The Bancorian Brief | March 22nd, 2022

5 min readMar 22, 2022

💻Development

The current Bancor 3 smart contracts are under review by PeckShield with an estimated completion time in the first week of April. No major issues have been uncovered and the current focus is on the withdrawal logic which has some complex math involved. OpenZeppelin will start code review this week and we are estimating their audit to complete in the second half of April.

BIP15: Bancor 3 Proposal
Bancor 3 Proposal Summary

We’re planning to release the Bancor 3 code repository in the first week of April and launch a $1m bug bounty program on the code. In the week following the code release, we plan on rolling out the Bancor 3 Beta. The Beta will go live on Mainnet with four pools ($BNT, $ETH, $LINK, $DAI), each with a $60m liquidity cap that will be gradually increased over the course of four weeks. We will incentivize the Beta with 140K in $BNT rewards or roughly 35K in $BNT for each pool.

Anyone will be allowed to participate in the Beta and we will be making the instructions available once it is launched on Mainnet. We won’t have a frontend available for the Beta and interactions will have to be done manually through Etherscan. The Beta will be running the full production code with restrictions in place (unlimited deposits disabled). Full product functionality will be enabled once the testing period has concluded. This means that if you participate in the Beta, you won’t have to migrate to production when that goes live. We are estimating the production release of Bancor 3 in late April/early May which will go live with a new frontend, $BNT rewards, and third-party token incentives.

💪Community

Nexus Mutual completed the single largest treasury deposit into Bancor with 50K $wNXM staked in the wNXM pool on 3/16. Another 20K $wNXM are pending for deployment into the Bancor $wNXM pool. Learn more about Bancor’s DAO Treasury Management Solution. Follow DAO treasury stakes on Bancor on bntlove.io/dao-treasuries

The following Twitter Space AMAs are scheduled this month:

Polygon x Bancor (Recording)
Tempus x Bancor (Recording)
Railgun x Bancor (3/29)
Bancor 3 Governance AMA (3/30)

All Twitter spaces are recorded and you can always listen to the recording if you miss the call.
Mark is currently at the Avalanche Summit conference in Barcelona and will be speaking there this week. He will also be speaking in the Celo Connect conference that is taking place in the first week of April in Barcelona.
We are in full force getting ready for the Blockworks Permissionless conference in May which will be taking place in Florida. This will be our biggest event of the year and we will have a keynote presentation.

🗳Governance

The rollout of Bancor 3 and future protocol mechanics will be composed of nine different proposals:
BIP15: Proposing Bancor 3

Below going live soon on Bancor gov:

BIP16: Bancor 3 Beta Release
BIP17: Bancor 3 Initial Whitelist & BNT Funding
BIP18: Bancor 3 LM Program
BIP19: Update to Whitelisting Requirements
BIP20: Quorum and Supermajority Changes
BIP21: Bancor 3 DAO Multisig Signers

2 more proposals related to Bancor 3 protocol security will be proposed in the coming week

There is going to be an updated set of whitelisting requirements and certain assets might not qualify for whitelisting in B3. Hence, we think that it is prudent to grandfather in existing tokens and automatically whitelist them in B3.
The proposed Bancor 3 whitelisting requirements are aimed at bringing over all existing V2.1 tokens.
$BNT funding limits (trading liquidity) for pools in Bancor 3 is proposed to roughly match the current size of pools. The DAO can vote to increase/decrease trading liquidity in specific tokens as needed.
A budget of 40m $BNT is proposed to be used as budget for liquidity mining to be deployed over the eternity of the protocol. 30m or 75% of the $BNT will be used to incentivize $BNT liquidity providers and the remainder (10m) will be used for token side liquidity providers.
It is proposed that $BNT rewards for $BNT LPs follow an exponential decay emission schedule that will gradually decrease over time. $BNT rewards would be cut in half every two years, so if there is 30m in $BNT rewards going to $BNT LPs, 15m of the $BNT will be distributed in the first two years, 7.5m $BNT distributed in the next two years, 3.75m after that…and so on and so forth. The model is similar to the Bitcoin halving, except rather than using “step-wise” halving which creates more abrupt emissions reductions, halving of BNT rewards is proposed to occur continuously and deplete more gently over time.

Recent Gov Proposals:

🌐Ecosystem

🌀Bancor Vortex🔥

This past week, we saw roughly ~45K $vBNT that was burned by the vortex. At current $BNT prices (~$2.50) this equates to ~$112.5K worth of $BNT locked forever🔒

+----------------+--------------+
|      time      | burnedamount |
+----------------+--------------+
| 3/14/2022 0:00 |  16296.56933 |
| 3/15/2022 0:00 |  5210.092328 |
| 3/16/2022 0:00 |  6807.753106 |
| 3/17/2022 0:00 |  4082.430766 |
| 3/18/2022 0:00 |  4250.603578 |
| 3/19/2022 0:00 |  4412.576868 |
| 3/20/2022 0:00 |  4225.187923 |
| Sum            |   45285.2139 |
+----------------+--------------+

The cumulative $vBNT burned amount increased from ~2.54m on 3/13 to ~2.58m on 3/20.

📊Key Metrics

7-day total cumulative fee revenue: ~$266K

30-day total cumulative fee revenue: ~$1.45m

Source: token terminal

📈 The average daily revenue for different time periods:

7 days ~$38K
30 days ~$48.3K

The 30-day annualized daily revenue equates to ~$17.6m in annual trading fees paid to LPs. For the past 30 days, trading fee revenue is down (~$700K) as compared to the previous 30 days.

💰 In terms of protocol revenue, Bancor earned around ~$725K in monthly revenue for $BNT holders.