As Bancor’s vision grew, so did its technological innovations. In 2017, Bancor introduced Smart Tokens, now commonly referred to as LP (“Liquidity Provider” or “Liquidity Pool”) tokens. These tokens served a necessary account-keeping role in the system, enabling users to pool assets, provide liquidity in decentralized exchanges, and participate in the DeFi ecosystem.
By 2020, Bancor took liquidity provisioning to the next level with Amplified Liquidity, more commonly referred to as Concentrated Liquidity. This innovation allowed liquidity providers to concentrate their assets within specific price ranges, making liquidity provision more capital-efficient and effective. For stablecoins, in particular, this meant maintaining tighter control over their peg, ensuring greater stability and reliability in volatile markets.
