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What Are Bancor Liquidity Pools?

Liquidity pools perform autonomous, peer-to-contract token trades and generate fees from each trade. Users can collect a share of a pool’s trading fees by adding liquidity to a pool and holding its “pool token”.

Pool tokens are ERC20 tokens that represent ownership stakes in liquidity pools. When you add liquidity to a Bancor pool, you receive pool tokens in proportion to the amount of assets you’ve added to the pool.

Bancor pool tokens can accrue value in three ways:

  • trading fees generated by the pool
  • pool rewards provided by a token project (via “liquidity provider incentive programs”)
  • pool rewards provided by the Bancor Protocol (via BNT inflation)

There are now numerous interfaces where you can add and remove liquidity from Bancor pools, track profits and analyze the best-performing pools on the network. Examples include DeFi platforms like Zerion, 1inch, Paraswap, CoTrader and EOS Nation.

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Disclaimer: When reading this article, please keep in mind the following: (1) Important to notice that wherever referring to any sensitive information of yours, including private keys, key-pairs or other account information, that information is yours. We can only make limited suggestions to how such information may be treated and protected, but the responsibility is yours. You should always make sure your information is protected and kept private, in the best available way; (2) that the information contained herein is a simplified extract of detailed information and sources generally available on the internet. This basic information was collected and displayed in attempt to provide you with better understanding of certain processes and aspects which relate to content and applications on Bancor’s site. Although we do our best to keep this information up-to-date, we cannot always guaranty that. This is since the information originates from third parties or relates to third party services, applications and technologies (such as Metamask, Scatter, EOSToolkit, or EOS), which are unrelated or unaffiliated with Bancor. These third parties’ applications, services and technologies are available on the internet, and may be subjected to applicable terms and conditions. Accordingly, though the said information and third applications, services and technologies (“Third Parties Content”) are believed to be reliable, Bancor provides no warranties regarding them (including their accuracy or completeness). IN NO EVENT WILL BANCOR BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION, LOST REVENUES, LOST PROFITS OR LOSS OF PROSPECTIVE ECONOMIC ADVANTAGE RESULTING FROM THE USE OF THE THIRD PARTIES CONTENT EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR FOR ANY CLAIM BY ANOTHER PARTY.

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