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First class position: in depth interpretation of decentralized trading platform Bancor
2022-02-02 22:45:23 【First class warehouse】
Original title ：《 First class warehouse Research Report ：AMM DEX The Precursors Bancor》
Bancor It is a decentralized exchange that focuses on solving impermanent losses ,v2.1 The core mechanism of the version is BNT Flexible supply , Compensate the liquidity provider for the impermanent loss , Can basically achieve 100% Cover , And the economic model is sustainable in the long run .v3 The version will be in v2.1 Improve and upgrade functions based on the version , Want to further improve the user experience and revenue .
Bancor yes AMM DEX Forerunner , But in Uniswap、Sushiswap etc. AMMDEX When it appears ,Bancor The market share of . And then Bancor choice “ Solve the problem of impermanence loss ” As the starting point to improve the protocol . stay v2.1 In the version ,LP Providers basically don't suffer from impermanent losses .
Its v2.1 The core of the version is BNT Elastic supply , And it exists 2 A feature ：
1） Support single currency to provide liquidity , Reduce exposure ;
2） Support liquidity protection . The protocol adopted 2 Road protection , First, use the agreement transaction fee to compensate the liquidity provider for the impermanent loss , When the transaction fee is insufficient BNT Used to compensate for . Liquidity protection requires 100 Day lock can be realized on a regular basis 100% Cover , And there is an upper limit on the amount of liquidity pool .
v2.1 After the version is deployed , Present several characteristics ：
1）Bancor Liquidity within the agreement has increased significantly , However, the trading volume and market share have not expanded ;
2） There are few trading pools with sufficient liquidity , Some liquidity pools have poor liquidity ;
3） Some transaction pairs have good liquidity , exceed Uniswap etc. DEX, send Bancor Capture a certain market share ;
4） The liquidity pool of stable currency and some long tail currencies is limited by the limit limit , Unable to expand its liquidity pool .
In order to better stand on DEX field , Expand market share ,Bancor be based on v2.1 Version , Will release v3 edition , Optimize solutions for volatile losses （ Increase the upper limit of liquidity pool, etc ）, At the same time, other performance of the protocol is improved , The main improvements include ：
1） Remove the upper limit of liquidity protection . stay v2.1 In the version , Provided by agreement BNT There is an upper limit , Must be provided by the user BNT To expand the capital pool . After lifting the upper limit of liquidity protection , Liquidity within the agreement may grow again , Conducive to the formation of high liquidity 、 Low slip point 、 Increased trading volume 、 The increase in handling fees attracts a positive cycle of more liquidity , Especially for the current stable currency pool and some long tail currencies limited by liquidity limit . It should be noted that , After lifting the upper limit of liquidity protection , Forged in the agreement BNT The quantity increases , However, it has little impact on the actual circulation ;
2） Achieve instantaneous liquidity protection , Users can save and retrieve on demand , No longer need to wait 100 Genius can achieve 100% Impermanent loss protection , Improve flexibility in the use of funds .v3 The calculation of impermanence loss may adopt the quotation of Oracle , Therefore, there may be arbitrage , The pressure to compensate for the impermanence of the agreement increases , The use of forging may be increased BNT Possibility of compensation ;
3） Release BNT Summary pool , So that token transactions no longer need to pass BNT Make a jump , Can reduce slip points and Gas cost ;
4） allow BancorDAO Guide liquidity distribution . The agreement will introduce transaction liquidity （trading liquidity） And super liquidity （superfluid liquidity） The concept of , Trading liquidity is used to make the market , Super liquidity can be used as transaction liquidity , It can also be used in other charging strategies , The scale of transaction liquidity is still DAO decision , Tokens that exceed the transaction liquidity can be used in the super liquidity strategy , Be able to accumulate additional value for agreement participants .
besides , The agreement also adds liquidity mining reward and automatic compound interest 、 Bilateral rewards 、 Support third parties to share impermanent losses 、 Realization LP Functions such as token composability , It aims to improve user revenue 、 Improve the utilization rate of underlying funds . at present DEX Plate competition is fierce , Obvious head effect , from Curve The example of Adopting differentiated product strategy has the opportunity to compete for more market share , therefore Bancor Solutions to the impermanent loss of deep ploughing , At the same time, it is supplemented by improving the utilization rate of funds 、 Functions to improve the user experience , Is conducive to Bancor Compete for more DEX Market share .
1. Basic overview
1.1 Project brief introduction
Bancor It is a decentralized exchange based on Ethereum , The development direction is the solution of impermanent loss , The current protocol version is v2.1, The core mechanism is BNT Flexible supply .Bancor Upcoming release v3 edition , Further improve the solution of impermanence loss , At the same time, improve the utilization rate of underlying funds , Further balance traders 、 Liquidity providers and BNT Holder's equity .
1.2 essential information
2. Project details
2.1 Founders and contributors
Bancor ICO raised 390,000 individual ETH, According to the ETH Price , The total amount is as high as 1.523 Billion dollars .ICO The price of is 1BNT=0.01 ETH, At that time, a total of 79,323,978 individual BNT, Half of the total tokens were sold to ICO participants , rest 20% Allocated to ecological rewards ,20% Assigned to Bancor The foundation ,10% Assigned to Bancor contributor .
ETH Use of funds ：
The team did not make further updates on the subsequent use of its funds .
In terms of time ,Bancor It is the earliest in the market AMM DEX, At present, it is v2.1 edition , It's going on v3 upgrade .
AMM（Automated Market Maker, Automation market maker ） It uses the algorithm to replace the manual quotation of the traditional market maker , Take a token pool as the trading partner of the user . The token pool contains two or more transaction pairs , They have an algorithm of their own , This algorithm provides users with real-time token exchange rate . Traditional market makers can still participate , Add a large number of tokens in their hands to the token pool . This token pool brings together the liquidity of market makers , therefore AMM Also known as the liquidity pool （LP,LiquidityPool）.
Most of the market at present AMM DEX The algorithm is simplified , It's basically X*Y=V The algorithm of , Algorithm design differences only have a slight impact on price conversion . The main factor affecting the price is liquidity .
chart 2-1 Bancor Trading interface
chart 2-2 Liquidity pool interface
2.3.1 v2.1 edition
v2.1 It's the current version , There are mainly 2 A feature ：
1） Single currency market making , Reduce exposure ;
2） Liquidity protection .
v2.1 use BNT Elastic supply （elasticBNT supply） The mechanism of realizing the above two characteristics .
Bancor programme ：
a. When users go to TKN（ example ） Add token whitelist pool TKN When , The agreement will automatically cast new BNT, Newly cast BNT Value equals TKN The value of , This can lead to BNT The total supply of .
b. When users use this pool for transactions , Part of the handling fee TNK payment , Part of the handling fee BNT payment .
c. here , If another user provides... To the pool 100 BNT, The original pool 100 BNT Will be destroyed , The 100 gold BNT The corresponding transaction costs will also be destroyed .
d. When the whitelist pool expires , When the user is about to remove liquidity , Agreement accounting is an impermanent loss .
e. The agreement will use transaction fees to compensate for impermanent losses , And judge whether it is necessary to use newly forged BNT To compensate for the loss .
f. After compensating for the loss , remainder TKN Pool related BNT Tokens will be destroyed .
In order to protect the whole network from New BNT The impact is too great , The following restrictions are made ：1） The total amount of single currency addition and the number of coins minted due to the addition of a single token BNT There is an upper limit on the number in the whole network ;2） Liquidity protection rate is limited （ Need to be in 100 Only after the end of the day cycle can the liquidity be extracted to cover 100% Impermanence loss ）.
Bancor The income of a pool is divided into 2 part ：
1） The agreement forged BNT（Protocol-Owned BNT） Expenses incurred .
The agreement forged BNT The expenses incurred are used to compensate the liquidity provider for the impermanent loss , If there are still remaining handling charges after compensation, destroy . When the agreement fee is not enough to compensate for the impermanent loss , Then use the protocol BNT Subsidize ;
2）TKN（ example ） The cost of tokens , To liquidity providers .
The mobility protection mechanism is that the longer the user stays in the pool , The more you can get the protection of this mechanism , about 3 Months （100 God ） Time for , Can be covered 100% of the impermanence loss .
stay Bancor Under the single currency market making scheme , Suppose there is no impermanent loss 、 No, BNT Provider , The transaction fee obtained by the pool is TKN payment 、 Partly with BNT payment . When the end user extracts all TKN When liquidity ,TKN The value of will be greater than the initial value , So the agreement is automatically destroyed BNT It will also be greater than the number cast before . So the final ,BNT The total supply of will be reduced , This will increase BNT The scarcity of . But the assumption of this conclusion is almost impossible , Impermanence losses can be mitigated but cannot be avoided . according to Bancor The impermanent loss insurance mechanism , It is possible that the system needs to be newly cast BNT Tokens to compensate liquidity providers , In this case ,BNT The total supply of will increase . As for the specific increase / How much less , Depending on Bancor Trading volume and market volatility . Only when the expenses incurred by the agreement and the amount of impermanent loss reach a dynamic balance ,BNT Flexible supply strategy can be effective in the long run .
chart 2-3 The operation process is shown in the figure above ,TKN After the token provider provides the token , Will produce proof tokens that provide liquidity （Pool Token（PT））, Users provide... To the pool of whitelist BNT Will get vBNT, To represent what they protect BNT Mobility , And for community voting .
Banco Vortex It's actually selling BNT Provide evidence of liquidity vBNT The function of , So as to improve BNT leverage .Bancor The agreement will charge... Of the transaction fee income 5% For repurchase and destruction vBNT, The purpose of this is to make vBNT There are buyers .
votex yes v2.1 A last resort solution in ,vBNT Represents the deposited liquidity and transaction fees , And mining revenue and vBNT It's separate. .v3 Under the vBNT Will liquidity 、 Fees and mining revenue are bound , Therefore, it can be achieved that all income can be compounded .
Points for improvement ：
· stay Bancor 2.1 in , The deal still needs BNT As an intermediate token , for example ETH Buy ENJ, Need to go through ETH-BNT-ENJ transformation , Transaction costs and sliding points increase , Contract processing is relatively complex and improves Gas fee ;
· Guarantee 100% The premise of covering impermanent losses is to provide liquidity 100 God , Users cannot access on demand , Reduced capital utilization .
· There is an upper limit on the expansion of liquidity in some currencies .
2.3.2 v3 edition
v3 The version is for v2.1 A version that improves on defects , It is divided into 3 Stages , They are dawn （ Due in 2022 year 1 Published in ）、 sunrise （ Core functionality ）、 In the daytime .
chart 2-4 v3 Publicity map
The dawn phase is mainly updated 5 A feature ：
1） Instantaneous protection and impermanent loss ： No need for image v2.1 Version waiting 100 End of day cycle . Liquidity providers, even if on deposit and on demand , Liquidity protection is also available . But when instantaneous protection is lost , There may be arbitrage spread , Increase the pressure of system coverage loss , Improve the system additional issuance BNT The possibility of tokens being used to compensate liquidity providers . The new mechanism has been deployed , The existing liquidity of the protocol can be used more effectively, and the handling fee of the pool can be used flexibly to cover the non permanent loss of the liquidity pool in the network .
2） Release BNT Summary pool ： stay v3 in ,BNT The pool is a centralized pool . stay Bancorv2.1 in , Every transaction pair pool needs a BNT pool （ for example ETH/BNT、DAI/BNT）. Contributors say BNT After becoming a summary pool , Token transactions no longer need to go through BNT Turn jump , This reduces the number of users Gas And slide .
3） Automatic compound interest ： When users provide mobility , Revenue usually comes from transaction fees and liquidity mining incentives . Liquidity mining and transaction fee income can be automatically compounded . stay v2.1 when , Transaction fees can be automatically compounded , However, the user must manually compound the mining reward . Besides , stay v3 in , Project party and Bancor Can provide tokens as a liquidity reward （ Automatic compound interest is allowed for both sides ）.
4） Cancel the deposit limit . It's good for improving DEX Total liquidity , So as to provide better liquidity depth and price . As the liquidity of protection increases , Only the trading volume increases 、 Income increase （ Including transaction costs and other strategic revenue ）, In order to maintain the feasibility of the economic model in the long run . The agreement will introduce the concepts of transaction liquidity and superfluid liquidity , Trading liquidity is used to make market , Superfluid liquidity is used as trading liquidity and other cost based strategies . The scale of transaction liquidity is still determined by DAO decision , Tokens that exceed the transaction liquidity can be used in the super liquidity strategy , It can accumulate additional value for agreement participants . In essence, it is the problem of giving priority to the allocation of underlying liquidity , Used to get more returns through flexible strategies , At the same time, meet the liquidity needs of transactions .
5）BancorDAO The right to forge agreements is not limited to BNT How to help the agreement get additional fees , You can also vote on the forged in the white list BNT Whether the amount is reduced , Or will be forged BNT Transfer liquidity to other pools , Thus optimize Bancor agreement 、BNT The holder and LP The cost of obtaining .
Extra functions ：
1） Reduce Gas fee
2）L2 Deploy . At present DEX Basically, the scheme of Multi Chain deployment is adopted ,Bancor After the contract is improved , Easier to migrate .
3） One click mobility migration , Can be v2 Mobility moves to v3, Or will Uniswap、Sushiswap etc. DEX Mobility on the move to Bancor v3.
4） Combinatorial pool tokens ：Bancor v2.1 The pool token is bound to the bin , Not composable .Bancor v3 Will introduce new LP Token mode , Hope to improve the utilization rate of users' funds , perhaps Bancor The protocol will help users take advantage of LP Tokens get combined benefits . According to the team AMA Information , stay v3 In the version , If LP Token holders sell LP Tokens, （ example vBNT）, Then users no longer enjoy the income of mobile mining . At present, the mainstream lending products and DEX Of LP Tokens are actually freely tradable , But there are only a few in practical application LP Tokens are fully utilized . At present LP The higher utilization rate of tokens is Curve Of LP Tokens, , Has emerged based on Curve A series of ecological , Including aggregated revenue agreements, etc .Bancor Of LP The combination of tokens increases the possibility of compound income , However, the specific situation also needs to be combined with the degree of market acceptance and the cooperation with relevant project parties .
5） Third party liquidity protection ： stay v2.1 in , Impermanent losses through transaction fees and additional issuance BNT Tokens to compensate , Can basically make BNT Maintain micro inflation （ Mining without considering liquidity ）. As long as the impermanence loss is greater than the transaction fee income ,BNT Will remain in a state of inflation .v3 Removed the upper limit of liquidity protection , And instantaneous liquidity protection is adopted , The compensation pressure for impermanent losses may increase further , The token project party can provide tokens as compensation for impermanent losses , On behalf of Bancor Share the pressure .
6） Front end improvements .
at present v3 Many details are still under discussion . At present v3 In the dawn stage, performance is emphasized to compensate for impermanence loss and improve revenue .
The improvement points of impermanent loss compensation include ：
1） Instantaneous compensation ;
2） The third party （ Project side ） compensate ;
3） Remove the upper limit of liquidity protection .
Improve revenue. The improvement points include ：
1） adopt DAO Allocate liquidity , Improve the utilization of underlying assets ;
2） Support LP Token composability ;
3） Automatic compound interest .
If you can achieve impermanence loss protection and additional benefits , It can really improve the attractiveness of liquidity providers , It is possible to achieve liquidity growth 、 Low slip point 、 Increased trading volume 、 The increase in handling fees attracts a positive cycle of more liquidity .
surface 3-1 Bancor Big event
Bancor Team from 2012 Year begins , Just do it Appcoin Off chain trading platform . It's in 2017 In ICO The scale was also the largest at that time , The actual scale is much larger than the financing plan of the team .Bancor Is the earliest AMM DEX, The initial vision was to provide a trading market for long tail tokens , The core is to create and BNT Bound liquidity pool , Use algorithms to provide market quotations .Bancor Committed to Ethereum Ecology ,2018 Year cross chain EOS, UNDP develops a cross chain trading system BancorX, But the effect is not good , Mainly subject to EOS Poor ecological development .
because Bancor 1.0 Our algorithm needs to BNT Conversion tokens as token transactions , Therefore, we need to charge more handling charges , And lead to greater slip points , So it's similar to DEXs comparison ,Bancor Our trading volume lags behind , Most of the transaction shares on the Ethereum chain are concentrated in Uniswap On .Bancor v1 The liquidity pool is small 、 Slip a little big , Resulting in small trading volume , Low transaction fee income leads to the reluctance of liquidity participants to provide liquidity , This also forms a vicious circle .
meanwhile , It is also proposed in the market that AMM DEX Medium liquidity providers are suffering from volatile losses （ Non permanent loss ）, also AMM DEX When providing liquidity, single currency liquidity is usually not supported , It also causes liquidity providers to bear the risk of multiple token prices .
thus ,Bancor I hope to improve my AMM Model , Make the conversion of tokens more efficient , Increase trading volume , At the same time, avoid multi currency exposure risk and non permanent loss for liquidity providers .Bancor In the same year 4 Announced the launch of v2.0,v2.0 At first, the Oracle quotation scheme was adopted , But the market has used the oracle to quote AMM DEX The scheme proves that there are loopholes in the scheme .Bancor It's out v2.0 Beta There are some problems after version , Then suspend the upgrade , Re develop , Go straight into v2.1 Stage .v2.1 This version realizes the functions of non permanent loss compensation and single currency liquidity .
3.2 present situation
Bancor v2.1 Already run 1 year . The following is a Bancor Transaction data and Bancorv2 Relevant data since operation .
At present, there is no perfect measure in the market DEX A single indicator of , Trading volume is just one measure . Although in AMM DEX in , The higher the income , Can attract more LP, And the better the depth, the better the price , Increased trading volume will increase agreement revenue . however , The largest trading volume does not mean that the agreement is effective LP The yield is the highest of all agreements , Because factors such as capital utilization and impermanent losses will affect LP Income rate .
chart 3-1 Bancor Trading volume （2019.01-2021.11）
According to the figure 3-1, stay 2020 year 5 Before month ,Bancor The monthly trading volume basically does not exceed 1,000 Thousands of dollars （ As a reference ,Uniswap At that time, the monthly trading volume was about 1 Billion dollars ）. With 2020 year DeFi boom ,Bancor Trading volume increases with market activity , stay 2020 year 8 The month reached a small peak , The monthly trading volume is 1.6 Billion dollars .2020 year 10 month ,Bancor v2.1 Release , But it coincides with a decrease in market activity , therefore Bancor Trading volume has not increased significantly . And then ,2021 The market warmed again in ,Bancor The trading volume of and the overall trading volume of the market are rising rapidly ,v2.1 Release right Bancor The impact of transaction volume growth may be relatively small .
chart 3-2 Bancor Trading volume market share （2020.01-2021.11）
According to the figure 3-2,v2.1 Before release ,Bancor The highest market share is about 4%,v2.1 After the release of , With Bancor Increased mobility in the pool ,Bancor The market share of 2021 year 4 It reached about 5%, Then it fell to 2% about . Even though Bancor Increased liquidity of , But in fact, it doesn't have much impact on the market share . The reason might be Bancor Only the core pools maintain relatively stable trading volume , When there are hot tokens in the market ,Bancor In fact, there is no advantage , Therefore, the market share will decrease when there are hot tokens in the market , for example 2021 year Q3 and Q4 Stage games and meta universe tokens .
chart 3-3 Total amount of liquidity protection and types of tokens
According to the figure 3-3, at present Bancor The types of tokens supporting liquidity protection are about 80 Kind of . By 2021 year 11 month , The total amount of liquidity protection reached nearly 10 Billion dollars , The most liquid token is ：BNT（ Blue ）、WBTC（ Orange （ Next ））、MATIC（ violet ）、LINK（ rose red ）、ENJ（ Orange （ On ））, this 5 The total amount of liquidity of these tokens reached nearly 7 Billion dollars .
chart 3-4 BNT The total amount of tokens
According to the figure 3-4,BNT The total amount of forging increases with the opening of the pool . After liquidity is removed , The system is additionally forged BNT Will destroy . So when Bancor When the added liquidity increases to a certain extent , Within the system BNT The total amount will reach a relatively stable state .
chart 3-5 vBNT Total amount
vBNT Approximately equal to the pledge BNT The total amount of tokens , from 2021 year 6 Month begins ,BNT The total amount deposited has entered a relatively stable stage . By 2021 year 11 month 26 Japan ,vBNT About of the total amount destroyed 2%, because vBNT/BNT Less trading volume , Therefore, the fee income is not much ,vBNT The destruction rate is not high . Binding graph 3-4, Can guess , When Bancor v3 After the release of , If the upper limit of liquidity protection is released , At the same time, it realizes on-demand access and obtains liquidity protection ,BNT The total amount may rise rapidly over a period of time , But in Bancor After the total liquidity in the pool reaches a relatively stable level ,BNT The total amount will also enter a stable period .
Disclose information according to the team ,Bancor Nearly half a year will focus on v3 Development and marketing activities , The information currently disclosed is Bancor v3 The first stage of , It will be released later v3 The content of the second stage .Bancor v3 The first phase is expected to be in 2022 year 1 Published in , The team will be in 2 month v3 Second stage information ,3 Month or 4 The second phase of development will be completed in June .
summary ：Bancor Since proposing to solve the problem of impermanence loss , Began a series of explorations . at present v2.1 Version can protect liquidity , And through this function, the liquidity in the agreement increases rapidly , But still unable to expand market share . therefore , The team will continue to focus on solving impermanent losses , At the same time, further expand liquidity , send Bancor The agreement is better based on DEX field ,v3 Deployment is an important stage in its expansion of market share .
4. Economic model
BNT first ICO The total supply is 79,323,978 individual , And maintain dynamic supply in two years , until ETHBNT Turn to fixed supply during airdrop , Total supply becomes 69,148,642 individual , Less near 1000 m . In the deployment v2 Version and liquidity after mining ,BNT It belongs to inflation token . By 2021 year 11 month 24 Japan ,BNT The maximum supply is 234,106,568, among 83.11% The pledge is in the agreement , The actual amount of tokens in circulation is about 4,000 over BNT.
· Team in 2020 year 11 Start liquidity mining in January , a 72 Zhou （ No more than 2022 year 3 month ）.
· Bancor Provide weekly to liquidity providers in the whitelist pool BNT Reward , A large pool of funds gets... Every week 10-20 over BNT, Medium sized pools get 1-2 over BNT.
· Every two weeks , Two new tokens can be added to the liquidity mining plan . Once activated , The token fund pool is 12 Keep getting... For a week BNT token economy ;
· Once activated , The token fund pool is 12 Keep getting... For a week BNT token economy .
· BNT Liquidity mining rewards 70% To be allocated to the liquidity pool BNT End , The rest 30% Will be assigned to the base ERC20（ example TKN） End .
· The initial setting is 6 A large pool of funds and 2 A medium-sized capital pool .
stay v2.1 In the version , There is an upper limit setting for the whitelist pool of liquidity protection , That is, the protocol forged in a single pool and the whole network BNT There is an upper limit . If the user needs to deposit other kinds of tokens , We need to expand the number of users' deposits BNT Token amount . And deposit BNT Your users will get vBNT,vBNT Transaction fees that can be used to govern and obtain agreements .
Bancor v3 in , Although for LP It is still a simple deposit BNT The action of , but v3 In fact, to some extent, it will automatically seek BNT The best profit scheme , Therefore, it may increase BNT Demand for new products .
As there are no new mines through liquidity mining so far BNT Token data , Therefore, the following is only a rough judgment based on the existing data .BNT Inflation mainly comes from 3 Parts of ：
1） Liquidity mining ;
2） The agreement forged BNT, Not circulating in the market . This part BNT As users add to the pool BNT Or remove liquidity and destroy .
3） When the cumulative transaction cost of the agreement cannot cover the impermanent loss , Then when the user withdraws the mobility, the agreement will forge a new BNT Used to compensate liquidity providers .
chart 4-1 BNT Token supply
Binding graph 3-3,Bancor The liquidity protected within the agreement is from 2021 year 5 The month is basically maintained at 10 Around $100 million , Therefore, adding fluidity to the pool causes the system to collapse BNT The increase is negligible . Diagram 4-1 in ,BNT The total amount of tokens is from 2021 year 5 Month to date 6 Within months ,BNT The total amount ranges from about 2 Billion to 2.3 100 million tokens , Added 3,000 Ten thousand tokens .
5 Month so far （24 Months ）, Assume that 6 A large pool （WBTC、ETH、LINK、DAI、USDT Wait for mainstream transactions to ）、2 A medium-sized tank for mobile mining , Then it will issue additional shares of about 1,488 over ~2,936 over BNT. At the same time, combined with the v2.1 summary , The agreement fee generated by the transaction can basically cover the compensation for impermanent losses . therefore , We can draw ： at present BNT The main reason for token inflation is liquidity mining , Not an agreement BNT Compensate for impermanent losses .
stay v3 After version , The total amount of liquidity protection may increase , So the agreement is forged BNT The number of tokens will rise , Therefore, the total amount of tokens may increase , However, the actual circulation of tokens is mainly compensated by liquidity mining and impermanence loss BNT（ When the handling fee cannot cover the impermanent loss ）.
And in v2.1 In the version , The calculation of impermanence loss is settlement after the end of the cycle , The time period is lengthened , Be able to calculate the impermanence loss more accurately . And in the v3 In the version , The function of instantaneous impermanence loss compensation is added , It is expected that Oracle will be used for quotation , This feature may create arbitrage space for the agreement , Increase the pressure of agreement impermanence loss coverage .
1）v2.1 In the version ,BNT Aggregate inflation is mainly due to liquidity mining and agreement forging BNT increase , elastic BNT The economic model is feasible .
2） Unrestricted liquidity leads to increased liquidity within the agreement , thus BNT Total growth , But the agreement is forged with the increase of liquidity BNT Will decrease when liquidity is removed , Therefore, unrestricted liquidity has basically no impact on the actual amount of tokens in circulation .
3） There may be arbitrage space for instantaneous liquidity protection , So as to increase the pressure of compensation for the impermanence of the agreement , Increased additional issuance BNT The possibility of using tokens for compensation . The total amount of tokens may continue to increase .
5.1 Industry Overview
Bancor The subdivision track is ：DEX.
5.1.1 DEX present situation
We can intuitively feel from the business data DEX Status quo of the field .
chart 5-1 DEX Monthly trading volume （2019.01-2021.10）
From the picture 5-1 It can be seen that ,DEX The track is 2020 year 6 It was still silent months ago . from 2020 year 6 Month begins ,DEX The track enters the start-up phase of trading volume , Later on 2021 year 1 It officially broke out in August , Mainly because the trading platform is mature 、DeFi Multiple stimuli such as ecological development and market make the whole ecosystem on the chain into great prosperity .
chart 5-2 DEX Market share （2020.12-2021.11）
As you can see from the diagram , Most transactions are focused on Uniswap（ Pink ）、Sushiswap（ green ）、Curve（ Big red ）. More of the remaining market share DEX Include 0x Native（ rose red ）、Balancer（ Blue ） and Bancor（ Cyan ）.Bancor The proportion of trading volume from 2021 year 3 The number of months began to increase , stay 2021 year 5 Monthly peak ,6 After month Bancor The trading volume and market share of the company will decrease .
Our trading volume data for nearly a year has been enlarged to the weekly dimension level , It can be seen that 、 Stable echelon stratification ：
First tier ：Uniswap. It maintains more than half of the trading volume share most of the time , At most, it can even reach 75% Occupancy rate .
The second tier ：SushiSwap、Curve and 0x.Sushiswap Share in 10%~20% Between , Although the market share once exceeded 20%, But space is Uniswap extrusion .Curve It belongs to the anchored asset exchange agreement , keep 6%~10% Occupancy rate .0x It is the leader of order book agreement , At present, most order books DEX The bottom layer adopts 0x.
Third echelon ：Bancor、Balancer、DoDo. The share has remained at the same level for a long time 1%~5% Between .
Fourth echelon ： The market share of trading volume is lower than 1%.
chart 5-3 DEX Mobility Top10
stay AMM DEX in , High liquidity usually means better trading prices . therefore LP（ Liquidity providers ） yes AMM DEX Important participants in . In addition to safety and other factors ,DEX The biggest attraction of liquidity providers comes from revenue , It usually includes transaction fee sharing and mining subsidies . From the picture 5-3 It can be seen that ,Curve、Uniswap and Sushiswap In the first tier ,TVL stay 40 Over US $100 million .（Curve Statistics of Multi Chain summary data , and Uniswap and SushiSwap Only the data on the Ethereum chain is counted , Therefore, the gap is large .） The second tier is Bancor and Balancer, Liquidity in 20 Around $100 million .
5.1.2 Track Division
from 5.1.1 We can see that ,Uniswap stand firm DEX Faucet , rest DEX Competitive market surplus share .DEX The competition mainly comes from the supply side and the demand side .DEX The track is big , There are many types of participants （ Trader 、 Arbitrageur 、LP（ Divided into individuals and market makers ）、 Project side 、 other DeFi project ）, Each has its own appeal , therefore DEX There is room for product differentiation strategies .
We will mainly DEX Respectively AMM Paradigms and AMM Outside the paradigm 2 A subdivision track .
①AMM normal form
AMM Is currently the DEX The mainstream paradigm of , At present, the more significant force points are divided into the following ：
surface 5-1 AMM Let's go
notes ： The above classification is based on the starting point of the project business logic , Not perfect in form .
②AMM Outside the paradigm
In the very long run , The order book is the more ultimate model in form . Both parties to the order book , You can express your willingness to trade very freely （ Price 、 Number ）, but AMM You can only choose one of the two . In mainstream finance , Order book is the most widely used paradigm . At present, blockchain and Defi It's still in its early stages , Insufficient basic performance leads to high cost of orders , Insufficient liquidity leads to inefficient order book matching ,AMM Follow the trend , And occupy most of the market . But with the second floor 、 Even the development of a layer of Technology , Increasing liquidity , The probability will contribute to the whole DEX Paradigm shift .
5.2 Competitive analysis
Bancor The main task is still with the head DEX Fight for market share , Therefore, the following contents are based on Bancor Development status and v3 Focus on improvement , With the head DEX（Uniswap、Sushiswap、Curve） contrast .
It should be noted that , At present, it is difficult to find a single index to measure the pattern of the whole market , And trading volume and TVL Are important indicators . The calculation of impermanence loss is complicated , Therefore, the following data do not consider the impermanence loss of the agreement .
5.2.1 Trading volume 、 Users and revenue
The core purpose of decentralized exchange is to promote token exchange among traders , Trading volume is an important indicator of the success of decentralized exchanges , Can also reflect DEX The actual value of . In addition, the growth of transaction volume is also conducive to increasing the fee income of the agreement , So as to attract more liquidity providers , increase DEX The liquidity of .
chart 5-4 Volume comparison
According to the figure 5-4,Bancor The volume of trading lags behind the head DEX, The increase or decrease of trading volume is mainly affected by the market .
surface 5-2 In the past 7 Day transaction data comparison
Binding graph 5-4 And table 5-2, It can be seen that ,Bancor The volume and number of transactions are much lower than Uniswap and Sushiswap, But per capita trading volume and Curve The same is much higher than Uniswap and Sushiswap
The reasons may include ：
1）Uniswap and Sushiswap Has a head effect , Therefore, it has become the first choice for currency on the decentralized exchange of the project . The liquidity of long tail tokens is low , Slip a little big , Therefore, the transaction volume is small , Lower the average trading volume . At the same time, when the heat is high, the long tail token , Can bring huge transaction volume to the agreement , Therefore, it has a positive effect on the growth of transaction volume of the agreement .
2）Curve For benchmarking asset transactions , Mainstream assets have good liquidity , But the contract is complicated , therefore Gas Fei GUI , Not suitable for microfinance transactions .
3）Bancor The most liquid WETH、wBTC、BNT、LINK、MATIC The price of the pool will be better than Uniswap and Sushiswap, and Bancor The trading formula is more complex , And need to jump , therefore Gas The fee will also be more expensive , Not suitable for small transactions . When Bancor v3 After deployment , Things will improve .
The following figures do not take into account the volatile losses of liquidity providers , The user's actual income should be the total income minus the impermanent loss .
DEX The transaction handling fee is usually charged as% of the transaction amount 0.3%, The higher the agreement income, the greater the transaction volume . The higher the income DEX More attractive to liquidity providers , So as to achieve a positive loop . and Bancor Transaction pairs usually charge 0.1%~0.2% Service Charge , Some trading pairs will pass DAO Vote to change the handling rate .
chart 5-5 Agreement revenue comparison （2021.06-2021.11）
According to the figure 5-5,Uniswap My income far exceeds that of others DEX, The average daily income reaches 400 Over ten thousand dollars , and Bancor and Curve The average daily income of the agreement is 10 Around ten thousand dollars .
Lockup volume can be evaluated DeFi The growth of the agreement , You can also evaluate DEX Availability of liquidity . The higher the lockup , explain DEX The greater the liquidity available , Higher liquidity can lead to lower sliding points and better trading experience , Attract more users to trade , stay 1inch This kind of aggregation protocol will also give priority to the one that provides the best price when matching transactions DEX.
chart 5-6 Mobility Top 10 contrast （2021.11.30）
According to the figure 5-6 It can be seen that ,Uniswap Of ETH、WBTC The liquidity of mainstream token pools such as and stable coins is higher than Bancor.Bancor At present, only the former 9 The liquidity of a token is more than 1,000 Thousands of dollars in , Most pools are less liquid , Therefore, it is difficult to provide a better price .
surface 5-3 Liquidity comparison of some token types （2021.11.30）
From the table 5-2 It can be seen that ,Bancor Some of our liquidity pools are competitive ,BNT The reason for the small trading volume , It also lies in its “ health ” There are fewer pools , There are fewer types of tokens that can be traded normally . Because of the existence of liquidity protection , The biggest problem is that it limits the addition of small currencies , So when the liquidity ceiling is lifted ,Bancor Small currencies have the opportunity to expand liquidity , So as to compete for a certain market trading share .
5.2.3 Impermanent loss scheme
At present, the market has put forward measures against impermanent losses DEX The main plan is Bancor and DoDo. Based on the past 1 Year's practice ,Bancor The scheme subsidizes liquidity providers suffering from impermanent losses through transaction costs , Will be forged if necessary BNT, Therefore, we can realize 100% The impermanent loss covers . and Dodo Because the scheme is to introduce Oracle quotation , There is a difference between the quotation of the oracle and the real-time price on the market , Therefore, in addition to stable currency trading, it will suffer greater impermanence losses .Dodo At present, the largest source of trading volume is stable currency .
in other words , at present Bancor It is the only successful one in the market at present “ solve ” The problem of impermanence loss DEX, And its economic model is sustainable .
summary ： From the current data ,Bancor The operation is better than v1 Version period , But still behind the head DEX, And it's hard to compete for more market share from the head .
Bancor v3 The version has the opportunity to expand the Liquidity within the agreement again , And have the opportunity to improve the stability coin and Shanzhai token （ For example, the above ENJ、LINK、EDEN Wait for the token ） The liquidity of , So as to change the current situation . Optimize the compensation of impermanence loss 、 Improving the income of liquidity providers is a better development direction , There is a chance to improve Bancor Competitive advantage .
The order book is a more ideal trading model , This trading model has also been used in mainstream assets and finance for decades 、 Even hundreds of years of verification . Constrained by the performance of the infrastructure 、 Lack of liquidity and other reasons , It takes a long time to transition to the order book . In the long run , In the future, it may be composed of order book and special-purpose AMM Dominate the market . So we need to pay constant attention to .
at present DEX Domain head effect is obvious ,Uniswap、Sushiswap、Curve Occupy most of the market share for a long time , Formed its own Ecology , Whether for the project side or users , Has formed a head effect .
author[First class warehouse],Please bring the original link to reprint, thank you.
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