How to Stake & Earn NXM on Bancor v2.1

This guide shows you how to stake and earn wNXM (NXM) in the single-sided wNXM liquidity pool on Bancor v2.1.

Bancor v2.1 is a dramatic improvement over the existing AMM model, as LPs can now stay long on their tokens and avoid impermanent loss while providing liquidity. This “HODL + LP” strategy is designed to earn greater gains from both swap fees and liquidity mining rewards.

Link to the wNXM pool

Single-sided liquidity

Bancor v2.1 allows liquidity providers to stake in the wNXM liquidity pool on bancor.network and maintain 100% exposure to wNXM, instead of taking on exposure to a separate paired asset like ETH.

LPs can stay long on their tokens while earning:

  • wNXM swap fees
  • BNT liquidity mining rewards*
  • impermanent loss insurance

*A proposal to add liquidity mining on the wNXM pool has been raised in Bancor governance. If the vote is approved by governance, the wNXM pool will start receiving 10K–20K BNT per week for 12+ weeks. In addition, the protocol will offer up to 1M BNT for impermanent loss insurance. If the pool’s insurance limits are reached, adding single-sided wNXM requires more BNT being provided by users, or the insurance limits to be increased by governance.

Impermanent Loss Insurance

Impermanent loss insurance accrues for LPs over time, increasing 1% per day until 100% insurance (full protection against IL) is achieved after 100 days in the pool.

Meaning, if you stake 100 wNXM in the pool for 100 days, even if wNXM moons, you’ll still get the equivalent value of 100 wNXM back — plus swap fees & rewards. (Learn more about impermanent loss insurance.)

How to Stake & Earn wNXM on Bancor

1. Go to bancor.network

Select the wNXM pool & enter the amount of wNXM to stake:

If there is 0 space available in the pool for wNXM, you can create space by adding BNT, which is also protected from impermanent loss.

2. Manage

After your wNXM or BNT is deposited, your stake opens a new position in the pool manager in the Protection tab.

Track the overall value of your stakes, returns & impermanent loss insurance for each individual position. Highlighted below is the new position in the wNXM pool.

  • Initial Stake = Number of tokens deposit
  • Protected = Number of tokens you can withdraw with 100% protection + fees
  • Claimable = Number of tokens you can withdraw now
  • Fees = Total fees earned
  • ROI = Protected value/Initial Stake value
  • APR = Projected annual returns (e.g., 7d = 7d fees/liquidity * 365)
  • Current Coverage = impermanent loss insurance accrued (time until 100% protection)

Using the “Stake” button in the “Rewards” section, you can re-stake BNT liquidity mining rewards (guide) to compound yield on your position.

3. Analyze pools

View aggregate pool data in the main data table. See projected APR from BNT liquidity mining rewards in the “Rewards” column, 24h swap fee income (“Fees”) and annual percentage yield from swap fees (“APR”).

Further Reading

Bancor is an on-chain liquidity protocol that enables automated, decentralized exchange on Ethereum and across blockchains.

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