Bancor

[Anonymous No.28629977]

Can any Bancor chads explain to me what happens if LINK goes absolutely nuclear?
I've done my research and from what i understand, hypothetically if LINK goes to $1000 in 2 weeks and a bunch of LINK LPs want to withdraw their LINK from Bancor..

Then Bancor will be printing literally millions and millions of BNT to compensate for IL, driving the price of BNT to 0 and exposing all the LINK LPs to impermanent loss anyway, because the BNT they end up receiving to compensate for IL is effectively worthless

So tell me, what happens if LINK goes to $1000 tomorrow and LINK LPs on Bancor choose to withdraw their LINK with 100% protection?

[Anonymous No.28630113]

>>28629977
Bump for intrigue, havent been an lp on bancor cus i dont trust their il system

[Rubic No.28630115]

>>28629977
does Bancor not burn tokens?

[Anonymous No.28630159]

Stop posting this sorry FUD. Why would I unpool my linkies if it goes to $1000? I'd be raking in insane fees.

[Anonymous No.28630255]

>>28630159
Answer me. I've read every piece of literature that Bancor has made public and I believe i'm correct.

If LINK were to moon ridiculously, and LINK LPs wanted to withdraw, BNT would be printed in incredible amounts and it would drive the price down.

[Anonymous No.28630281]

>>28630159
It's a pretty valid concern. The reason why they would all withdraw is irrelevant, the effect of it is what is in question here

[Anonymous No.28630542]

>>28629977
A top 10 coin doing 35X in a single day?
The fees generated by the massive volume would cover a fair bit of the IL.
Not everyone has 100% IL coverage and not everyone would withdraw at the same time.
Even in your doomsday scenario BNT would not go to 0 anyway since there's other pool holding it's price up

[Anonymous No.28630584]

>>28630255
It was already answered when you posted it in the thread yesterday. We also have a thread up today, so idk why you made a whole new thread for it.

>>28630281
It's not a legitimate scenario. First, LINK will not go to $1,000 in such a short span of time. Second, marines have no reason to suddenly withdraw en masse for any reason. And the two events are almost mutually exclusive, because fees paid to poolers would be insanely high given such volume.

[Anonymous No.28630733]

>>28630542
>>28630584
So the answer is that the situation i'm describing is unlikely?
But theoretically, if LINK did go 35x tomorrow and a lot of LINK LPs with 100% protection chose to withdraw, they would likely crash the entire price of BNT because millions upon millions of BNT would be printed, right?

The counterpoint is that this is just unlikely?

[Anonymous No.28630977]

>>28630733
it is highly unlikely because your top 10 coin isn't going to 35x in one day, and if you're a LP receiving the rewards on LINK going 35x means you probably aren't going to withdraw everything lol

As far as BNT holders, that's one of the (impossibly low) risks you take into account lol

[Anonymous No.28631074]

>>28630733
Theoretically, everybody on /biz/ could all win the powerball on the same day. Not going to happen though.

[Anonymous No.28631082]

>>28630733
Outside of memes LINK doing 35X in two weeks is completly impossible. It would have MC 2x higher than eth.

[Anonymous No.28631473]

>>28630733
If you choose not to invest due to ridiculous edge cases that’s up to you. Also if link did 35x in a day the amount of volume the LINK/BNT would do would create so many fees for the protocol BNT in that pool, that it would be sore to cover millions and millions in IL payouts.
Not to mention BNT would moon too if it was suddenly warning a massive uptick in fees.

[Anonymous No.28631497]

>>28630977
>>28631074
>>28631082
Understood. And in the scenario where the entire market bulls ridiculously (but at the same time) as long as BNT keeps pace with the other coins mooning, then IL is minimized due to how IL works, right?
So if everything goes up 500%, and BNT also goes up 500%, then everything is fine and no IL is experienced

Basically the only worst case scenarios are those which a whitelisted TKN moons a lot more than BNT does in a given timeframe, and a significant number of fully protected LPs of that TKN choose to withdraw liquidity. Correct?

[Anonymous No.28631516]

>>28629977
OP, your concern is legitimate and no Bancor fag will answer it truthfully because it's obvious what will happen... the only way these faggots will answer is "it's very unlikely to happen / 0.0001% of occuring / link can't moon like that overnight"... but crazier things have happened in history - David slaying Goliath, Buster Douglas knocking out Mike Tyson, etc.

So yea, if LINK moons to $1000, then they will print a gazillion BNT, and holders are fucked. But like they said, it's "impossible" this will occur because surely, a coin can't moon like that overnight.

[Anonymous No.28631653]

>>28631516
This is the kind of answer i was looking for.
Acceptance that a scenario like this is not completely impossible, and if it occurred it would be detrimental to BNT

Thanks anon

[Anonymous No.28631798]

>>28631653
Of course you were just looking for an answer that supported your idiotic premise, fucking retard...

[Anonymous No.28632060]

>>28631798
it's not an idiotic premise. i've got LINK in Bancor and while I don't really care what will happen to BNT holders as long as my impermanent loss is covered, but I want to know how Bancor would cover it in even the most unlikely cases.

[Anonymous No.28632138]

>>28631798
i mean, edge cases like this are important for risk analysis anon

i still think its unlikely - given the projects growth, even if link did bust a nut and x10/x20 , all of the other liquidity pools would soften the blow

[Anonymous No.28632154]

>>28629977
I came to the same conclusion, I even made a nice little image to summarise my findings.

[Anonymous No.28632225]

>>28631516
>crazier things have happened in history
OP is pooling multiple crazy low probability events together in one sequence. They're not even independent of each other, since leavers would increase the share of the pool of remainers, then leavers selling off their BNT would distribute insane fees to those remainers. AND the fees distributed to remainers would increase exponentially as more left. It also depends on the current LINK/BNT pool size staying as dominant as it is.

[Anonymous No.28632416]

>>28630255
Maybe go on their discord or some shit and just ask a generalised version
>what happens if coin moons and lps withdraw
Also the scenario is likely in the event staking is released: staking causes massive price pump and also a way to earn apy through certain nodes (linkpool). I would definitely withdraw my liquidity in that case

[Anonymous No.28632418]

>>28629977
This is fundamentally how money markets work anon. Yes, if it moons to pluto and EVERYONE withdraws then bancor is kind of fucked, even though the fees would also moon to pluto in the same timespan as a counterbalance.
In the same vein, your bank is fucked if everyone withdraws.
Hedgies are fucked if every boomer withdraws.
The economy is fucked if everyone stops printing.
Bitcoin will go to zero if everyone sells.
See the pattern here?
What would realistically happen is that LINK might violently moon, fees would spike, BNT would moon because the LINK TLV in the protocol is now batshit insane, some marines would cash out and buy lambos, other whales and whoever pumped LINK to 1k in the first place might move into the Bancor pool to get fuckyou money on their stack.
COULD it get ultra-rugged if everyone withdraws? Yes.
Is it likely or in line with basic market actors and human psychology? No.
Linkies and Bancies are natural allies.

[Anonymous No.28632902]

>>28630159
>Why would I unpool my linkies if it goes to $1000?
because you can stake link on the actual link oracle network of course
>>28630542
>The fees generated by the massive volume would cover a fair bit of the IL.
not with a 35x, not by far
>Even in your doomsday scenario BNT would not go to 0 anyway since there's other pool holding it's price up
In fact if the effect of link mooning is big enough it would lead to a drop in bnt prices, which would expose all the other pools to IL as well. At that point people will probably want to unstake from those pools too because they want to be the first out the door when the whole thing collapses, leading to an amplification of the effect until bancor is totally destroyed (potentially).
>>28630584
>It was already answered when you posted it in the thread yesterday.
that was me, not OP
>>28630584
>Second, marines have no reason to suddenly withdraw en masse for any reason.
LINK staking of course. In fact the same concern holds for any coin which is pooled in bancor and suddenly announces a higher yield opportunity
>>28630733
>The counterpoint is that this is just unlikely?
Nah you got it right IMO, it's not that unlikely at all considering how quickly IL happens after a few multipliers. And the whole point of investing in this kind of shit is the asymmetrical huge reward possibility. You are completely sabotaging your own investment if you basically just make any potential x10 worthless before it's even started. Compare it with the venture capital model, you do 100s of investments of which most will crash and burn and a few will do x1000. If you remove the x1000 because it's "unlikely" then the whole system of investing doesn't make sense anymore.

[Anonymous No.28633004]

>>28632225
>>28632418
You fags are acting like if link moons people would suddenly rush to bancor to trade it there. I don't see why. The relationship between link mooning and people withdrawing at the same time, which you are discounting as unlikely, seems much more logical to me.

[Anonymous No.28633393]

>>28633004
>You fags are acting like if link moons people would suddenly rush to bancor to trade it there.
Bancor has the deepest link pool and would get routed to by all the aggregators. This thread is fucking retarded, just don’t stale on Bancor. So is all a favor.

[Anonymous No.28633456]

>>28633004
>The relationship between link mooning and people withdrawing at the same time, which you are discounting as unlikely, seems much more logical to me.
Then you might be destined to never make it.

[Anonymous No.28633586]

>>28632902
>because you can stake link on the actual link oracle network of course
This will make everyone panic switch why? Staking APY will probably be lower than Bancor pooling APY.

>>28633393
Even better, those withdrawing would be selling off their BNT for LINK... Which pool could that possibly route through other than the very same one they withdrew from?

[Anonymous No.28633654]

>>28630733
>if link doubled ETH's marketcap overnight

yeah ok man

[Anonymous No.28634223]

>>28632902
The doomsday scenario of LINK x1000 is an interesting one. What can't be ignored is that the increase in LINK value will increase the liquidity in the pool. The increased liquidity in the pool will decrease slippage. The decrease in slippage will increase trade volume. And finally, trade volume will increase fees. So even in the worst of scenarios, there's a positive feedback loop happening that will lessen the IL protection cover. Not to mention that in the special case where BNT is minted to cover IL, there is a built in lock (default 24hr) where that BNT cannot be swapped, preventing panic liquidations.

To summarize, it's fair to believe that due to the protocol design, in the doomsday scenario the additional fees generated will outweigh the cost of liquidity protection.

[Anonymous No.28634236]

>>28633004
Why would people withdraw LINK to go sell elsewhere when BNT has the deepest dex based liquidity for link?

[Anonymous No.28634237]

>>28632060
How would
>Uniswap
>Sushiswap
>Pancakeswap
>*Swap

If there is a run on any financial instrument it collapses. There is no magic.

[Anonymous No.28634342]

>>28632418
Big brain

[Anonymous No.28634649]

>>28634236
>Why would people withdraw LINK to go sell elsewhere
not "to go sell elsewhere" but to go stake it on the link network, obviously

[Anonymous No.28635089]

>>28634237
with normal pools there is IL and they are honest about it, it basically means you automatically sell the rising asset for eth on the way up which could even be what you want. With bancor the counter-asset in all pools is bnc itself, which will become worthless overnight in such a scenario. That seems much worse.
Also I just don't buy the "trading fees will make up for it", price and volume are not necessarily correlated and definitely not to such a degree as the bnc falling > IL > people unstaking > bnc falling feedback loop is.

[Anonymous No.28635160]

Aaannnd we're pumping bros. These BNT threads have been so comfy

[Anonymous No.28635851]

>>28635160
>These BNT threads have been so comfy
this

[Anonymous No.28635887]

>>28632418
a man of culture

[Anonymous No.28636112]

Dynamic Weights
Dynamic weights play a key role in generating the right incentives for arbitrageurs to continuously refill reserves.
The arbitrage incentive is always to convert BNTs to XYZs or vice-versa, such that the following conditions are met:
BNT/XYZ pool price= BNT/XYZ market price
XYZ current balance = XYZ staked balance
To demonstrate this, let’s denote the current XYZ balance as “s” and the staked XYZ balance as “t”.
Consider the case of “s < t”. Our goal is to set the weights of the pool, such that the arbitrage incentive of equalizing the pool price and a reference market price will subsequently increase “s” to become equal to “t”. In other words, we want the arbitrager to transfer “t − s” XYZs to the pool, in exchange for BNTs.
This means that whenever there is a shortage in XYZs and the pool is unable to pay back its obligation to XYZ providers, the pool creates an incentive for the market to immediately fix the deficit.
The exact same mechanism is applied in the case of “s > t”, which illustrates a surplus in XYZs.
What about the BNT side? Unlike the XYZ side, which is guaranteed to remain in equilibrium (where XYZ current balance = XYZ staked balance), the BNT side is not. However, it is nevertheless pushed in the right direction whenever arbitrage is closed. The more frequently arbitrage is closed, the closer BNT stays to equilibrium.
In the event that market actors need some extra motivation to restore balance to the pool, v2 pools introduce a dynamic fee to nudge the market in the right direction.

[Anonymous No.28636472]

>>28629977
You're correct and as a side note there is no such thing as single sided liquidity. A lot of my fellow linkies are in this shit and since some of you are alright I can advice you to take a very hard look at bancor and reevaluate your investment. Look at the other projects, study the game theory around price curves and what it means to be a market maker. Seriously learn about this shit and take a critical look at what you're doing.

[Anonymous No.28637160]

>fud /biz so they withdrawal their link and there’s room for mine

[Anonymous No.28638032]

>>28636472
Seriously, if you are so smart, write it up and explain.

[Anonymous No.28638218]

>>28638032

He can’t. “Study the game theory” is the emptiest statement I have heard all week.

[Anonymous No.28638268]

>>28638032
His argument, from a while ago when we absolutely BTFO him, is that "there's no such thing as single sided staking because someone has to provide the other side".
Which, in true retard fashion, is completely failing to comprehend that the point of single sided staking is that one person can provide one side and the other person the other side. Traditionally you could only supply 50/50.
Dude's fully retarded and ESL so I wouldn't waste much energy on him.

[Anonymous No.28639098]

>>28638032
look at this thread right here, the case is crystal clear and all bncfags have to say as a reply is "uhmm the pool rewards will make up for it?" "uhmmm arbitrageurs will fix that!"

[Anonymous No.28639337]

who the fuck cares if bnt crashes to 0 does this have any implications for being a link lp? Im scared of losing my stack cus im a faggot

[Anonymous No.28639586]

>>28639098
You've actually ignored every counter-argument, but keep trying

[Anonymous No.28639643]

>>28639098
This. I have 10k in BNT and was contemplating throwing some btc on it, but reading this thread was very revealing. I think it'll still do a 10x, but at the first sign of peak I'm dropping these bags faster than you can say designated shitting street.

[Anonymous No.28639677]

So for this coin to crash LINK has to 35x in a short amount of time?
Bullish.

[Anonymous No.28639829]

>>28639677
LINK IS GONNA SHORT SQUEEZE EVERYONE

[Anonymous No.28639932]

>>28639586
alright here goes
>>28633586
>Staking APY will probably be lower than Bancor pooling APY.
I don't think so but who knows.
>Even better, those withdrawing would be selling off their BNT for LINK... Which pool could that possibly route through other than the very same one they withdrew from?
exactly, that would only lead to even more IL in that pool

[Anonymous No.28640064]

>>28639829

[Anonymous No.28640098]

anyway I'm off to bed, dyor and don't get burned
tbf I think bancor is basically decent within a relatively narrow volatility range, they just take on too much systemic risk by trying to apply IL protection outside that range

[Anonymous No.28640262]

>>28639643
>>28640098
after they fucked me with their shitty/paper v2 launch i ain't touching this shitcoin again

[Anonymous No.28640371]

>>28640262
Easiest money I've ever made. Thanks for letting me buy your bags

[Anonymous No.28640514]

>>28640262
The more I read this sort of FUD, the more I am convinced Bancor is basically Link-tier when fully deployed.
Ultra brainlets like it for the memes and the numbers going up
Midwits ree and throw around nonsensical arguments on the level of "noooooo you can't just capture all the value in the world on smart contracts what if Y does a 10000000x in 2 attoseconds and crashes the markets noooooo"
While 200 IQ chads are in agreement that it is indeed the undervalued defi blue chip that has done nothing but over-deliver in the past quarter.
Stinkies and Bancies are best frens indeed.

[Anonymous No.28640546]

>>28639677
LINK has to 35x, staking APY has to be sufficiently higher than Bancor APY to lead to a digital banc-or run, and finally those unpooling have to sell their BNT instead of restaking it. In that sequence. When you pool 3 σ's together, you don't get 3σ, you get σ^3.

>>28639932
>I don't think so but who knows.
If it came out today it would certainly be less. If Bancor APY drops it will be due to increased market share and therefore smaller LINK/BNT pool dominance, reducing the chance of one single asset causing a bank run.

>exactly, that would only lead to even more IL in that pool
Sell-offs of BNT would cause IL regardless of the pool, but if all these sell-offs were to route through the very same pool they came from, they would dramatically increase fees, and - as more poolers leave - even exponentially increase fees awarded to remaining poolers.

[Anonymous No.28640793]

>>28639098

adjustable fees my dude

[Anonymous No.28640901]

>>28639643
Very revealing how? Literally every single thing would crash in circumstance described, this is not some genius finding.
>Literally zero things are risk free.
This is not smart

[Anonymous No.28641282]

>>28635089
You honestly think that LINK could go 35x without a massive spike in volume?

[Anonymous No.28641508]

>>28629977
theoretically you can drop dead from an aneurism any second now
you still there?