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Prominent decentralized finance protocol, Bancor has announced the launch of its v3, dubbed Bancor 3. The release on the mainnet comes six months after the project first shared the details of features.
Bancor 3 Goes Live
According to the official blog post, Bancor’s latest version is focused on encouraging broad and sustainable involvement in on-chain liquidity markets by simplifying passive liquidity provision in automated market-maker (AMM) liquidity pools.
Following the development, Mark Richardson, Product Architect at Bancor, said in a statement,
“Bancor has spent the past several years creating the equivalent of a high-yield savings account for DeFi: Deposit your assets, sit back, and earn. By helping token projects and their users safely and simply tap into DeFi yields, Bancor 3 creates robust and resilient on-chain liquidity markets that drive healthy token economies.”
Bancor first revealed details about version 3 in November last year. The three-tiered launch includes – Dawn – the beginning of Bancor 3. This phase aims to address friction points in the previous protocol version. It will also set the stage for the subsequent steps – Sunrise and Daylight.
Improvements and Features
Bancor highlighted that strategies employed by token projects to create long-term liquidity have so far been ineffective. As a result of risks associated with negative returns from Impermanent Loss, many token holders are unwilling to offer their assets to liquidity pools, the blog argued.
Subsequently, a major chunk of liquidity mining reward programs “end up in the hands of mercenary yield farmers who hop from pool to pool liquidating earned rewards into their preferred asset,” thereby leaving the token projects stranded.
Bancor said the main idea is to put DeFi liquidity back in the hands of DAOs and their token holders. As such, the improved version 3 introduces new protocol architecture with Omnipool, unlimited single-sided staking as a means to provide liquidity and earn yield in a single token, auto-compounding earnings via Chainlink Keepers integration, impermanent loss protection mechanisms, and revamped tokenomics, among other key features.
According to the team, the V3 release has already attracted over 30 token projects and DAOs such as Polygon (MATIC), Synthetix (SNX), Brave (BAT), Flexa (AMP), Yearn (YFI), Enjin (ENJ), WOO Network (WOO) and Nexus Mutual (wNXM). The protocols are offering seed liquidity on the network or providing liquidity incentives with the help of Bancor’s new customizable Auto-Compounding Rewards system.