Community Call Summary — July 18, 2021

Bancor hosts weekly community calls with core contributors every week. This week, the call was held on Twitter Spaces.

Nate hosted the call with input from Mark and Yudi from the Bancor team. Here is a summary of the ecosystem and development updates from that call.

A recording of the call can be found here.

Quick Asks of the Community (1:06)

• We want to make some hires in Asia, specifically in China, South Korea, and Vietnam. We’re looking for full-time community managers, marketing, and business development.
• We’re also looking for animators and videographers, preferably with crypto or DeFi experience. We’re starting working on our V3 explainer videos!
• We have a new swap API which makes integrating with Bancor easier. If you know of any wallets that are on your radar which don’t integrate already with Bancor, let us know and tell the wallet teams that you want Bancor integrated!
• Steven and Nate are going to the Ethereum Community Conference in Paris. If you’ll be there, or you know someone we should meet there, let us know @NateHindman or @FoxSteven.

Development Updates (3:47)

• We’ve made hires for the core development team.
• One is a new full-time data analyst. This person can run our analytics more efficiently and share them with our community. They might, for example, develop analytics around our fee structure and help us develop dynamic fees.
• We’ve also hired a new front-end team leader with tons of experience. They come from a security background and will be helping our front-end team be more efficient.
• V3 development is going fast, even faster than we expected.
• We’ve started work on the public APIs for V3. This is crucial to get out once V3 is launched to get us into aggregators and other dApps. The APIs will also support deployment to other chains.
• We’ll also be working with Bancor’s the Graph subgraph.
• Recall that we’re rolling out V3 in three phases, each with about 1 month of announcement lead-time.
• V3 will address key issues, everything from space in the pools, reducing friction in staking rewards, supporting dual-sided liquidity mining, persisting our liquidity mining program, and some killer features we have not yet shared publicly for competitive reasons.

Ecosystem updates (6:45)

• [Shortly after the Bancor community call, it was announced that BNT will be included in Grayscale’s first DeFi Fund]
• We’re getting more and more inbound interest from banks and financial institutions. We are helping them navigate technical and legal challenges to let them integrate our services. It’s clear that their customers want what we offer. It’s an arduous process but we are optimistic about the future of institutional DeFi.
• SNX and AAVE pool had their liquidity mining rewards extended. There is space in those pools with healthy APRs.
• AMP has APRs over 30%.
• COMP has liquidity mining rewards enabled, with about 2M in depth and there is space for 5.5M depth. This is the best place in the market for COMP staking, so let people know!
• WOO continues to have strong APR and volume.
• AXS has around 15–30% APR and is around capacity on the AXS side. If you have BNT lying around, the AXS pool is a great place to stake and will open space for more AXS.
• The RUNE pool has around 1.3M in depth and a healthy APR of 18%. There is space for $800K worth of RUNE.
• Recent whitelists include FARM ($800k of space for FARM), NEXO is nearing 1M in liquidity ($300k of space for NEXO).

Governance (10:24)

• We have a ton of proposals going live tomorrow on vote.bancor.network, including a whitelist of ALCX with 200k coinvestment, whitelist DRC with 30k coinvestment, and a whitelist of xSUSHI with a 200k coinvestment.
• There are very few places to stake xSUSHI out there so our offering could be valuable.
• We also have a proposal for a targeted LM program for FARM from Harvest Finance.
• Mark: “We’ve done targeted LM campaigns in the past, such as with wrapped NXM in order to push down the costs of insuring Bancor on their platform. This meant that members of the NXM community were incentivized to underwrite our insurance and allowed them to earn on our platform with both BNT and NXM. Now Bancor is the deepest source of wNXM in DeFi.”
• Mark: “With FARM, we are being presented with a similar opportunity. The FARM system has a buyback system which buys from the deepest source of liquidity in DeFi. Currently it pulls from the Uniswap V2 pool but we don’t think those incentives will last forever.”
• Mark: “We’d like for the buybacks to go through Bancor. It makes sense for them because they can benefit from our features like IL protection. It makes sense for us because it guarantees that a very large trader (the FARM protocol) will trade on Bancor and drive fees.”
• Mark: “For these reasons, I’m in favor of this proposal.”
• Nate: “We have Josh, a key leader in the FARM community, to talk about FARM and discuss the proposal.”
• Josh: “Harvest Finance is a yield farm aggregator. We have farming available on ETH mainnet and BSC, and we will be on Polygon soon. We put all the yield platforms in the same place with our own native token. Harvest allows you to put on funds on a single platform and get access to the best yield strategies out there.”
• Josh: “Our BTC and stablecoins strategies are some of the best yields for those tokens in DeFi. Additionally, the FARM reward token is useful because it has a buyback effect of 30% of revenue that redistributes tokens to FARM holders, creating a flywheel effect.”
• Josh: “If we are able to use liquidity mining rewards to get the liquidity high enough on Bancor, we’ll point the buyback mechanism towards Bancor.”
• Nate: “The Bancor FARM pool is currently at $1.3M in depth, while the Uniswap depth is currently around $3.5M. Do you know what the volume of the buyback mechanism is?”
• Josh: “We have a Discord bot that tells you this exact amount. It’s in the hundreds of thousands.”
• Nate: “Are stakers in the FARM pool on Harvest subject to IL?”
• Josh: “The ETH/FARM pool in Uniswap has IL, but the FARM rewards pool on Harvest is a profit sharing pool which has no IL. We also have an xSushi-like token called iFARM which has several use cases.”
• Nate: “What has been the general reaction in your community about the collaboration with Bancor?”
• Josh: “I’m part of the MPH community and saw them get whitelisted on Bancor as well. First, people have to come to terms with the fact that there is no impermanent loss, which is quite technical. It’s hard to believe! The biggest thing for the Harvest community is that there is single-sided staking on Bancor. In my opinion, single-sided staking on Bancor is the best single use for FARM next to staking for iFARM.”
• Tyler: “What determines where the buyback mechanism goes?”
• Josh: “Right now we’ve decided that if we can point the mechanism at Bancor, we will. Partially it’s because the Bancor community is quite engaged, and the single-sided feature makes it super valuable. We are pointed at Uniswap right now because that’s where the liquidity is.”
• Mark: “How difficult is it to point the mechanism at Bancor?”
• Josh: “Good question, and one I asked our dev team before the call. From what I know, it’s a simple process to just redirect the router. We have great devs so if it is more difficult, I think they will still do it quickly. Our community is all about great collaborations and co-marketing is part of the benefits of a partnership with Bancor.”
• Mark: “One of the biases I bring to proposals is to make sure there is a healthy overlap between two communities. In the case of FARM, I’m really excited. We have shared interest in DeFi.”
• Glenn: “You said you have over 150 yield farming strategies. Once V3 is released, will you create some strategies that go through Bancor?”
• Josh: “Yes, that’s the plan. We’d love to have a suite of Bancor pools.”
• Josh: “We’re actually asking for less LM rewards than typical projects because we want to work with Bancor. We don’t incentivize the pool with loads of inflation for nothing. We’ve asked for BNT rewards only to match the rewards currently available at the Uniswap pool. We’re hoping for around 40% APR on the Bancor pool.”
• Mark: “Our community has expressed concern that when the Bancor LM rewards end that the liquidity will just go back to Uniswap.”
• Josh: “The most likely situation is that we would ask for a continuation of Bancor rewards after they expire. The rewards that are on Uniswap for FARM actually come from Harvest. It’s possible that we can incentivize this Bancor pool in another way from Harvest.”

Q & A (40:01)

Q: Do you have a list of projects for the 3rd party liquidity mining program? I think it’s going to be huge.

• Nate: “We have a lot of interest already and have several teams that plan to do that. I would expect that many of the initial pools of V3 will have dual-sided rewards. This will be the first time ever that someone can earn dual rewards on single-sided liquidity which is interesting. This will enable staking in a fairly unique way. Most liquidity mining programs out there, if you want to re-stake your token it still needs to be paired with the other side of the pool. With V3, you won’t need to do that. Res-taking will be as frictionless as it gets.”
• Nate: “It’s also a chance to ask these programs what else they can do for us. We offer them IL protection, single sided liquidity, dual sided liquidity mining. What can you do for us beyond just co-marketing or providing liquidity? I agree with you, it’ll be huge.”

Q: If we’re talking about capital efficiency and liquidity amplification. Our IL protection is Bancor being designed to take on debt. If the impermanent loss is accelerated, how will we deal with that?” (43:55)

• Mark: “Without revealing too much about V3, I can speak broadly. This idea of capital efficiency is kind of a meme. An economics Nobel Prize was awarded to a team of Modigliani and Miller who proved that capital efficiency basically doesn’t matter. On an infinite timeline, the performance of Uniswap V3 should be the same as Uniswap V2. That isn’t even true yet and Uniswap should hope that it ends up being true. The IL on Uniswap V3 is 4–10x worse than it was on V2.”
• Mark: “Users of Uniswap V3 haven’t really seen the increased returns they were promised.”
• Mark: “Liquidity amplification needs a highly technical answer to make it better than the normal kind of liquidity. You may know that Bancor V2 was using 20x amplification before anyone was even messing with the curves in this way. We used Chainlink oracles to adjust the curve. In a sense, Bancor V2 in mid-2020 was already the automated version of Uniswap V3.”
• Mark: “Actually, the Chainlink team still considers us as a tier 1 user of their technology. We have a lot of architecture for Bancor V2. If we want to reactivate the liquidity amplification in the future, we can.”

Q: I saw Mark is speaking at SmartCon. Did they reach out to him?” (49:06)

• Mark: “Yes, they sent me an email and reached out to me on twitter. I’m excited to speak about Bancor and Chainlink. We’ll make sure it’s on YouTube and Twitter for those who miss it.”

Q: Is Bancor going to be on any panels at the Ethereum Community Conference?” (49:48)

• Nate: “It’s kind of a last minute decision for us to go. We’re so busy with V3 that we weren’t sure we would go. We’re not directly speaking but we’re hitting all the side events and the main event. While our competitors are speaking we’ll be picking off the high net worth LPs in the crowd.”

Q: Just a quick mention, FEI Protocol wants to get their TRIBE token whitelisted, potentially bring over their stablecoin, and maybe make a co-investment from their treasury the same way that Barnbridge did. That will be on snapshot tomorrow. (53:44)

• Mark: “I know that some of their community had doubts so I spoke with them. They had one user that was very concerned. What that user found heartening about that call is that we are well aware of the risks and that we are managing it actively. For instance, we know that the stable coin liquidity is a drag on Bancor due to IL and we are managing our risk profile around them. He applauded that.”
• Mark: “The call with their community went well. The FEI sentiment is positive. Many of their users have positive sentiment and are BNT holders themselves. All in all, it was a positive exchange.”

Q: When we migrate to V3, do we need to let our 100-day protection fill or will there be incentive to migrate early? (57:38)

• Yudi: “We’re trying to make it as frictionless as possible and also create incentive. To be honest, we’re not 100% decided on but we’re leaning towards accelerating protection when migrating. It’s a relatively small cost to the protocol comparatively speaking.”
• Mark: “We’d be shooting ourselves in the foot if we forced users to wait out their 100 days because what we really want is to let those interested in migrating do so as quickly and efficiently as possible. We want a successful debut without a bottleneck to migration. We know what the best user experience would be but we are continuing to investigate if there are any hidden risks. Until we are sure, we can’t commit to an answer.”

Wrap Up and Asks

Ethereum Community Conference:

• We will be at the Ethereum Community Conference this week in Paris. Nate, Steven, and some of our developers are going.
• If you will be there, or if you know anyone there we should meet, please reach out to @NateHindman or @FoxSteven on Telegram.

We’re Hiring:

• We want to make some hires in Asia, specifically in China, South Korea, and Vietnam. We’re looking for full-time community managers, marketing, and business development.
• We’re also looking for animators and videographers, preferably with crypto or DeFi experience. We’re starting working on our V3 explainer videos!

New Swap API:

• We have a new swap API which makes integrating with Bancor easier. If you know of any wallets or dApps that are on your radar which don’t integrate already with Bancor, let us know and request Bancor as a user of those products.

Connect Projects with Steven, Bancor BD Lead:

• Are there tokens you’re holding that we should whitelist on Bancor? DM @FoxSteven about it or connect us with any community leaders / core contributors on the project. Steven leads all our BD efforts and will connect with the team and work with them to get whitelisted or build a deeper pool.

Bancor Grants:

• We have content grants active at all times. Any users that want to create videos or guides, please reach out to Nate Hindman.
• We have analytics grants. If you want to work on Bancor data projects or if you are good with working on blockchain data and APIs, we can use your help!
• As always, we have rolling developer grants for those who want to build and innovate on Bancor’s infrastructure.