Bancor is Back, Baby!

The Sustain Web3 Virtual hackathon is in full force right now! Check out our launch blog post for more information on the event and participating sponsors, there are $20k in crypto prizes up for the taking. With about a week left to go this hack, we’d like to highlight a community favorite and veteran sponsor, Bancor. Bancor is an on-chain liquidity protocol that enables automated, decentralized exchange on Ethereum and across blockchains. The protocol is made up of a series of smart contracts that are designed to pool liquidity and perform peer-to-contract trades in a single transaction.

Bancor is returning for yet another hackathon, after posting popular prizes in Ethereal Blocks and Road to Devcon. These past hackathon bounties incentivized hackers to build things like stable decentralized liquidity pools and custom token conversion widgets. Bancor’s Sustain Web3 bounties will have developers expand on these concepts with trade liquidity widgets and new liquidity pool designs – which we’ll delve into in just a moment. While initially, Bancor posted 2 bounties worth 2,000 DAI each, their team has decided to increase the bounty prizes: Each challenge now stands to pay out $2,000 DAI for 1st price, and $1,000 DAI for 2nd prize – for a whopping total of 6,000 DAI up for grabs!

What’s Bancor Been Up To?

The decentralized liquidity pool is among the most exciting innovations to emerge in the DeFi ecosystem. Bancor pioneered the liquidity in late 2017 and has processed over $2 billion in trade volume since then, with thousands of users now generating fees off its liquidity pools. Everyday users are incentivized to stake their idle assets in these pools for a share of trading fees generated on Bancor.

To accelerate greater network liquidity, and as a first step towards Bancor becoming a DAO, the project recently airdropped roughly $2 million in ETHBNT on 60K+ BNT holders. Now every token holder is a part “owner” of the protocol who is generating trading fees from every ETH-based conversion in the network. 

Meanwhile, the core development team has sharpened its focus on the protocol layer in the service of third-party developers who are building front-ends that make it easy to interact with Bancor pools – some of which were built in past hackathons!

To meet the growing demand for Bancor staking services, key DeFi players (such as Zerion, 1inch and Paraswap) recently launched staking interfaces integrated with Bancor’s permissionless smart-contract infrastructure. With these interfaces, it’s now easier than ever for users to add liquidity to Bancor, generate fees off conversions and launch pools of their own with flexible parameters. These interfaces also allow users to easily track and optimize ROI on their pool holdings.

In addition, we’re seeing more developers creating innovative liquidity pool designs that maximize profitability for stakers while offering competitive prices for traders. Within the system, value flows from traders to stakers, so it is important to balance the incentives of these two groups.

All of this is enabling the first “user-owned exchanges” to emerge and for the total liquidity value on Bancor to rapidly rise.

The Big Bad Bancor Bounties

With Bancor making so much progress on enabling the community to become key stakeholders in their protocol, it’s only fitting they use bounties to incentivize the developer community to push boundaries and architect the future of decentralized finance. Bancor has posted 2 bounties in Sustain Web3 with 4,000 DAI now 6,000 DAI up for grabs in total!

The first bounty for 3,000 DAI (2,000 DAI for 1st prize, and 1,000 for 2nd) challenges devs to build an innovative Blockchain Trade & Liquidity Widget:

Key functionality should include:

– Create new Bancor liquidity pools
– Add & remove liquidity from existing Bancor pools
– Perform conversions between tokens in the Bancor Network

There is already an open-source version of Bancor’s trading widget live, which developers can iterate on:

– Code:
– Front-end:

Bonus points: Adjustable Reserve “Weights”

Currently Bancor pools preset a fixed 50/50 ratio between the two reserves in a liquidity pool. Extra points will be given to front-ends that allow users to create Bancor pools with a reserve ratio that is between 30/30 and 50/50. This could theoretically result in the value of the liquidity pool tokens growing as users add liquidity.

The second Bancor bounty also for 3,000 DAI (2,000 DAI for 1st prize, and 1,000 for 2nd), challenges devs to build New Liquidity Pool Designs:

Bancor challenges developers to fork Bancor contracts and create new Bancor pool designs that are optimized for both stakers (high APR) and traders (low token prices).

New Bancor pool designs could:

– Integrate pools with lending protocols (e.g., lend pool tokens to Compound) to hedge risk for stakers
– Dynamically update the pool’s fees or reserve ratio to reduce impermanent loss
– Utilize more than two underlying assets (e.g., array of stablecoins or array of pegged assets)
– Allow stakers to be exposed to only one asset in the pool
– Calculate conversions with lower slippage, without requiring greater amounts of liquidity staked

Creativity will be appreciated, as well as simplicity 🙂

Here are some extra resources provided by Bancor:

With one week left to go, it’s hard to ignore these huge prize offerings from Bancor! Furthermore, you get to work on the cutting edge of DeFi and let your creativity run wild. To get started, visit the prize explorer, make sure you’re signed in (or link your GitHub account), click “start work” on a bounty, and get hacking!


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