Bancor publishes the January 2021 protocol health report
Details of Bancor v2.1 protocol update released. The new update deals with the changes and the health status of the v2.1 protocol. The latest version has been active for three months, and now is the time to talk about the overall effect on the community. One-sided exposure and non-permanent loss protection for AMM liquidity providers through the use of BNT are two of the essential features of Bancor v2.1.
General status of the new version
Regular reports on the status and effects of new updates in blockchain protocols help developers and users to see the functions. They also promote the protocol by showing the results of new updates. When a new version of a protocol is released, it is vital to evaluate its effectiveness and find deficiencies to resolve in the next versions. The latest Bancor update focuses on the three-month performance of Bancor v2.1.
The new report is the result of aggregating and analyzing data from October 24, 2020 to January 6, 2021. It includes the growth status and the general status of the protocol.
The most important part of the Bancor v2.1 Health Report is a 1000% increase in network liquidity. In the last three months, Bancor has managed to boost USD 1.12M in swap fees. Fee income has exceeded total costs in the same period by a margin of 5 times. It means that the protocol and its owners, the BNT holders, cover the cost of temporary loss insurance and have significant income. The report as a whole shows that Bancor v2.1 has been successful in providing better services.
The new Bancor report focuses on various parts of the activity in the latest version. The most crucial part concerns temporary loss insurance. It is a mechanism to compensate for the losses that some liquidity providers experience.
“The impermanent loss in AMM's liquidity pools gets its name from its variable magnitude over time. The loss at any time is hypothetical and is determined by the relative price movements of the tokens within the group.
The new version of Bancor's insurance policy helps users to have peace of mind when depositing and wagering tokens. The insurance policy will somehow increase 1% each day after bowel movements. You will achieve 100% coverage after 100 days.
Bancor's short report is that the new version is healthy. The team believes that the significant increase in liquidity and fees shows a general state of health. It means that the system is profitable, healthy, and scalable enough to support more users.