Read on Twitter
1/ Bancor Network's change to a 0.1% fee model has had some VERY interesting early results. I found that it's not useful to compare daily volume against itself. We need some reference points. A far more useful metric is market share of trades against the entire DEX market:
2/ Since Bancor's 1/9 change to a 0.1% fee model, Bancor is now capturing ~2x more market share daily volume than it was prior to the fee change. Great! https://duneanalytics.com/embeds/17341/35035/vpOqAKSKXx6TDwQY2fEqpUfXrnG1DCELZGf0u7uy
3/ The biggest change in daily market share volume is on the LINK pool. This makes sense, given that LINK is Bancor's largest ERC20 pool (other than BNT). Before the fee change, Bancor was capturing ~3-4% of all LINK trade USD volume, now it's at ~8%. https://duneanalytics.com/embeds/17351/35063/Njq6q6FSFUO4BrLr3xAT7pelfxxeiWNPxEUJqwuN
4/ Let's look at yesterday, a BIG trading volume day for LINK. Bancor captured ~8% of all LINK DEX trade volume, compared to ~44% for Uniswap and ~34% for Sushi.
5/ Swap trade volume should be driven by price slippage + fees. Smallest sum of those 2 should win a trade! Unfortunately, Bancor will suffer more slippage, due to less liquidity. Bancor's liquidity is ~18M for LINK, compared to ~35M for Uniswap, and ~42M for Sushi.
6/ The hope was the 0.1% fee change would help to offset Bancor's inferior price slippage due to lower liquidity. As we can see, Bancor is still losing trade volume to Uniswap and Sushiswap, even with the fee change.
7/ There's something deeper here. Look at the trade volume for LINK trades yesterday for the most popular DEX aggregator, 1inch.
8/ Their exported LINK trade volume by market share for yesterday has Bancor as the HIGHEST exported DEX for LINK trades to users, at ~31% of all volume, compared to ~23% @ UNI and ~26% @ Sushi https://duneanalytics.com/embeds/17349/35058/hLlCd7YSUCCFTnN8uIderZLOAcnp8aFg9UrecJMC
9/ No one is saying the market is completely perfect, but wow. DEX traders that are solely using uniswap and sushiswap are missing out on the most efficient trade prices, because they are not using an aggregator and/or checking prices on Bancor.
10/ I think this shows that Bancor's next problem to solve isn't platform based. The platform is working... Bancor can now compete on price for a majority of trades on a pool with proper liquidity. No, Bancor's next problem to solve is a POPULARITY problem.
11/ I personally believe the popularity will come. Money speaks. This recent change is still VERY new. It will take a while for traders to realize Bancor now provides competitive pricing. As the pools continue to grow, aggregators will point to Bancor for a majority of trades.
