Bancor

Read the original proposal on Discourse

Coming from this thread.

I am looking to make the fees competitive in the BAT-BNT pool with other decentralized exchanges (Uniswap/Balancer). Uniswap V2 and Balancer have roughly 5.3M and 1.2M in respective liquidity for the BAT-ETH pair:

The above doesn’t count Uniswap V3 which has an additional 775K in liquidity on the BAT pool:

That’s roughly a total of 6M in liquidity on Uniswap for the BAT-ETH pair.

At the moment we have roughly 2x the liquidity of both of these DEXes combined:

The fees for these pools are set at .3% for Uniswap and .6% for balancer. I am looking to set the fee for our BAT pool to .2% to match Uniswap (ETH<->BNT<->BAT two hop swap = .3%) and potentially capture some of the smaller trades that are being sent in that direction. At the moment, even though we have a large pool, Uniswap V2 seems to have very similar volume (if not larger for certain days) as compared to us.

My assumption is that when the price impact on Uniswap exceeds our current pool fee .6% (ETH<->BNT<->BAT) then aggregators will send those trades in our direction.

I think this pool should be capable of more volume but I think that the current fee .5% is holding us back (we have competitors). A quick test for this, when swapping from BNT to BAT , I am seeing that any amount above 200 BNT (~$600) does not go through Bancor. 1inch essentially is using the USDT/ETH pool (and others) to swap the BNT and then sending it to some other location:

we don’t come into the picture again until the order is roughly ~10K at 20%:

So roughly orders within the range of $600-$10K should hopefully be captured at a higher numbers by us after this change.