Bancor 3 Integrates Over 100 Tokens to Enhance DeFi Liquidity

Bancor 3, a DeFi liquidity solution by decentralized trading protocol Bancor, has incorporated more than 100 tokens, such as USD Coin (USDC), Polygon (MATIC), and Enjin (ENJ), for more sustainable and safer DeFi yields through community sourcing.

Per the announcement:

“Users can now provide liquidity to over 100 tokens on Bancor 3 with no deposit limits and earn single-sided yield with zero risk of Impermanent Loss.”

With Bancor 3 initially integrating Ethereum (ETH), MakerDAO (DAI), Bancor (BNT), and Chainlink (LINK), the incorporation of the new tokens will help address some of the high-risk strategies that DeFi users are accustomed to because yields will be triggered by actual user activity other than short-term inflationary measures. 


The report noted:

“The launch of Bancor 3 comes amid a period of reckoning for the DeFi industry. Token holders have grown wary of the high-risk and high-frequency strategies that fueled growth in DeFi but have often led to heavy user losses. Users are increasingly turning to safer venues to park their assets.”

Bancor 3 aims to raise decentralized autonomous organizations (DAOs) awareness about token management and smart contract risks. 


The DeFi liquidity solution provider also emphasizes the importance of long-term token holders staying in pools because they can offer liquidity with near-zero maintenance and less risk. The report stated:

“Bancor helps token projects build sustainable on-chain liquidity without the need for costly incentives by giving token holders the ability to deposit in decentralized liquidity pools and earn with single-asset exposure, auto-compounding gains and 100% protection against Impermanent Loss.”

As a DAO treasury management provider, Bancor offers the “Impermanent Loss” guarantee through an automated safe staking system.


In March, Nexus Mutual, an Ethereum-based insurance platform, staked some of its treasury funds in Bancor to gain durable decentralized liquidity. As a result, it joined more than 30 DAOs using Bancor’s treasury management solution, Blockchain.News reported. 

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Nexus Mutual Enters Bancor’s DAO Ecosystem to Generate Protocol-Owned Liquidity

To gain durable decentralized liquidity, ethereum-based insurance platform Nexus Mutual staked treasury funds worth $2 million in the form of wrapped NXM (wNXM) tokens in decentralized trading protocol Bancor.

Joining more than 30 decentralized autonomous organizations (DAOs) using Bancor’s treasury management solution, Nexus Mutual seeks to earn yield with its treasury deposit without selling its native tokens.

Hugh Karp, Nexus Mutual founder, acknowledged:

“Bancor doesn’t require any maintenance, is battle-tested and will ultimately drive higher income to our DAO and community due to there being no Impermanent Loss. We’re able to fund our pool with wNXM-only liquidity and attract loyal token holders as long-term liquidity providers without needing to sell tokens or issue incentives.”

Bancor is emerging as a sought-after DAO treasury management provider based on its “Impermanent Loss” guarantee. It uses an automated safe staking system where depositors earn yield from more than 150 integrated tokens. They include Chainlink (LINK), Synthetix (SNX), Basic Attention Token (BAT), and Enjin Coin (ENJ). 


The decentralized liquidity arena is ticking

More players are entering the decentralized finance (DeFi) staking arena, given that Bancor paid liquidity providers more than $200 million in 2021.


Nate Hindman, a Bancor contributor, acknowledged that the decentralized liquidity route was the way to go and stated:

“We are very excited to have Nexus Mutual join the growing list of projects building sustainable decentralized liquidity for their tokens on Bancor. Both Nexus and Bancor are focused on designing decentralized solutions for risk-averse users seeking safe and reliable access to DeFi.”

With Bancor allowing DAOs to offer liquidity, they are able to safeguard their native tokens from sell pressure, enabling them to optimize the productivity of their staked funds. 


Some of the DAOs supported include Harvest Finance, Paraswap, UMA, KeeperDAO, Saffron Finance, WOO Network, and Instadapp.


Institutions are continuously seeking the diversification of digital assets for maximum returns, per a recent Genesis report


The study acknowledged investors’ promptness to expand their digital asset investments while demonstrating an avid interest in DeFi coins. Furthermore, institutional investors took a deeper approach to participating in the crypto market. 

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Grayscale Removes Bancor (BNT) And Universal Market Access (UMA) From Its DeFi Fund

The Grayscale Investment manager undertakes another phase of balancing its Grayscale DeFi fund. This round of rebalance inculcate the adjustment of the project’s Digital Large Cap Funds. This move marks its second balancing process after its launch in July 2021.

An announcement on January 3 revealed the in-depth adjustments to Grayscale’s two funds. The first rebalancing employed the Flexa payment network’s native collateral coin.

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Hence, Grayscale DeFi Fund’s weighting was rebalanced with the addition of AMP. Conversely, the rebalancing process led to the removal of Universal Market Access (UMA) and Bancor (BNT).

Though Grayscale created some adjustments to its funds’ weightings, the Grayscale Digital Large Cap Fund (GDLC) suffered no alteration to its token list. According to Grayscale’s announcement, the rebalancing process is the time to include AMP within a Grayscale investment vehicle.

Using its native token, Flexa can collateralize crypto payments and engage in fiat settlements. Thus, merchants and other users could quickly receive cryptocurrencies without delays.

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Significance Of Grayscale Rebalancing Process

Following this second rebalancing process, the addition of AMP brings the number of crypto assets within the Grayscale DeFi Fund to nine in the DeFi ecosystem. Also, the alteration to the Grayscale Fund reflects the changes on the DeFi Index (DFX) of CoinDesk. Among the components of crypto assets that made the Fund, the highest weighting goes to Uniswap (UNI) with 42.33%. The newly added AMP takes up 7.39% of the Fund’s weighting.

Having its popularity as Grayscale Bitcoin Trust, Grayscale now has about $30.1 billion assets under management (AUM). The share trading at $34.27 shows a 23% up from July 14, 2021, and a 59.16% up within the last 12 months.

The share price of Grayscale DeFi Fund at the press time is $5.56. This depicts an 11.2% rise from its launch price of $5 on July 14, 2021. Moreover, the Fund’s assets under management as of its launch period were $11.6 million with a share outstanding of 2.08 million.

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The ‘s performanceGrayscale Bitcoin Trust’s performance and its DeFi Funds is highly above the DeFi Pulse Index (DPI), which is the biggest retail DeFi Index based on the market cap from July 14. However, despite the huge trading volume of the DPI, it still indicates a dip of about 2% within the same interval.

Grayscale Bitcoin
Bitcoin continues to drop | Source: BTCUSD on

Among all spot Bitcoin ETFs and Corporations, Grayscale possessed the most significant upsurge of BTC holdings through 2021. By the end of the year, the Fund accrued 645,199 BTC. This explains 71% of the corporate market and spot ETF BTC holdings.

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Bancor introduces new staking pools and instant impermanent loss protection

Decentralized automated market maker (AMM) Bancor is set to launch new staking pools and an upgrade to its impermanent loss protection mechanism as part of its long-awaited Bancor 3 update.

Bancor was founded in 2017 and was the first DeFi protocol to introduce AMMs to the blockchain. The Ethereum-based exchange and lending platform also allows users to earn staking rewards via various liquidity pools.

In a Nov. 30 blog post introducing the upcoming Bancor 3 update, the platform announced several new features and upgrades including the Omnipool, Infinity pools, and “Instant Impermanent Loss Protection.”

Impermanent loss (IL) occurs on AMMs like Bancor or Uniswap when the prices of two assets in a liquidity pool diverge significantly, with one side going strongly up or down in value.

In October 2020, Bancor first introduced a mechanism to combat the issue by rolling out (IL) insurance, which guarantees that liquidity providers will receive up to 100% of their initial capital, plus fees accrued after a 100 day wait period.

As part of the Instant Impermanent Loss Protection update, users will no longer need to wait the initial 100 days as they will receive full protection from day one.

The new Omnipool feature will see the creation of a single pool to stake BNT that offers yield from the entire network, as opposed to the current method of offering yield from separate asset 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.”

Infinity Pools will offer unlimited deposits on Bancor, and no longer require users to wait for “space to open up in a pool before being able to deposit tokens.”

Other notable updates in Bancor 3 will include 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.

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Bancor is governed by a decentralized autonomous organization (DAO) and currently offers cross-chain support to the EOSIO blockchain. The platform said that Bancor 3 will be rolled out in three stages dubbed “Dawn, Sunrise, and Daylight,” and is targeting a release in Q1 2022 pending a vote by the BancorDAO.

According to data from DeFi Llama, Bancor ranks at the thirty-second largest DeFi platform in terms of total value locked at $1.65 billion. At the time of writing, Bancor’s native token BNT has gained 2.3% over the past 24 hours to sit at $4.06 with a total market cap of at $949.4 million.