xBNTa is an ERC20 wrapper for the BNT token and the Bancor Protocol staking and governance process. xBNTa is a set-and-forget token, requiring no active participation. Staking rewards are automatically reinvested in BNT, allowing investors to compound their BNT position. xBNTa holders participate in governance via the Buchanan Mandate, where voting decision-making/deliberation is anchored around the doctrine of center-right economist James Buchanan. Read more about Mandated Governance here.


Bancor v2.1 is a unique AMM offering in the decentralized finance space. Bancor's innovative mechanism allowing for provision of one-sided liquidity and impermanent loss insurance works via the use of BNT as a connector asset and as the contra asset of every pool. With v2.1, protocol governance has control over a few key levers. So far, these mainly concern 1) the conditions for whitelisting a token, 2) the conditions for approving and increasing a liquidity mining program for a token, and 3) the conditions for approving or increasing the coinvestment limit for a previously whitelisted token.

Because of the novel functionality of v2.1, participation in the Bancor governance process is of particular importance. The fund will have an opinionated voting strategy developed in accordance with the Buchanan Mandate, focused on the three discussion points above but extending to all matters of administration and governance.

The fund will apply the Buchanan Mandate by relying on the key, sometimes overlapping themes outlined on emergent choice, process architecture, automated preference, and limited scope.

Emergent choice

In applying the emergent choice theme for evaluating whitelisting initiatives, the fund will favor established tokens with demonstrated community and market demand. Buchanan is unlikely to vote in favor of whitelisting unproven or early stage projects. Additionally, the fund will look to support initiatives and deepen relationships with proven and longstanding community partners, such as in the case of the ENJ pool liquidity mining and coinvestment proposal.

When proposing to whitelist a new asset, mid to large market cap protocols with lower volatility and established teams will be considered more favorably. The Buchanan Mandate is informed by the realized actions of the market and would like to see broad, clearly defined support and real use as opposed to niche or specialized initiatives from narrow interests.

Process architecture

Bancor is blessed with a highly technical and deeply engaged community. In applying the process architecture theme, the fund will be open to initiatives sparking healthy debates around questions of meta-governance, i.e., the process of governance itself. A relevant example would be BIP3, which established two main goals with respect to the presentation of governance proposals and requirements for listing and approval. When evaluating these types of proposals, the fund will treat as orthodoxy the notion that each vote should be narrowly defined. Additionally, the fund will always be biased towards reasonable but strict processes. See automated preference and limited scope below for more.

Automated preference

In applying the automated preference theme, the fund will favor proposals that are as technically clean as possible. Even if a proposal fits within the mandate at a higher level, proposals that -- if passed -- would necessitate a greater degree of discretion in the hands of an administrator are likely to be opposed. The fund will generally seek more automated solutions. And, just as in the case of the process architecture theme, proposals that group multiple decision points into a single bloc will be opposed in favor of smaller, piecemeal solutions.

In the previously mentioned BIP3, a commentator pointed out that only certain parts of the proposal would be enforceable via code where other portions would not. While we respect and acknowledge that Bancor governance is an evolutionary stage and headed towards decentralization, the Buchanan Mandate will favor proposals that are as enforceable by code as possible.

Limited scope

One of the main pillars of Buchanan's work was his study of “distributed favor economies” (i.e., political settings where horse-trading and cronyism run rampant) in developed bureaucracies. An important plank of the BIP3 standard is that "a single BIP may propose multiple changes if and only if the entirety of the BIP is thematically consistent, and the proposed improvements are addressing the same issue." The fund will encourage voting to be kept to limited issues, enforcing a focused, consistent, and step-by-step governance approach. Additionally, the fund will seek to support proposals and a general governance system that limits administrative and bureaucratic power from developing into a separate entity of special interests in parallel to the daily users of the protocol.