The following document addresses Frequently Asked Questions about:
- BNT Liquidity Pool Airdrop
- BNT Token Upgrades
- Bancor Stable Token (USDB)
1. BNT Liquidity Pool Airdrop
What will be the amount of the BNT Liquidity Pool Airdrop?
The Ethereum reserve of BNT will be airdropped on all users holding BNT on the Ethereum and EOS blockchains. In its current form, BNT holds a reserve of Ethereum that is equal at all times to 10% of the BNT Market Cap. The value of the airdropped reserve will therefore be equal to 10% of the Market Cap of BNT at the time of the airdrop.
BNT holders will receive the airdrop in proportion to their BNT holdings. For example, if someone holds 1% of the BNT supply, they will be entitled to 1% of the BNT Ethereum reserve at the time of the airdrop. A snapshot of BNT holders will occur prior to the airdrop. The period of time in which the BNT Holder Snapshot will occur will be announced soon.
What do I need to do in order to receive the BNT Liquidity Pool Airdrop?
Users who hold BNT in a non-custodial wallet do not need take any action in order to receive the airdrop in their wallets, except hold BNT. Users who use centralized exchanges such as Binance will need to move their BNT tokens into a non-custodial wallet.
Every BNT holder, whether they are holding BNT on Ethereum of EOS, will receive the airdrop. Holders of BNT will receive their portion of the BNT Ethereum reserve in proportion to their BNT holdings.
What exactly will I be receiving in my wallet as a result of the BNT Liquidity Pool Airdrop?
As a holder of BNT on Ethereum or EOS, recipients of the BNT Liquidity Pool airdrop will receive in their wallets a token representing their proportional stake in the new BNT/ETH Relay, based on the percentage of total BNT supply they hold at the time of the BNT Holder Snapshot.
Each time the BNT/ETH Relay processes a token conversion, a liquidity provider fee will be generated and deposited back into the BNT/ETH Relay. Holders of the BNT/ETH Relay Tokens can withdraw their proportional share of liquidity from the Relay at any time by selling their BNT/ETH Relay Tokens.
The BNT/ETH Relay token will be convertible for any ERC20 or EOS token in the Bancor Network (including ETH, EOS, BAT, DAI and more) on Bancor.Network, using any third-party wallet, such as MetaMask, Scatter or using the native Bancor Wallet. The token will also be convertible for other Relay Tokens in the Bancor Network, allowing users to act as liquidity providers to other Relays in the network. More info about Relay Tokens.
The airdropped token will also be convertible using any liquidity portals built atop the Bancor Protocol (such as bancor.cotrader.com) and also via secondary markets that emerge for the token on external exchanges.
Will there be more details about the mechanics and timeline of the BNT Liquidity Pool Airdrop?
Yes. More details, including dates, will soon be released to the community in upcoming announcements.
2. BNT Token Upgrades
Following the BNT token upgrade, will BNT still hold a reserve of ETH?
No, BNT will no longer hold a reserve of ETH, and you will no longer be able to mint new BNT by sending ETH to the BNT smart contract.
Up until now, BNT was a Liquid Token with a reserve of ETH equal to 10% of BNT’s market cap at any given time. Following the planned upgrade to BNT, BNT on Ethereum will be upgraded to a regular ERC20 token with fixed supply. Since BNT will no longer hold a reserve of ETH, the BNT price will be less correlated to the price of ETH.
The upgraded BNT token will be deposited in a liquidity pool on Ethereum, along with an equal value of ETH, creating the new BNT/ETH liquidity pool or “BNT/ETH Relay”. The new BNT/ETH Relay will be functionally identical to the current BNT/EOS Relay on the EOS blockchain, which holds an equal value of BNT and EOS.
After the BNT upgrade, all other Relays on the Bancor Network will continue to hold BNT (or a stable version of BNT) in reserve along with the relevant base token; for example: DAIBNT, BATBNT, BNTIQ, BNTESDT. See a full list of Relay Tokens live on Bancor.Network.
BNT is being upgraded to an inflationary model. What does that mean?
After the BNT Liquidity Pool Airdrop, BNT will be upgraded to an inflationary token with a default setting of 0%. Soon after, BNT holders will gain the ability to vote on the rate of inflation and its recipients. If BNT holders vote to increase the rate of inflation, inflation will be applied by issuing new BNT, similar to how large cryptocurrencies like BTC, ETH and EOS apply inflation. And just as ETH inflation goes to paying miners, and EOS inflation pays block producers, BNT inflation could be used to fund strategic liquidity pools, oracles and developers, as voted on by BNT holders.
On which Blockchain will BNT governance occur and how will voting work?
Every BNT holder, whether they are holding BNT on Ethereum of EOS, will be able to participate in governance. Specifics on voting mechanics will be released in coming announcements.
3. Bancor Stable Token (USDB)
How could USDB reduce market exposure for liquidity providers?
Up until now, creators of liquidity pools on Bancor (i.e., those who add tokens to the Bancor Network) have needed to deposit an equal value of the token they’re providing liquidity to and BNT, in order to initiate the pool. For instance, the BAT liquidity pool (BATBNT) was created with an equal value of BAT and BNT. As a result, creators of new liquidity pools and those who contribute liquidity to existing pools are exposed to the volatility of both of the pool’s underlying tokens.
Liquidity pools created with USDB would allow liquidity providers to add liquidity without speculating on both tokens in the pool.
A stable derivative of BNT opens the door to greater optionality for liquidity providers, who are able to contribute work on Bancor and generate fees from conversions without direct exposure to BNT.
Does Bancor have plans to make USDB the primary network token instead of BNT?
While USDB is still in early testing, it could potentially become an alternative network token in the Bancor Network. Theoretically, BNT-based and USDB-based liquidity pools would be interoperable with one another. Liquidity providers would have the choice to create or contribute to liquidity pools using BNT or using USDB as the network token.
What is the relationship between USDB and BNT?
BNT is needed collateralize and issue USDB. In other words, as liquidity providers connect to Bancor through BUSD relays, more BNT will need to be bought and staked as collateral, in order to print the BUSD needed for such liquidity pools.
Why did PEG change the name of the stable version of BNT from "BUSD" to "USDB"?
Due to there already being more than two other ERC-20 tokens with the name BUSD, PEG changed the name of the stable version of BNT from "BUSD" to "USDB" to reduce user confusion.