The era of decentralized networking and open-source software technologies always demands transparency and high-class security features in financial market spaces. The Defi ecosystem is designed to manage and verify the identity services and offer individuals with safe banking facilities and platforms for pooled lending and borrowing. This ecosystem also enables financial tools like prediction markets, DEX, tokenization platforms, etc. Decentralized liquidity pools are the latest development in the field of cryptocurrency. The liquidity pools are the basics for the conception and evolution of the present-day financial markets. Bancor is one such an on-chain liquidity protocol platform that helps individuals to experience automated and decentralized exchange. Private and permissionless transfer of values occurs through an open-source code between the blockchains.
— Ren (@renprotocol) July 8, 2020
REN, which is one of the most popular networks that help in the wrapping and unwrapping of tokens in the chain system, has announced that Bancor and renprotcol will continue to take Defi ahead with advanced liquidity. The use of dynamic weights is the latest addition to the Bancor V2 liquidity pools. These weights state the percentage exposure of each ERC20 tokens in these liquidity pools.
Bancor always allows its owners to upgrade their experience using the converter and smart token. The Bancor V2 has come up with dynamic updates of weights as per the conditions of the financial market. Together, REN and renBTC will ensure a systematic collection of trade fees with complete exposure to base tokens. Chainlink’s latest REN and renBTC liquidity pools utilize current and existing price feeds- REN/ETH feed and BTC/ETH feed. These two liquidity pools will also help mitigate the impermanent loss and enhance benefits from liquidity amplification.
.@renprotocol and @Bancor continue to innovate and push the #DeFi ecosystem forward through advanced liquidity provisioning. One of their new features utilizes #Chainlink's REN/ETH price reference feed, which is now live on mainnet for developers to incorporate in their dApps. https://t.co/VoKfOSsWgS
— Chainlink – Official Channel (@chainlink) July 8, 2020
The integration of Chainlink and contemporary Automated Market Maker (AMM) offers the most competent bonding curve, which ensures the reduction in slippage. Impermanent loss of both stable and volatile tokens is taken care of in this upgradation process. Thus, the token teams and the users can operate with enhanced confidence about their profit from trading fees. The rise in the token price on the external market simultaneously upsurges the weights of liquidity pools.