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Bancor’s upcoming airdrop of ETHBNT will instantly turn all BNT holders into liquidity providers who can immediately collect fees from ETH conversions on the Bancor Network.
As a result of the airdrop, the BNT token will no longer hold a reserve of ETH and BNT will shift from a dynamic supply to a fixed supply token. BNT will be connected to the Bancor Network via the new ETHBNT liquidity pool.
Up until now, BNT has existed as a dynamic supply token that holds 10% of its market cap in ETH. New BNT is created by sending ETH to the BNT smart contract.
As part of the ETHBNT airdrop on January 1st, 2020, BNT will shift from a dynamic supply to a fixed supply token and will no longer hold a reserve of ETH. The ETH reserve of BNT will become the ETH reserve of the ETHBNT liquidity pool.
ETHBNT is a new liquidity pool which processes ETH-based conversions in the Bancor Network. The ETHBNT pool is no different than other liquidity pools on the Bancor Network, such as DAIBNT or BATBNT, which respectively process conversions and collect fees from DAI-based and BAT-based conversions on the network.
The BNT reserve of the ETHBNT pool will be supplied by the Bancor Foundation. The ETHBNT liquidity pool will be activated with an equal 50/50 value of ETH and BNT on each side of the pool. Like most Bancor pools, ETHBNT will be configured with a liquidity provider fee of 0.1% (meaning an ETH <> BNT conversion will generate a 0.2% liquidity provider fee, since it requires two hops, ETH <> ETHBNT <> BNT).
The ETHBNT pool tokens being airdropped on all BNT holders each represent a proportional share of the liquidity in the ETHBNT pool. Once received, airdropped ETHBNT tokens can be sold at any time by users to withdraw their proportional share of the ETHBNT pool’s liquidity. ETHBNT can be converted into any token on the Bancor Protocol (e.g., ETH, DAI, EOS) or into other pool tokens, such as DAIBNT or DAIUSDB.
At the time of the BNT holder snapshot on January 1st, 2020, 1 ETHBNT will be equal in value to 1 BNT. All users holding BNT in a non-custodial wallet on Ethereum or EOS, or in a participating wallet or exchange, will receive 10% of their BNT holdings in ETHBNT. In other words, if you are holding 10 BNT, you will receive 1 ETHBNT in the airdrop.
The initial supply of ETHBNT pool tokens will be equal to 20% of the total BNT supply at the time of BNT holder snapshot. Like every pool token in the Bancor Protocol, ETHBNT pool tokens will have a dynamic supply: When a user adds liquidity to the ETHBNT pool, new ETHBNT pool tokens are minted; when a user withdraws liquidity from the ETHBNT pool, ETHBNT pool tokens are destroyed.
Receiving The ETHBNT Airdrop:
The BNT holder snapshot commences January 1, 2020 at 12:00AM EST. The snapshot is expected to take roughly three days to complete and verify on both the Ethereum and EOS blockchains. Once completed, users will start seeing the ETHBNT tokens in their wallets.
In non-custodial wallets like MetaMask or the Bancor.Network wallet (on Ethereum) and Scatter (on EOS), users will receive ETHBNT tokens directly in their wallets between January 3 and January 10.
Users holding BNT in participating custodial wallets and exchanges will also receive the ETHBNT tokens between January 3 and January 10. See the full list of supporting wallets and exchanges.
There are three ways to receive the ETHBNT airdrop:
- Hold BNT - you can buy BNT directly on Bancor.Network, 1inch.exchange, or supporting exchanges with BNT listed.
- Provide liquidity to a Bancor liquidity pool that holds BNT, such as DAIBNT or BATBNT
- Mint USDB (by locking BNT) - instructions on minting USDB
Liquidity providers to BNT-based pools (on Ethereum or EOS) and USDB minters will both receive the proportional amount of airdropped ETHBNT tokens to the wallet addresses that funded the pool or the USDB vault.
If you are holding BNT on EOS, you will receive ETHBNT on EOS. Users can convert their ETHBNT on EOS into ETH or any ERC20 tokens by moving their ETHBNT to the Ethereum blockchain using BancorX, Bancor’s cross-chain liquidity bridge. ETHBNT on EOS can be converted into EOS or any EOS-based token using an ETHBNT liquidity pool on EOS.
11:45PM EST: Move Bancor.Network, BancorX and Bancor APIs to maintenance (note that the Bancor Protocol & other interface implementations of the protocol will remain in operation during this time). Expected down time: up to 2 hours.
- Send the atomic transaction on ETH at 00:00 EST (05:00 GMT), changing BNT into a fixed supply token. The confirmation block of this transaction + 1 is the “BNT Snapshot Block”.
- Remove the BNT converter from the Bancor Protocol contract registry.
- Add new ETHBNT converter to the Bancor Protocol contract registry.
- Move Bancor.Network, BancorX and Bancor APIs out of maintenance
- On the BNT Snapshot Block, run the ETH snapshot script (estimated time: 3-4 days). The BNT Snapshot Block will also be used for the airdrop according to the BNT balance on that block.
- The block on which the EOS snapshot will occur will match the exact time of the ETH snapshot block.
- Publish exact snapshot block numbers on both ETH and EOS chains.
- Verify snapshots with third-party auditors. (Auditors to be shared following the airdrop).
- Run the airdrops scripts in parallel on both ETH (estimated time: 3 days) and EOS chains (1 day).
- The airdrop will be distributed in an ascending order based on wallet address/account name; for example, 0x123 will receive the airdrop before 0x124.
- It is expected that all ETHBNT will be airdropped no later than January 10, 2020.
Overnight, as we ring in a new decade, Bancor will transform from having a few hundred to over 60,000 liquidity providers — thanks to the ETHBNT airdrop.
With thousands of BNT holders generating passive income from decentralized liquidity pools, we hope this event will inspire a new wave of users to add liquidity on Bancor and effectively own a piece of the protocol.