Following PTIP-61 and concerns expressed over the value held by the protocol’s treasury being higher than POOL’s market cap, this proposal seeks to deposit POOL tokens on a Bancor POOL pool.
This proposal is contingent on POOL being whitelisted and space created for a single-sided stake to be added. Should the proposal be well-received and POOL meeting all token requirements set by our DAO , I’ll draft a proposal to whitelist POOL on Bancor and create the space needed. Our DAO process generally takes between 1-2 weeks between discussion, voting, and proposal execution.
To increase liquidity with a more risk-averse option following security concerns about malicious actors that could attempt to take control of the PoolTogether treasury at a profit, as well as obtain yield with idle treasury funds.
This proposal seeks to deposit 600k POOL on Bancor, contingent on POOL being whitelisted - a process which involves our DAO approving a token to be listed on the platform.
Bancor v2.1’s two main distinguishable features are single-sided staking and impermanent loss protection. These are ideal for treasury stakes as PoolTogether wouldn’t have to deposit any pairing assets in the pool. Furthermore, impermanent loss protection means that the treasury wouldn’t lose value with its stake due to IL - which can be significant as we’ve observed in a recent study Bancor did in collaboration with TopazeBlue  .
The PoolTogether DAO would stake 600k POOL on Bancor, contingent on a POOL whitelisting proposal passing via the BancorDAO. The DAO should choose on the following:
- When to stake the funds - Bancor v2.1 or Bancor 3.
- Whether to activate dual LM rewards and get a BNT LM match to POOL holders.
- Pool swap fee - set by default to 0.3% but can be adjusted.
- LP tokens: Bancor 3 will bring LP tokens that represent a single-sided stake with no potential IL downside. This means that they represent an increasing value over time of the liquidity+fees+rewards in the POOL pool, when expressed in the token numeraire. These properties make the LP tokens ideal collateral, and can also be used for other strategies such as native staking and governance.
- Instant impermanent loss protection - instead of ramping up to 30% after 30 days and 1% a day until 100 days at which you’re at 100%, Bancor 3 will be offering impermanent loss insurance from day 1. However, a 7-day cooldown period has been added to safeguard the system. After the 7-day cooldown period, an LP may choose to leave the pool and the fees and rewards accrued during the cooldown period are sent back to the pool. If the LP does not leave, then it is as if they had never attempted to unstaked. There will also be a 0.25% withdrawal fee.
- Infinity pools - There will be infinite single-sided staking space in the pools. Some of the liquidity in the pools will be on-curve, i.e., used for swapping, while the rest of the liquidity can be used for internal and external strategies. The next Bancor 3 phases will explore some of these internal strategies.
- Lower gas fees - On the staking side as the contracts have been greatly simplified, and on the swap side as the swaps moved from being two-hop swaps to one-hop (BNT is used to price the assets instead).
- Multichain - Contracts are being written with multichain portability in mind, and will be much easier to deploy to new chains compared to the v2.1 contracts. The DAO will vote on which chain/s Bancor will be deployed on.
And many more features such as revamped tokenomics for vBNT, BNT Omnipool (one place to stake BNT), third-party Impermanent Loss Protection, new frontend and auto-compounding fees and rewards.
More info on Bancor 3:
Blog post: Introducing Bancor 3. Bancor 3 marks a New Day for DeFi — one… | by Bancor | Bancor
Mark’s presentation on V3: Bancor 3: Dawn Phase 1 Keynote @ DCentral Miami - YouTube
Landing page: try.bancor.network
Governance forum Bancor 3 spec (detailed): BIP15: Proposing Bancor 3 - LEVEL 1 (DRAFTING) - Bancor Governance Forum
There will be a migration process from Bancor v2.1 to Bancor 3, which will go live in the next couple of weeks. To incentivise migration, we’re running a dual LM campaign which might be of interest to the PoolTogether DAO:
- Any tokens committed for rewards will be matched in dollar value up to 50,000 BNT (roughly $100k).
- The POOL rewards will be auto-compounded in the pool, and can be used for trading up to the trading liquidity limit (which can be increased via DAO vote).
- The BNT rewards will be emitted over 24 months to POOL LP token holders that stake their LP tokens in the rewards contract.
- The LM rewards will increase the APR in the pool and attract more POOL holders to stake their tokens on Bancor 3.
Governance forum Dual LM campaign proposal: Proposal Addendum: Incentivize users to migrate to V3 by matching token side LM rewards with up to 50,000 BNT per pool - DAO Archive (SUBMITTED) - Bancor Governance Forum
Snapshot voting passed for the Dual LM campaign: Snapshot