Earn Up to 51% APR on Bancor v3 as an ETH LP with IL-Protection

bancor

Introduction to Bancore?

Bancor is credited as one of the earliest automated market makers (AMMs) and it’s been a hot topic over the years whether they also are due credit for originating the idea of an AMM in the first place. Anyways, in fall 2020, Bancor introduced an innovative new concept called single-sided liquidity provisions. At the time, Bancor had under $100M of liquidity coming off DeFi Summer, and had fallen far behind the DeFi darling Uniswap and other new AMMs like SushiSwap. 

Single-sided LPs were a radical new DeFi offering where you can deposit a single token and Bancor would pair BNT with the token to create the LP, while also providing protection against impermanent loss, as long as LPs remained for 100 days. Impermanent loss is a temporary loss of funds when providing liquidity. It’s simply the difference between holding an asset versus providing liquidity in that asset.

The launch of single-sided LPs by Bancor was an immediate success and drove Bancor to reestablish itself as a top AMM in terms of both trading volume and liquidity. The drawbacks at the time were that these single-sided LPs were limited to certain tokens and had deposit limits.

Often, these limits would be maxed out as LPs raced to earn comparatively higher yields for providing liquidity on tokens like ETH, WBTC, and LINK without risk of impermanent loss, which has often been a complaint among early DeFi LPs. Worst of all, the gas fees to deposit and withdraw from Bancor v2 were comparatively higher than competing AMMs.

Fast forward to today, Bancor v3 has launched with significant improvements to their signature IL-protected single-sided LPs

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