- Bancor V1 Automated Market Making
- Bancor V2 LP Capital
- Bancor V3 Maximizing Passive Yield
- Productive Capital and Protocol Liquidity
Bancor V1 invented the AMM. Bancor V2 protected facilitated LP capital. Bancor V3 maximizes passive yield.
What is AMM? The Automated Market Maker is a method that automates digital asset trading without requiring authorization, and trades get executed automatically using liquidity pools to substitute buyers and sellers. Typically, it is a lot like an order book-less exchange. The exchange gets completed without the need to have the counterparty present online.
The first blockchain-based automated liquidity pool, also known as the computerized market maker (AMM), known as the smart token, is a digital currency with an embedded converter (smart contract) that permits it to be issued or exchanged automatically in any network.
All the different tokens in the Bancor Network connect through BNT, which is the hub token. Therefore, by using BNT, one token in the network can be converted to another.
What is LP Capital? Bancor v1 was designed to solve the liquidity problem where sparse order books struggled to guarantee liquidity to investors on both sides of the trade. Liquidity pools are an essential part of automated market makers (AMM). They provide liquidity through funds locked in a smart contract.
Liquidity pools are significant in the DeFi ecosystem. It is an integral part of automated market makers (AMM), borrow-lend protocols, yield farming, synthetic assets, on-chain insurance, blockchain gaming, and more.
What is Passive Yield? The simplest way to earn a passive income through DeFi is to deposit the cryptocurrency onto a platform or protocol that will pay an APY (annual percentage yield).
Exploring DeFi yield farming tutorials about using top DeFi products like Synthetix, Compound, Uniswap, Curve, Opyn, and Balancer for passive income is a way to start.
With Liquidity mining, users view, withdraw, and stake BNT rewards to compound yield. Staking rewards earn additional swap fees + BNT rewards, which can also be staked.
Bancor’s single-sided liquidity pools permit users to easily stake BNT rewards without having to stake tokens on the other side of a pool. This creates a positive feedback loop that incentivizes users to turn rewards into productive Capital while increasing protocol liquidity.
It is easy to buy Bancor. Once purchased, users can store them for as long as possible or send them to other addresses and exchange them for other cryptocurrencies or sell them.
Galia Benartzi is the co-founder of Bancor, the open-source protocol that ensures on-chain liquidity between any blockchain-based asset, inventor of the Automated Market Maker, and now a building block of Decentralized Finance.
Galia Benartzi, in the past, stated, “It’s an honor to build and break with the best in class.”