Question 1

What is BNT? How does it differ from vBNT and bnBNT?

Accepted Answer

BNT is the network token of the Bancor network on Ethereum; it is not a liquidity-pool position receipt and is not the same as vBNT or bnBNT. Bancor V3 is a protocol version for on-chain automated market making, but whether a given contract mechanism can be used depends on the state of the relevant pool and contracts at that time. The three represent different rights and states: BNT is the network token; vBNT is a governance token associated with a BNT pool position; and bnBNT is a position token created when BNT is deposited into a pool. Holding BNT itself does not mean owning a pool share or vBNT, and holding bnBNT does not mean that an equivalent amount of BNT can be obtained directly without following the withdrawal process.

Question 2

How does Bancor V3's single-sided liquidity work?

Accepted Answer

Bancor V3 is designed to allow liquidity providers to deposit one token unilaterally into pools that are enabled and accepting deposits, rather than having to provide two assets in a fixed ratio; the deposit creates a bnToken representing that pool position. This design describes a contract mechanism and does not mean that every pool is open for deposits at all times or has liquidity immediately available for trading. The documentation calls such V3 pools infinity pools that can accept unlimited deposits, but liquidity used for trading remains limited by poolFundingLimit. Therefore, whether a pool can record deposit shares, whether those shares can contribute to trading depth, and whether a user can make a new deposit at that moment are three different questions. Emergency measures in June 2022 disabled deposits across the protocol, showing that a pool's current availability cannot be inferred solely from the infinity-pool design description.

Question 3

Why do vBNT and bnBNT become involved after depositing BNT?

Accepted Answer

Under a mechanism that permits BNT deposits, depositing BNT creates a BNT pool position: the user receives bnBNT and a corresponding amount of vBNT. bnBNT records that pool position; vBNT is a governance token and, in the BNT withdrawal path of that design, works together with bnBNT. This does not mean that such a position can be newly created at any time. Emergency measures on June 19, 2022 disabled deposits across the protocol; therefore, although the token roles of BNT, vBNT, and bnBNT can still help explain existing positions, whether a user can establish or modify a position must be determined from the state of the relevant pool and contracts.

Question 4

What steps and conditions are required to withdraw BNT from a Bancor pool?

Accepted Answer

The specific path for withdrawing from a Bancor pool cannot be determined solely from a bnToken balance. Early V3 documentation describes a process in which a withdrawal request is first initiated and then completed after a cooldown period; under that process, a BNT position also requires equal amounts of vBNT and bnBNT. The documentation lists the initial cooldown period as 7 days and states that this parameter can be adjusted by the DAO. However, after June 19, 2022, emergency measures changed the outcome of V3 withdrawals: V3 withdrawals could still proceed, but no longer provided BNT compensation for a pool shortfall, and users withdrew their pro rata TKN share of the pool vault balance corresponding to their pool token. Therefore, a historical cooldown period or vBNT requirement alone does not establish the amount actually withdrawable; before withdrawing, the result should be confirmed based on the state of the relevant contracts and the expected output.

Question 5

How did the emergency measures in June 2022 change deposits and withdrawals in Bancor V3?

Accepted Answer

On June 19, 2022, Bancor implemented an emergency pause on BNT minting associated with impermanent-loss protection and disabled deposits across the protocol. Under the earlier protection design, newly minted BNT would be used to compensate for a shortfall upon withdrawal; the emergency plan concluded that, when many withdrawals were pending alongside pool shortfalls, that compensation and its subsequent sale could create a further deteriorating cycle. The measures did not shut down V3 withdrawals entirely, but changed the settlement method: V3 users could withdraw the pro rata TKN share corresponding to their pool token from that pool's vault balance, but no longer received BNT compensation. In other words, a position's historical deposit amount, pool share, and ultimately withdrawable amount were no longer necessarily equal; where a vault balance was short relative to staked balances, pro rata settlement reflected that shortfall in the amount of TKN that could be withdrawn. This change also distinguished between versions: at that time, V2.1 withdrawals first needed to migrate to V3. It was an emergency measure adopted in response to specific stress and submitted for DAO ratification, and must not be conflated with the immediate impermanent-loss protection originally proposed for V3 or with the specific contract state of any pool at a later time.

Question 6

How does Bancor Vortex handle fees? Does it burn BNT?

Accepted Answer

Bancor Vortex is a value-capture policy approved by BancorDAO and executed using network fees; its direct burn target is vBNT, not BNT. A portion of swap fees from each pool first accumulates in the Network Fee Wallet, and when the VortexBurner contract is called externally, it can access the specified fee asset. In one trigger, the caller receives the lower of 10% (100,000 ppm) of the available fees or 100 BNT as an incentive; the remaining value is swapped through the network liquidity pool into vBNT, and that vBNT is then burned. The 10% rate and the 100 BNT cap can be adjusted by the DAO, while whether triggering is economical is also affected by swap slippage and on-chain Gas costs. Therefore, Vortex cannot simply be understood as reducing the total BNT supply. It processes fee value and burns vBNT; vBNT is in turn associated with the governance and historical withdrawal mechanism of BNT positions. This mechanism itself does not guarantee the price of BNT, returns, or the withdrawal outcome of any individual position.

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