BNT not too long ago suspended impermanent loss safety, inflicting customers lose 50% of their tokens offering single-sided liquidity to Bancor, and a few folks blame the phenomenon fully on the bear market, even saying “ That is occurring due to the bearish market This wouldn’t be an issue if the market was bullish” Nevertheless, the scary reality is that the hyperinflation of BNT doesn’t solely seem in bear markets, however even in bull markets.
We are able to analyze it rigorously from the BNT issuance system of impermanent loss safety:
Whereby P0 is the preliminary value and Pn is the present value;
When within the rising market, Pn>P0, then the vary of ILP (inflation charge %) is (0,100%)
When in a falling market, Pn<P0, then the vary of ILP(inflation charge %) is (0,+∞)
Right here, we depend the information from 2020/3/14–2021/5/9 in a bull market to estimate the theoretical inflation charge of BNT impermanent loss safety.
It may be seen from the desk that in this statistical interval, the theoretical improve of BNT is as excessive as 1914.69%. Such a excessive issuance charge has clearly reached the extent of hyperinflation. In fact, that is solely the theoretical anticipated worth after contemplating all fluctuations out there. Within the bull market, since some folks might all the time maintain, the inflation charge will probably be smaller than that of theoretically. Besides, it’s unsustainable for anyone venture with so excessive inflation charge.