One of the oldest decentralized finance (DeFi) protocols, Bancor (BNT), is experiencing a surge of interest. Bancor was CoinMarketCap’s second-most trending cryptocurrency on 9 October 2023.
Bancor has been around since 2017. Essentially, Bancor is a set of protocols that generate liquidity for trading. Specifically, the Bancor3 protocol creates liquidity for automatic market makers (AMMs). An AMM is a protocol that builds decentralized exchanges (DEXs) and centralized exchanges (CEXs) for the blockchain.
Similarly, Bancor’s ArbFastLane protocol performs arbitrage between Bancor’s ecosystem and external exchanges. Arbitrage is an investment strategy in which a speculator buys and sells an asset in different markets at the same time. In arbitrage, the speculator hopes to make money from price differences. The speculator hopes the price difference is high enough to be profitable.
Carbon and Asymmetric Liquidity
Conversely, Carbon is a decentralized protocol built to automate on-chain trading strategies. They claim Carbon supports several advanced trading strategies including limit and range orders, grid trading (buy low and sell high), recurring strategies, momentum trading, and arb-pegged assets.
Recurring strategies let users create many automated trades with linked buy and sell orders. Range Orders let speculators create token pairs and different strategy types. For example, recurring and disposable.
Carbon offers some advanced features, including a custom spread, rotating liquidity, irreversible orders, zero gas trading fees, and an on-chain adjustment ability. They also claim Carbon offers “asymmetric liquidity -a new form of concentrated liquidity where market makers can distinguish between their buy and sell ranges. They can place Buy/Sell ranges at any price based on where a user expects a token will trade — and liquidity automatically rotates to fill trades in only the ranges defined by the user.”
The hope is that Asymmetric Liquidity will give traders, speculators, fund managers and decentralized autonomous organizations (DAOs) more control over trading strategies. They also claim Asymmetric Liquidity supports more flexible trading strategies.
Notably, Carbon appeared in August 2023 so it could drive some interest in Bancor (BNT). There are also some rumors online of an attack of some sort on Bancor.
What Value Does Bancor (BNT) offer?
The interest is not helping Bancor’s price. CoinMarketCap gave Bancor (BNT) a 50.47₵ Coin Price on 10 October 2023.
Conversely, CoinMarketCap gave Bancor (BNT) a $68.248 million Total Value Locked, a Fully Diluted Market Cap of $81.213 million, a Market Cap of $73.828 million, and a $44.248 million 24-Hour Market Volume on 10 October 2023. They base those numbers on a 142.500 million BNT Circulating Supply and a Total Supply of 161.967 million BNT.
This interest shows something interesting is happening with Bancor. I can’t tell what, but Bancor (BNT) is a cryptocurrency to watch. Bancor shows DeFi is far from dead.
Speculators need to watch Bancor because it shows the interest in DeFi is still high. I have to wonder if a new DeFi bubble is developing.