Liquidity pools and staking product Bancor has released its "Bancor 3" protocol, which comes with new features designed to simplify staking, the company said in a statement provided to CoinDesk on Wednesday.
"Bancor has spent the last few years creating the equivalent of high-yield savings accounts for DeFi: Deposit your assets, sit back and earn," Product Architect Mark Richardson said in a statement.
"By helping token projects and their users securely and easily tap into DeFi returns, Bancor 3 enables robust and resilient on-chain liquidity markets that drive a healthy token economy," Richardson added.
Bancor 3 launched out of beta with an enhanced version that aims to create more sustainable liquidity by giving participants access to "single-sided staking" without the risk of permanent loss and providing them with "auto-compounding" and "dual rewards."
"Single-Sided Staking" provides returns on only one token that a user provides to a Bancor pool in order to receive 100% exposure to that token. In return, a single-sided "pool token" is issued to users, with these tokens rising or falling in proportion to the prices of the underlying tokens.
This is in contrast to other DeFi pools, which require users to deposit multiple tokens into a pool, increasing risk and exposure.
Auto-compounding features reinvest profits back into the pools to generate higher returns. Meanwhile, dual rewards relate to token projects and third-party partners that can incentivize user liquidity and activity on Bancor.
Bancor generates millions in monthly fees for depositors and offers annual returns of up to 30% on tokens such as Ether, Weighted Bitcoin (WBTC), Chainlink (LINK) and others.
More than 30 decentralized autonomous organizations (DAOs) use Bancor as a cash management solution, including Polygon, UMA, Nexus Mutual, and KeeperDAO.
The launch of Bancor has prompted token projects and DAOs such as Polygon (MATIC), Synthetix (SNX), Yearn (YFI), and WOO Network (WOO) to partner with Bancor, offering double rewards to users.