External Impermanent Loss Protection (ILP)

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To assist the Bancor DAO with its risk management, and support whitelisting new tokens, external teams can commit to providing their own token as part of the impermanent loss coverage for their users. The external coverage dampens the potential risks to the protocol, and therefore makes whitelisting potentially volatile tokens more attractive for the DAO. Moreover, the external coverage provides greater assurance to TKN stakers that the value of their withdrawal will be realized exclusively in the TKN they provided.

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