Summary
Bancor introduced the first Automated Market Maker (AMM) on Ethereum in 2017, it is the initial inspiration of several Automated Asset Esxchange generatin billions of dollars in cryptocurrency trading volume per day.
The "legacy" AMMs face today 2 major problems:
- Involuntary Token Exposure
- Impermanent Loss
With Bancor v2.1 (and soon 3.0), those risks can be totally eradicated offering a safe way to increase our stack in a particular token through 2 unique mechanism:
- Single-Sided Exposure: LPs can provide liquidity to Bancor either entirely in their preferred asset or entirely in BNT.
- Impermanent Loss Insurance: If an LP holds their liquidity in the pool for 100 days or more, they receive 100% compensation for any loss incurred in the first 100 days, or anytime thereafter. (Starts from the first day in Bancor v3)
It is indeed a safe heaven for Link Marines since a year now as more than 85% of ETH <-> LINK DEX liquidity share is done on Bancor:
Source: https://dune.xyz/Bancor/bancor_1
gOHM is not rebasing that's why it is possible to request whitelist on Bancor.
Motivation
With the creation of gOHM, we have now a way to farm liquidity on top of the rebase function of ohm. Unfortunately, it forces Ohmies to either expose themself in unwanted tokens to create a liquidity pair or worse, take the risk to reduce their stack of gOHM because of Impermanent Loss. With gOHM available in Bancor, ohmies will be able to stack gOHM only, gaining fees in gOHM plus possible rewards in BNT, making the token even more attractive to new investors.
BNT rewards could then be used by Ohmies to:
- Swap for more gOHM
- Stack to increase ROI and receive vBNT in return
- Swap vBNT for any token, permanently locking BNT in the protocol if not bought back (can be seen as leverage)
Proposal
The result of this proposal is to:
Create a proposal on Bancor governance forum to whitelist OlympusDAO gOHM with coinvestment for trading liquidity of 100,000 BNT.
The proposal still needs to be accepted by Bancor afterward.