We are delighted to announce that our Bancor proposal to have PHTR whitelisted for single-sided staking and impermanent loss protection has passed with a supermajority voting in favour. The BancorDAO has agreed to an initial trading liquidity limit of 100k BNT on the PHTR liquidity pool.
So what does this all mean and why is it good for PHTR holders?
Liquidity provision has a major and well documented drawback in the form of impermanent loss or more colloquially IL. IL occurs when a liquidity provider underperforms a simple buy and hold strategy.
This is because the liquidity pool is consistently rebalancing both tokens in the pool to ensure they have an equal value. This mechanism means that as the price of one token increases the liquidity pool is implicitly selling some of that token to balance the books. Over time, this can cause the cumulative value of your pooled tokens to be worth less than simply holding the assets in your wallet.
For long-term token holders this is an unattractive proposition as it means the quantity of tokens you hold will reduce as the token’s price increases. In addition, liquidity providers are forced to hold equal amounts of each asset in the pool, which often means selling some of your long-term holdings for another token.
With all that being said, liquidity provision is still an essential facet of a healthy token ecosystem. So what to do?
Introducing Bancor IL protection and single-sided staking for PHTR
PHTR token holders now get access to the following benefits on Bancor:
Provide liquidity with only PHTR and get all the benefits of liquidity provision without ever selling a single token.
100% IL protection
Get full impermanent loss protection and participate fully in PHTR’s upside.
Earn trading fees paid in PHTR.
These benefits culminate in PHTR token holders earning fees from liquidity provision (and other incentives to come..), participating fully in our future growth without any impermanent loss and helping to boost our on-chain liquidity.
The long game
Bancor is quickly becoming a prime destination for managing our DAO treasury assets. Phuture intends on deploying more PHTR from our treasury into our Bancor pool as it matures and the relevant governance proposals are passed. This offers several advantages that are not available elsewhere:
- Single-sided stalking removes the need to sell PHTR for other assets. This allows the composition of the treasury to remain intact, ensures the DAO participates fully in PHTR’s upside and avoids negatively affecting the market price.
- Impermanent loss protection ensures that the performance of the treasury’s pooled PHTR is identical to simply holding the assets in our multi-sig.
This results in a much more liquid market for PHTR whilst simultaneously allowing the treasury to earn yield on its idle assets.
Steps for staking PHTR single-sided on Bancor
- Go to app.bancor.network/pools and search for PHTR
- Enter and submit the amount of PHTR you would like to stake
- That’s it! You have now successfully staked your PHTR with impermanent loss protection and will begin earning fees.
- You can now track your earnings and realise profits via the Portfolio screen: app.bancor.network/portfolio
PHTR’s whitelisting on Bancor will significantly improve its on-chain liquidity, provide opportunities for token holders of all sizes to safely stake and earn fees on their tokens.