/biz/ - Business & Finance

Ponzi collapsed under its own weight
Basically an AMM that nobody used for swaps. The AMM was just a front
Bancor was all about getting liquidity providers. They decided to ride the 2021 hype train by offering liquidity mining by printing BNT. The more people provided liquidity, the more money they could make from their withdrawal fees
In the beginning it was sustainable because it was bullmarket and BNT could retain its value

Eventually we entered bear market and BNT started to rapidly lose it's value
The team decided to discontinue LM rewards as of v3, while adding ponzi mechanics like a 7 day withdrawal period to keep people in
Without the rewards, more and more people left. As they left, they started noticing that they were getting BNT instead of BTC/LINK/ETH
That was because impermanent loss costs had started getting worse and worse, while BNT being in such low valuation meant that more BNT had to be printed for the IL insurance (another "selling point" of BNT, perhaps the main one)
This caused even more people to leave. They had no reason to stay, no LM rewards and their stacks were getting replaced with BNT. But the more people left, the worse BNT inflation was getting and the worse BNT inflation was getting, the more people wanted out

This cascaded up until the point where people were at best getting only 50% of their stake back, the rest in rapidly devaluating BNT
And with a withdraw of over 2 million LINK on the horizon by Celsius, the Bancor team decided to epically disable IL protection, their main selling point. This is retro-active, meaning it affected all withdrawals, including ongoing ones. They are basically threatening people to either stay in their pools or lose 50%

This triggered a bank run of another 500k LINK, this time by the userbase collectively
https://etherscan.io/token/0x516c164a879892a156920a215855c3416616c46e?a=0x857eb0eb2572f7092c417cd386ba82e45eba9b8a

So yeah now we just laugh at the bancor shills and enjoy the carnage

>>49830268
>what went wrong
you trusted kikes

>>49834583
https://dune.com/ChainsightAnalytics/BNT-Minted-for-IL-Protection

because it is too costly
IL is getting so bad, when someone withdraws they get over 50% of their position in BNT
but so many people are getting out and BNT price is so low, the token is getting hyperinflated
basically their entire model has failed