Decentralized protocol Bancor announces liquidity mining plan, supporting 8 token pools in the first batch

On November 16, the decentralized trading protocol Bancor announced a liquidity mining plan, which is currently awaiting community governance approval. According to the plan, BNT liquidity mining will first support 8 token pools, including 6 large tokens (ETH, WBTC, USDT, USDC, DAI, LINK) and 2 medium-sized tokens (OCEAN and renBTC). The protocol will issue a certain amount of BNT to LPs in two eligible pools every week: large pools will receive 100,000 to 200,000 BNT per week; medium pools will receive 10,000 to 20,000 BNT per week. Every two weeks, two new tokens can be added to the pool. The entire plan is expected to last 72 weeks. Starting today (November 16, 2020), when the plan is finally launched, all users who provide liquidity to the proposed token pool will receive BNT token rewards.

The following is the liquidity mining announcement released by Bancor:

We proposed the BNT liquidity mining program to achieve two main goals:

1. Attracting new liquidity into the Bancor pool

2. Generate stickiness to incentivize long-term liquidity provision

With more liquidity, Bancor is expected to win more market share, thereby generating more fees for liquidity providers (LPs), further increasing APY and protocol revenue.

Users who initially participate in BNT liquidity mining and earn reward yield will hopefully become familiar with the unique benefits of Bancor v2.1, including impermanent loss protection and single asset exposure.

Liquidity Mining Structure

The following structures are awaiting community approval through Bancor governance:

BNT liquidity mining will initially support 8 token pools, including 6 large tokens and 2 medium tokens. The first round of tokens proposed are as follows:

Large Tokens: ETH, WBTC, USDT, USDC, DAI, LINK Medium Tokens: OCEAN, renBTC

• The protocol will allocate a certain amount of BNT to LPs in each eligible pool every week: large pools will receive 100,000-200,000 BNT per week; medium-sized pools will receive 10,000-20,000 BNT per week.

• Every two weeks, two new tokens can be added to the liquidity mining program. After the newly added tokens are activated, their token pools will receive BNT rewards for 12 consecutive weeks.

• Additionally, reward pools will be selected through Bancor governance. If governance passes, a pool can be selected multiple times to receive rewards in a 12-week cycle.

• We anticipate the entire program to last 72 weeks.

• BNT liquidity mining rewards will be distributed 70% to BNT token-related liquidity pools and 30% to ERC20 (or "TKN") token pools.

• LPs can choose to lock their liquidity mining rewards in the protocol and participate in the Bonus Rewards Multiplier to receive multiple “rewards”, which will multiply their weekly BNT rewards by 2.

• Based on simulations, it is estimated that large token pools could lock up $50-60 million and medium-sized pools could lock up $5-6 million, with the estimated returns of the program exceeding 100% APY (see estimated performance in the proposal).

• Starting today (November 16, 2020), any user who provides shielded liquidity to the proposed reward pool (ETH, WBTC, USDT, USDC, DAI, LINK, OCEAN, or renBTC) will receive retroactive BNT rewards when the program finally launches.

For example, if a user is currently providing protected liquidity to an eligible pool, and BNT liquidity mining is launched within 3 weeks, when the program finally goes live, the user will receive the BNT rewards for the past 3 weeks and enjoy the “reward multiplier” amplification brought by the Bonus Rewards Multiplier.

For more information on the proposed liquidity mining program: https://blog.bancor.network/announcing-bnt-liquidity-mining-b30be90a008d