Hey @Brendan thank you for the response, appreciate the feedback! You are right, this PTIP was attempting to supercede PTIP-61 but it doesn’t have to be. If the PoolTogether DAO wishes to, we can experiment with depositing a smaller amount of POOL tokens on Bancor 3.
I was prompted to write this proposal by a PoolTogether community member as I was made aware that the Olympus Pro and FEI agreements didn’t work as well as intended.
I’ll try to address your points in the best way I can to provide some transparency. Again, I’m more than happy to iterate on the proposal to get it to something you’d like to do as a community, or even drop it if it isn’t a commitment you wish to pursue at the moment.
- These kind of volumes mean that there is lots of liquidity and swapping pairs to move in and out of positions. More liquidity means a bigger market and more efficient swapping
Couple thoughts:
- Bancor has $1b liquidity on Ethereum and the deepest liquidity on tokens like LINK, SNX, AMP, ENJ, BAT and wNXM. On some trades, it might be more efficient to swap than Univ3, as there is no risk of the liquidity going out of range and we have significant amount of liquidity for some tokens.
- All major aggregators are integrated with Bancor and these support swaps between most tokens - this effectively means that for tokens that Bancor doesn’t support, aggregators can still be used and the swap will route through its pools.
- Concentrated liquidity comes at a cost - concentrated Impermanent Loss. We’ve already observed that a significant amount of LPs on Univ3 are better off holding their tokens in their wallets. Bancor protects against impermanent loss and I cannot understate how important it is, especially for passive liquidity providers and DAOs that don’t want to see the value of their treasuries depleted.
- PTIP-61 aims to pair POOL with USDC at full range on Univ3, which will most likely accrue in more Impermanent Loss than if it was paired with ETH on a full-range.
This is true and a good point, we’re currently only on Ethereum as we’re launching Bancor 3 which will be multichain. The decision to move to another chain will be a DAO decision but totally understand - if you wish to deploy liquidity on both chains as soon as possible then we are not the solution for it. However, on Ethereum, Bancor is a much more transparent and straightforward liquidity provisioning experience.
The pools on Bancor need the underlying tokens to be whitelisted before being traded - this is a design choice as we protect against Impermanent Loss. There is no business deal however - the whitelisting process for Bancor 3 is:
- Check the token requirements via a form - requirements can be found at the end of this page: https://docs.bancor.network/getting-started/the-v2-difference
- I create the proposal that goes through our DAO for voting, which takes around 1-2 weeks.
- Once whitelisted, the pool needs to be bootstrapped with at least 1,000 BNT worth ($2,320) of POOL to allow price discovery to happen. Trading happens thereafter
- From this point, liquidity can be added and removed anytime, with no capped space in the pools. Our DAO will manage how much of the liquidity is used for trading via a parameter we call the trading liquidity limit.
Again, anytime the DAO wishes to add/withdraw after the pool has been whitelisted, it can do so. No need for an account manager to handle it. If we have a POOL pool on Bancor, I will update the Treasury Working Group whenever proposals that affect the pool are being discussed.
I’d just like to emphasise how Bancor’s passive LP experience is much more friendly for slow-moving treasuries. No need to adjust ranges, can add/remove liquidity anytime, fees and rewards auto-compound in the pool, and LP tokens that would represent POOL single-sided staked with no IL downside.
Finally, our dual LM rewards matching campaign means that any POOL tokens worth up to 50,000 BNT committed for rewards are essentially 2x as efficient.