Ethereum
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ETH · 2w

New Automated Yield Optimizer xBNT Live on Bancor

Automated Yield Optimization

Late last year, Bancor released the first-ever single-sided liquidity pools protected from impermanent loss. Since then, more than 20,000 users have started providing liquidity to Bancor pools, passively earning liquidity mining rewards on top of pool trading fees.

To offer single-sided exposure and IL protection, Bancor contracts must track each individual deposit separately, storing the data on-chain and requiring a great deal of computation in the process. As such, LP’ing on Bancor can be costly in terms of gas, including the manual re-staking of BNT rewards.

xBNT, built by the xToken project, addresses this issue head-on. By bundling BNT deposits together into a single contract, xBNT is able to minimize gas costs for LPs and re-stake BNT rewards autonomously to compound returns on behalf of its users.

How does xBNT work? Enter the system by depositing BNT on xToken Market — which mints xBNT, and sends the xBNT to your wallet. The xBNT contract allocates BNT to the highest-yielding pools on Bancor — taking into account each pool’s current yield from trading fees, BNT rewards, time remaining until the BancorDAO must vote to extend rewards on a given pool, and the likelihood of an extension. xToken intends to re-stake accumulated BNT rewards every 10–14 days via communal re-stake transactions. Track your returns via the xToken interface — as fees and rewards accumulate, the value of your xBNT tokens rises. Taking profits

There is no lock-up in xBNT — users can withdraw their full or partial stake at any time. There are two ways to exit the system:

1. Burn xBNT on xToken Market — this liquidates xBNT and returns the equivalent value of BNT to your wallet. While the xBNT contract will always target a buffer balance of 5–10% of BNT held in reserve, there may be times when there is no direct redemption liquidity available on the xBNT contract. In such cases, users may sell xBNT directly on bancor.ne...

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