How To Stake BNT Liquidity Mining Rewards & Compound Yield

How To Stake BNT Liquidity Mining Rewards & Compound Yield

By Bancor Network | Bancor Network Blog | 28 Jan 2021


 

  • BNT liquidity mining rewards are live in the bancor.network front-end.
  • Users can now view, withdraw and stake BNT rewards to compound yield.
  • By staking BNT rewards, users can earn swap fees and additional BNT rewards, which can also be staked to earn more fees and rewards.
  • Bancor’s single-sided liquidity pools allow users to easily stake BNT rewards without needing to stake tokens on the other side of a pool.
  • This creates a positive feedback loop where users are incentivized to turn earned rewards into productive capital, while increasing the liquidity depth of pools in the protocol.

Visit the Protection tab on bancor.network to track your BNT rewards earned from providing liquidity.

There are 3 ways to interact with your rewards:

1. Stake BNT rewards

Staking BNT rewards deposits your rewards in the same pool or a different pool, which opens a new position in the pool.

Your staked BNT rewards earn swap fees and additional mining rewards, which can also be staked to earn more fees and rewards (compounding yield).

Users do not need to supply additional tokens to stake BNT rewards, thanks to Bancor’s single-sided liquidity pools — only the rewards themselves.

Staking rewards occurs in a single atomic transaction, and allows you to maintain bonus multipliers on all your live pool stakes.

Staking rewards also provides crucial liquidity to the protocol, since it opens space for more non-BNT liquidity to enter the system.

You can stake rewards from within the Protection tab on bancor.network:

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Stake rewards in a single atomic transaction, without having to sell or supply new tokens.

In each pool, 70% of mining rewards go to liquidity providers who supply the BNT side. APR from rewards can be viewed in the Data tab (below). The red counter indicates the time remaining in the current rewards cycle. Governance has proposed extending rewards on key pools in the network, and a live vote (BIP26) is currently underway.

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APR from rewards varies based on a pool’s liquidity and its rewards schedule, as governed by the BancorDAO.

2. Withdraw BNT rewards

Send BNT rewards directly to your wallet. This removes liquidity from the protocol. Withdrawing rewards resets bonus multipliers on your live stakes across all pools to 1x, temporarily reducing your earnings potential on your staked liquidity until the multipliers return (bonus multipliers grow by .25x per week, up to a max of 2x).

3. Hold BNT rewards

Simply holding rewards in the rewards contract has no impact on your bonus multipliers; however, doing so will not generate additional rewards. You can stake or withdraw your rewards from the rewards contract at any time. There is no deadline to take action.

Summary

BNT liquidity mining is designed to create incentives for liquidity providers to use their rewards to compound gains and circulate liquidity back into the ecosystem.

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BNT rewards can be staked to increase protocol liquidity and compound liquidity provider yield.

We’re excited to see these novel dynamics play out in the Bancor ecosystem, as well as additional features that can be built into the protocol, including:

  • Joint liquidity mining functionality will allow third-party projects to incentivize liquidity provision on their pools in addition to any BNT rewards being offered. You can imagine a REN liquidity provider, for example, earning both REN and BNT mining rewards, which can be staked single-sided into the pool, to compound earnings and increase pool depth.
  • An automated rewards staking feature would allow for an LP’s rewards to be automatically staked by the protocol into high-yielding pools while minimizing gas costs.

Learn more about Bancor v2.1 and BNT liquidity mining

 


Bancor Network
Bancor Network

Bancor is an on-chain liquidity protocol that enables automated, decentralized token exchange on Ethereum and across blockchains.


Bancor Network Blog
Bancor Network Blog

Bancor is an on-chain liquidity protocol that enables automated, decentralized token exchange on Ethereum and across blockchains.

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