Credit: Original article published by Crypto Briefing Blog.

Bancor has announced that the next update to its Bancor Vortex which will burn part of the protocol’s swap fees of every transaction.

“Buy-and-Burn” Brings Value, Utility to BNT

With the latest update to Bancor’s new Vortex mechanism, DeFi’s first AMM will begin burning part of the swap fees accrued on the protocol. While that number has been set to 5% of the entire swap fee revenue, governance could adjust the percentage up to 15%.

When users stake the platform’s native token BNT on Bancor, they receive an equivalent amount of vBNT as a reward. This vBNT can then be used to vote on governance but must be returned if the user wishes to recover his BNT from the liquidity pools. Users can also choose to sell it against another cryptocurrency if they believe the gains made from that other cryptocurrency will be enough to buy back the vBNT sold and make a profit.

The protocol will now buy vBNT from the open market and burn it, effectively locking part of the BNT in the liquidity pools forever. This should lead to more stability for the liquidity pools, and a higher price for vBNT as the protocol itself will become a major buyer.

This buy-and-burn continues to raise awareness around Bancor which has been called “the dark horse of DeFi in 2021” by Wangarian from DeFiance Capital.

The Bancor Vortex was added in the protocol’s v2.1 update back in October 2020, which has created rising interest. The protocol’s total value locked has skyrocketed in 2021 following this update and the addition of other key features such as a fiat ramp.

Total Value Locked in Bancor. Data from DeFi Pulse.

Disclaimer: The author held ETH, BNT, and several other cryptocurrencies at the time of writing.

This article is strictly for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. does not provide investment, tax, legal, business or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any loss or damage caused or alleged to be caused by, or in connection with, the use of or reliance on any content, goods, services or opinions mentioned in this article.

#Bitcoin #Crypto #Cryptocurrency



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