At what overall crypto market cap will Bancor reactivate Impermanent

Question

Bancor Protocol

👋

At what overall crypto market cap will Bancor reactivate Impermanent

loss protection ??

#bancor #blockchain #cryptocurrency #english

0

18.07.2022

9 ответов

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0xbart

If so @bjp333 you should probably disclose that. Since your project is dependent on Uniswap active management and it is your interest for Bancor to no longer exist..

0

18.07.2022

BJP | Gamma

0xbart
If so @bjp333 you should probably disclose that. S...

I do, so take my opinions with a grain of salt. I have a deeper understanding of liquidity and IL than most as a result and I am really just honestly expressing my opinion with regards to the execution risk involved and potential for IL/deficit to get worse in the absence of fee generation. But you should be discerning of my background.

0

18.07.2022

John

BJP | Gamma

Not any time soon while the deficit keeps increasi...

I guess the issue with this here is that you can have everyone share in the 14M deficit or have just the TKN LPs bear the brunt of the 35M deficit. But sharing in the 14M deficit means that the 20M surplus of BNT would have to be sold. The price impact on that would likely tank the price of BNT. And also if you were to do this at the protocol-level, you'd have to go thru governance. And by the time it passes, people would front run the selling leading to an even lower recovery. There's really no easy way out of this. Well, there is if the Foundation would buy the surplus BNT in an OTC deal, so as to not crater the price of BNT. At least this wouldn't be a bailout because technically the Foundation is merely buying BNT. And if the theory is that BNT is undervalued, then even at the current price, the Foundation is getting a good deal. So #notabailout

0

18.07.2022

BJP | Gamma

I have never hidden that as it is in my actual name and I divulged it a few times. Having said that, my issues with Bancor go quite a bit back when they released their paper on Uniswap. Been on twitter spaces with both Mark and Nate debating the merits of their paper numerous times. I always felt like IL is something that you can’t insure because the fees often don’t make up for it. You need a sufficient fees/TVL ratio. So perhaps whitelisting certain pairs for that based on that ratio would help. However just looking at Bancors situation objectively, I dont see how you can generate the fees needed here. Constant product AMMs need way more liquidity to compete. Offering 100% IL protection was a way to get that additional liquidity to compete on aggregators but now that that’s gone, fee generation seems really bleak. High slippage and price impact from the lack of liquidity would also affect the effectiveness of potential arbitrage opportunities. Happy to debate on this!

0

23.07.2022

alphavalion

BJP | Gamma
I have never hidden that as it is in my actual nam...

Sure, but the fee generation mechanism aren't all base on the existing Bancor AMM. Atleast one or two of them aren't even in the DEX category (lending and borrowing for example). While the situation looks bleak right now, there is nothing that states that Bancor can't turn the ship around and become profitable in the future. Uniswap branched out into the NFT space via an acquisition, Curve is launching a stable coin and AAVE as well. Why do you think that Bancor won't be able to innovate and generate yields via other venues?

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23.07.2022

veNBAtroll

BJP | Gamma
I have never hidden that as it is in my actual nam...

You’re right, ILP only works if you can predictably predict IL, which is impossible.

0

23.07.2022

BJP | Gamma

alphavalion
Sure, but the fee generation mechanism aren't all ...

Im just looking at their current model for the past three years and the liquidity situation. IL protection allowed Bancor to get well over a billion in TVL at one point but that was when IL protection was marketed and you also had LM rewards. Borrowing and lending can, but what would be the economics there? Allow LPs to borrow against their positions and make money on the liquidations? New Bancor stablecoin similar to what Curve is doing? Maybe. Its worth trying for sure. But time doesnt seem very friendly right now

0

23.07.2022

BJP | Gamma

veNBAtroll
You’re right, ILP only works if you can predictabl...

Yeah its on a go forward basis. You need an R&D team solely focused on adjusting the params on various pairs on which pairs are eligible and which are not.

0

23.07.2022

BJP | Gamma · Accepted Answer

BJP | Gamma

Not any time soon while the deficit keeps increasing. It is hitting a new ath https://dune.com/ferdinand_hodl/bancor-liquidity-crisis

0

18.07.2022

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At what overall crypto market cap will Bancor reactivate Impermanent

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