Bancor

What Is Bancor?

Bancor is an automated market maker (AMM) that utilizes its native token, BNT, as a universal trading pair and provides impermanent loss protection to liquidity providers.

Background

Bancor aims to protect liquidity providers from incurring impermanent loss by using BNT as the non-BNT LP counterparty. The protocol was first launched in 2016. It utilizes platform trade revenue and fees to compensate users who would have otherwise suffered impermanent loss.

How It Works

Bancor guarantees liquidity protection by minting/burning BNT supply and covers any shortfall with BNT tokens. BNT also serves as the governance token to whitelist protected assets and control protocol parameters.

Key Takeaways

Bancor is an automated market maker (AMM) that uses its native token, BNT, as a universal trading pair.
It provides impermanent loss protection to liquidity providers.
Bancor aims to protect liquidity providers from incurring impermanent loss by using BNT as the non-BNT LP counterparty.
It compensates users for impermanent loss using platform trade revenue and fees.
BNT also serves as the governance token, controlling protocol parameters and whitelisting protected assets.