor v2 promised single token liquidity provision, support for lending pools, removal of impermanent loss, liquidity amplification (for both stable and non-stable coins), reduced slippage design and integration of Chainlink oracles for effective security / improvements in overall operation.
After the launch, only two liquidity pools were introduced by the team. BNT/REN and BNT/LINK. They seemed to work and test liquidity provisions done by several crypt-enthusiasts confirmed the same – the AMM’s biggest problem “impermanent loss” was nearly taken care of. However, that’s where it ended. Since August, no further new pools have been introduced. So was the launch unsuccessful? Was the reason for non-introduction of new pools, an undisclosed problem in the design?
Bancor Security Focused Approach
Contrary to the DeFi norm, the Bancor team is a security-conscious group. For that reason, Bancor v2 was only launched in beta after various audits. It was reviewed initially by ConsenSys and 1inch teams. Afterwards, a lucrative bug bounty was launched to figure out bugs and issues, that might have been missed by the audit groups.
Even after all that, the beta launch was reinforced with “caps” or “limits” upto which a pool could be filled. This was done to reduce fund loss, in case of any security breach. It worked, Bancor v2 has been in operation for more than 2 months and hasn’t had any hacking incident or exploits. As it turned out, Bancor v2 was the “test in production” to gather real time data and run analysis to complete the upgrade, via the next v2.1 upgrade.
Enter Bancor v2.1
According to reports, Bancor v2.1 is all set to launch by the end of Oct 2020. It will bring the full set of features for the v2 and introduce a few other significant ones. For instance, the liquidity pools of LEND, renBTC, ENJ, KNC, SNX and others will be introduced. The team is also rumored to be redesigning various components of the system.
Bancor v2.1 will also bring the new norm of liquidity mining and Decentralized Autonomous Organization (DAO) based governance. The users taking tokens for enhancing liquidity on the platform will receive BNT tokens, in lieu of their services. Plus, the token holders will have the right to vote for important decisions through DAO. It is also believed that inflation will be introduced to the platform, to incentivize participation.
Bancor is a DeFi focused Automated Market Maker (AMM), which allows exchange or trading of tokens without the need of a counter-party or order book based trading mechanism, through liquidity pools for which stakers earn fees from processing token conversions.
The native token is BNT with a total supply of 69.1M. It supports token conversion on both Ethereum and EOS blockchain platforms. The service features easy sign up facility using mobile number, Messenger and Telegram.