xToken Launches Auto-Compounding Liquidity For Bancor Pools

According to a Bancor blog post from 26 April, xBNT will address the problems that arose from Bancor’s liquidity pools launched last year. Bancor’s contracts must track each deposit separately and store the data on-chain to offer single-sided exposure and protection from impermanent loss, but this requires a great deal of computation, resulting in high gas fees.

xBNT, built by the xToken project, addresses this issue by bundling BNT deposits together in a single contract. This way, xBNT can minimize gas costs for liquidity providers and re-stake BNT autonomously to compound returns on behalf of its users. 

“We are thrilled to see xToken pioneer a meta liquidity layer atop Bancor pools, making liquidity providing cheaper and easier than ever,” Bancor said. 

Users can enter the system by depositing BNT on xToken Market, which then mints xBNT and sends them to the users’ wallets. the xBNT contract then allocates BNT to the highest yielding pools on Bancor. 

There is no token lock-up period in the xBNT system, and users can withdraw their full or partial stake at any time. Users can exit the system either by burning xBNT on the xToken Market or by selling xBNT on the bancor.network.