Nexus Mutual will execute (what it claims to be) the “single largest” DAO treasury deposit on Bancor this week, joining other DAOs that have staked treasury funds on Bancor.
The deposit of more than $2.2 million wNXM comes as an increasing number of DAOs and token projects are “allocating funds on Bancor, including UMA, Flexa Network (AMP), Paraswap (PSP), KeeperDAO (ROOK), Harvest Finance (FARM), Request Network (REQ), Instadapp (INST), WOO Network DAO (WOO).”
As mentioned in the announcement, Bancor is “emerging as the preferred DAO Treasury Management solution to generate Protocol-Owned Liquidity that is protected from Impermanent Loss.”
Depositors on Bancor reportedly earned more than $200 million last year, “using the protocol to provide single-sided liquidity and earn passive income on over 100 integrated tokens with 100% protection from Impermanent Loss.”
Bancor has “become the largest source of decentralized liquidity for major tokens, accounting for 60-80% of Ethereum on-chain liquidity in tokens like LINK, SNX, BAT, ENJ, AMP, wNXM & more.”
Average annual yields on Bancor have “ranged from 5-60% in recent months. Meanwhile, more than 30 token projects plan to provide liquidity and incentivize pools on “Bancor 3”, the protocol’s upcoming new version.”
Nexus Mutual founder, Hugh Karp, said:
“Bancor doesn’t require any maintenance, is battle-tested and will ultimately drive higher income to our DAO and community due to there being no Impermanent Loss. We’re able to fund our pool with wNXM-only liquidity and attract loyal token holders as long-term liquidity providers without needing to sell tokens or issue incentives.”
Nate Hindman, Contributor at Bancor, said:
“We are very excited to have Nexus Mutual join the growing list of projects building sustainable decentralized liquidity for their tokens on Bancor. Both Nexus and Bancor are focused on designing decentralized solutions for risk-averse users seeking safe and reliable access to DeFi.”
DAOs stake funds on Bancor to:
- Build sustainable on-chain liquidity in their native token
- Earn safe and reliable passive income without exposing treasury funds to the risk of Impermanent Loss
- Expand token holder access to liquidity provision, creating more decentralized and robust liquidity
- Coming soon in Bancor 3: Deploy auto-compounding rewards that deepen token liquidity from day one
As reported, Bancor claims to be ‘the first decentralized staking protocol that lets liquidity providers earn trading fees with single-token exposure and full protection from impermanent loss.”
In 2017, Bancor “invented” the first automated market-makers (AMMs) on Ethereum. Today, it generates “millions in earnings per month for depositors, offering up to 60% APR on tokens like ETH, WBTC, LINK, MATIC, SNX”
As covered, Nexus Mutual is “a decentralized discretionary mutual where members come together to share risk.” The protocol’s 8000+ members earn crypto yields in “a much safer way by protecting them against new and evolving risks in DeFi such as technical failures, oracles attacks and hacks.”