Bancor, a decentralized automated market maker, has successfully installed new staking pools as well as an upgrade to its impermanent loss protection mechanism as part of the preparation of its highly anticipated Bancor 3 update.
In a November 30 announcement, the Ethereum-based crypto exchange and lending platform confirmed the installation of several new features and upgrades, including Omnipool, Infinity pools, and Instant Impermanent Loss Protection.
Launched in 2014, Bancor was the first decentralized finance (DeFi) protocol to establish the functionality of AMMs in the blockchain. The exchange platform also allows its users to earn staking rewards through various liquidity pools.
The newly installed impermanent loss protection mechanism operates on AMMs platforms such as Bancor or Uniswap. The functionality offers protection when prices of two assets in a liquidity pool diverge significantly, with one side going strongly up or down in value.
In October 2021, Bancor introduced a similar mechanism to combat the same issue by rolling out (IL) insurance. At the time, the IL guaranteed the liquidity provider up to 100% of their initial capital, plus fees accrued after 100 days waiting period.
But interestingly, with the newly installed Instant Impermanent Loss Protection, users will no longer need to wait for the initial 100 days to elapse since they will receive comprehensive protection from the first day.
The new Omnipool feature will allow for the creation of a single pool to stake BNT that offers yield from the entire network, unlike the current method of yield offering from separate pair pools such as ETH/BNT:
“The Omnipool allows for all trades on the network to occur in a single transaction. In Bancor’s previous versions, trades required transfers via BNT, creating an extra transaction and added gas costs compared with competing DEXs.”
On the other hand, Infinity Pools will offer unlimited deposits on Bancor, with users now no longer required to wait for “space to open up in a pool before being able to deposit tokens.”
Another notable future update in the highly anticipated Bancor 3 includes auto-compounding liquidity mining rewards, dual-sided rewards to “allow third-party token projects to offer IL-free incentives on their pools,” and further multi-chain and layer two support.
Bancor is administrated by a decentralized autonomous organization (DAO). This platform currently offers cross-chain support to the several EOSIO blockchain.
In the meantime, Bancor has revealed that it will roll out Bancor 3 update in three phases dubbed “Dawn, Sunrise, and Daylight”. Bancor has also hinted that it will make another release in Q1 2022 following a pending vote by the BancorDAO.
Based on data acquired from DeFi Llama, Bancor currently ranks as the thirty-second biggest DeFi platform, with a total value locked at $1.65 billion.
At the time of publishing, Bancor’s native token (BNT) has gained 2.3% over the past 24 hours, with a total market cap of $949.4 million. BNT is currently oscillating around $4.06, according to CoinGecko.