Hello BAT Community,
Recently, the Bancor DAO passed two proposals to increase the co-investment limit in the BAT-BNT pool and to incentivize this pool with BNT staking rewards. This allows BAT holders to stake their BAT tokens and to earn fees and BNT rewards.
For anyone not familiar with Bancor, there are two key features that differentiate it from other (think uniswap/sushiswap/balancer) DEXes (Decentralize exchanges):
- Single-Sided Exposure: LPs can provide liquidity to a pool with single-sided exposure, either in an ERC20 token (“TKN”) or in BNT.
- Impermanent Loss Insurance: Impermanent Loss Insurance accrues over time, by 1% each day, until 100% protection is achieved after 100 days in the pool. There is a 30-day cliff, which means that if a liquidity provider decides to withdraw their position before 30 days passes, they’d incur the same IL loss experienced in a normal, unprotected AMM. If an LP withdraws any time after 100 days, they receive 100% compensation for any loss that occurred in the first 100 days, or anytime thereafter.