freelance tech writer, artist and community builder
“Staking liquidity essentially gives token holders a passive income, while bolstering the overall health of the decentralized network.” -Cryptoslate
If you’ve spent any amount of time in the crypto world, you’re well aware of staking. But did you know that you can now stake tokens on Bancor to help your favorite crypto projects and earn staking fees in the process? You can do so simply by buying Relay Tokens.
How Do I Stake on Bancor?
In order to stake, all you need to do is buy Relay Tokens and hold them in your wallet. You can find Relay Tokens by looking for the addition of ‘BNT’ to existing token names. For example, the Relay Token for PEOS is ‘BNTPEOS’.
Buying Relay Tokens and leaving them in your wallet is the definition of staking on Bancor. You can sell your Relay Tokens at any time just like you would any other tokens on Bancor.
Relays allow all the tokens on Bancor to be easily converted to other tokens in a single transaction.
How Can I Earn Staking Fees?
You earn a portion of the staking fees whenever someone does a conversion that involves the Relay you just bought and are holding. The portion of the fees you earn is in proportion to the percentage of the Relay you own — for instance, contributing 20% of the Relay’s liquidity will entitle you to 20% of each conversion fee.
When you sell your Relay Tokens (for example, when I convert BNTPEOS into PEOS), you know the cumulative amount of staking fees you earned. Keep in mind you can sell your Relay Tokens at any time. There’s no time limit.
But also be advised that the price of tokens in the Relay may change regardless of accumulated fees, thereby affecting the price of the Relay Tokens. The Bancor team has stated that new tools are coming soon which will allow the community to easily track these price movements and to help optimize Relay Token returns.
“You can think of a Relay as a balance scale with each side representing the total supply of one connector. The way to buy tokens from one side of the scale is by adding tokens to the other side. The Relay does not know what the market deems a fair price for each connector, it only knows that each side of the scale represents the same amount of value. For example, if we were to create a Relay named BNTENJ, where one connector has a balance of 1,000 ENJ tokens and another connector balance of 10,000 BNT tokens, the Relay will function with the value of 1 ENJ = 10 BNT. If someone tries to buy 1 ENJ from the Relay, they will need to send the Relay’s converter 10 BNT tokens. After that transaction occurs, the supply of the tokens in the relay changes, and now the Relay assumes that 999 ENJ = 10,010 BNT.”
You might be scratching your head right now and thinking, “But wait, I didn’t think Bancor took a fee for converting tokens?” You’re correct. Relays generate a liquidity provider fee with each conversion they process.
These fees act as an incentive to users providing liquidity on the network.
Now it’s time to buy and stake Relay Tokens on Bancor.
Below you will find two tutorials. The first tutorial explains how to buy and stake Relay Tokens for the Liquidapps project, BNTDAPP, using the native Bancor wallet. The second tutorial shows how to buy and stake PEOS Relay Tokens which are called BNTPEOS using the Scatter wallet.
Tutorial #1: Stake BNTDAPP Relay Tokens & Pay With ETH
Choose which token you want to PAY WITH from the first dropdown menu. Example: ETH
Choose what Relay Token you want to RECEIVE on the second dropdown menu. Example: BNTDAPP
Hit the button CONVERT.
You’re now staking on Bancor by purchasing and holding BNTDAPP Relay Tokens.
Tutorial #2: Stake BNTPEOS Relay Tokens & Pay With EOS Using Scatter
After buying your desired Relay Token, you’re now actively staking on Bancor, helping your favorite crypto project become more liquid, plus earning some fees from each conversion processed by the Relay. As this staking feature is new, I have not tested out the amount of earnings one can make with staking fees.
You can also use Etherscan to monitor the percentage of the Relay you currently own. See instructions for checking Etherscan in Bancor’s staking user guide.
Stay tuned to learn more about analytics tools to help you monitor and optimize your Relay Token holdings.
About The Bancor Protocol
Bancor is an on-chain liquidity protocol revolutionizing the way people create and share value by enabling constant convertibility between tokens. Conversions via Bancor Protocol are executed against on-chain liquidity pools using automated market makers to price and process transactions without order books or counterparties, allowing for faster, cheaper and more predictable conversions across 11,000+ ERC20 and EOS token pairs, including non-custodial conversions between blockchains.