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This series features questions submitted by the Bancor community and answered by Bancor Project Lead, Dr. Mark Richardson, in a recent Q&A session.
Part 1, Carbon DeFi’s Execution Architecture and What Comes Next, focuses on execution architecture, intent-based systems, protocol upgrades, and how Carbon DeFi fits into an evolving wallet and AI-driven landscape.
Part 2, Carbon DeFi, Regulation, and the Future of Onchain Secondary Markets, focuses on regulation, tokenized real world assets (RWAs), market structure, and how Carbon DeFi operates within evolving policy frameworks.
Part 3 focuses on privacy, governance, institutional alignment, revenue direction, and what long-term success actually means for Bancor beyond surface-level metrics.
Q: As intent-based systems mature, when do you think users will realistically be able to opt into privacy for their onchain orders? And how important is that capability for Carbon’s long-term vision?
https://medium.com/media/f5d3c35bf97af41600af2b6588667c5d/href
Mark:
It’s a terrific question. So obviously privacy is an extremely important aspect to the emerging blockchain narrative.
Not just systems like COTI, although I do think COTI’s privacy preserving features are among the best.
But it’s not the only sort of privacy aligned blockchains. There are things that are looking at zk branded privacy and other sort of onchain, offchain hybrids to achieve privacy.
The thing you need to appreciate about an order book style pattern, which is what Carbon represents, an abstraction of an order book.
The issue is if you make the stuff people are creating orders with private, then there is no discoverability for those things.
So, for example, imagine we create a private eBay where we obfuscate who the seller is, what the item for sale is, and what its price is.
That would be sort of the privacy preserving garbled nature of using COTI’s features.
The issue there is if people are browsing eBay looking for things to buy, when they come across this mystery item, they don’t know what the item is, or how much it costs to buy it, let alone who they’re trading with.
And I don’t think that is going to work simply because the thesis behind Carbon is that you have to broadcast your advertisement. The prices and objects you are trading with need to be published to the blockchain and readable so people can discover them.
Where privacy becomes more important is, for example, people who might want to obfuscate the origin of the address whence that initial transaction came. So not necessarily the prices or the tokens that are being offered, but at least who is offering those tokens and at the prices they’re asking.
Similarly, people who are taking that market. So people who want to interact with Carbon, not as an order setter, but as the person who’s actually browsing the market looking to make a trade.
They may also want to obfuscate the fact that their address has participated in such and such a transaction.
And we’ve discussed with COTI that nothing about privacy should be conflated with criminal intent or anything else.
There are a million legitimate reasons why people might want to hide the kinds of actions they’re taking for purely legitimate reasons.
So I do think it’s important. The trick is going to be how to specifically decompose those elements of what Carbon offers, and compartmentalize the things that we might want to keep private from the things that we absolutely cannot keep private, because it effectively breaks the entire exchange mechanism. It is something I’m constantly thinking about.
There are even Carbon adjacent products. So rather than Carbon as users know it today, rather new features that we could add into that same sort of exchange category that can make use of especially the garbled circuits that COTI has, to achieve a different type of price discovery, a fundamentally different type of exchange primitive.
That’s the answer that I want to lean into.
Rather than retrofit an existing product that didn’t have information obfuscation as an assumption, it would be better to build a dedicated product that has that kind of information obfuscation at its core, in a meaningful sense.
So not just transaction obfuscation and identity preservation and that kind of thing, but a completely different kind of asynchronous market participation that actually requires people’s bids and asks to actually be hidden from view until the conclusion of the sale.
This leads very heavily into things like auction theory and other things.
There is a very compelling application for privacy and those kinds of products.
I don’t necessarily like the idea of retrofitting it directly into Carbon as is. In general, I don’t like retrofitting stuff.
I would prefer to build a product from the ground up with a specific feature or assumption as a part of the design process.
That is something that is in our future. I’m not sure exactly when it will be but some aspects of the privacy is more achievable than others.
I’m reluctant to commit to any hard deadlines simply because we have already an enormous product catalog in the pipeline that we need to get through. Privacy aspects are certainly featured inside that catalog. It’s just a question of prioritization.
Q: Bancor is increasingly an umbrella of products, not just Carbon DeFi, but also things like the Arb Fast Lane and other execution layer systems that operate on top of external protocols. Some of those protocols run incentive or rewards programs (not just fees, but points or tokens) to bootstrap activity.
Bancor aligned products may naturally accumulate those rewards through execution. From your perspective, would it make sense — or would you personally be open to — a DAO proposal that explores distributing some of those externally generated rewards to $BNT holders?
https://medium.com/media/80d41516d51350684683de9bf8f043c7/href
Mark:
I would be open to it. If there was ever a time where one of our implementations received a huge airdrop or something like that for use of a specific protocol, then that would actually cause a bit of a bureaucratic issue, I think for us. And we would have no choice but to bring it to the DAO. And if the DAO said that they wanted it distributed to $BNT holders, then absolutely that’s what we would do.
Q: By the end of 2026, what would success look like for Bancor that goes beyond traditional metrics like TVL or retail trading volume?
https://medium.com/media/a9192baacd05ce2d159f7bc54efddbc3/href
Mark:
I already don’t really care about TVL and trading volume as much as other people in a similar position to me might. That’s not to say I don’t care about them, obviously I do, but only insofar as they generate revenue for the vortex to to buy and burn $BNT with.
I don’t like these metrics because fundamentally they’re very good at misrepresenting the business case of a protocol.
I think by the end of 2026, what I would really like to see for Bancor, and especially for Carbon is specifically to have a well-defined group of businesses that have found in Carbon exactly what the doctor ordered in terms of running their project.
There are examples I can already point to that I have immense optimism about.
Things like Aureus, which were looking for an orderbook-style structure and weren’t satisfied with anything that they found in DeFi until they discovered what we offered, and are now running a fully regulated precious metals exchange, or are planning to run a fully regulated precious metals exchange using Bancor technology.
That’s the success metrics that I’m looking for.
The number of high profile, even low profile businesses that are now successful because they collaborated with Bancor.
That’s a much more meaningful success metric to me.
Q: How does Bancor think about explainability and auditability of execution outcomes in a more regulated environment, especially as institutions become more involved onchain?
https://medium.com/media/b40f27b12bda10505f3376367caa994a/href
Mark:
We take both of those things extremely seriously, but not because institutions become more involved. I would say that’s been a central tenet to all blockchain and DeFi developments since day one. Being able to interrogate a transaction path and understand how an outcome came to pass is and has always been of paramount importance, not just because people may need to report back to their regulator or their boss or something, but even just to understand if your protocol is operating correctly. The explainability and auditability of execution outcomes is 100% one of the utmost priorities for us.
But that’s not new. And it’s not because institutions are coming onchain. It’s because this is a basic responsibility of anyone who is developing a protocol.
Q: With everything Bancor is currently working on and all future developments, how much of the future generated revenue from the entire Bancor umbrella, and all associated new developments thereafter, will go towards bringing pools to surplus?
https://medium.com/media/624056af1ef9b11d84145e0c46efd0d7/href
Mark:
Yeah, easy to answer. 100% of the protocol revenue will always go to bringing the pools to surplus. That’s our North Star. That’s the only thing we care about.
These discussions are shaped directly by the Bancor community; thank you to everyone who submitted questions.
If there’s something you’d like addressed in a future Q&A, submit your question here: Bancor Community Q&A Submission Form
Read Part 1 and Part 2 in the series:
Part 1 — Carbon DeFi’s Execution Architecture and What Comes Next
Part 2 — Carbon DeFi, Regulation, and the Future of Onchain Secondary Markets
Bancor
Bancor is a pioneer in decentralized finance (DeFi), established in 2016. It invented the core technologies underpinning the majority of today’s automated market makers (AMMs) and continues to develop the foundational infrastructure critical to DeFi’s success — focusing on enhanced liquidity mechanics and robust onchain market operation. All products of Bancor are governed by the Bancor DAO.
Website | Blog | X/Twitter | Analytics | YouTube | Governance
Carbon DeFi
Carbon DeFi, Bancor’s flagship DEX, enables users to do everything possible on a traditional AMM — and more. This includes custom onchain limit and range orders, with the ability to combine orders into automated buy low, sell high strategies. It is powered by Bancor’s latest patented technologies: Asymmetric Liquidity and Adjustable Bonding Curves.
Website | X/Twitter | Analytics | Telegram
The Arb Fast Lane
DeFi’s most advanced arbitrage infrastructure powered by Marginal Price Optimization, a new method of optimal routing with unmatched computational efficiency.
Website | Research | Analytics
Carbon DeFi, Governance, Privacy, and Long-Term Alignment was originally published in Bancor on Medium, where people are continuing the conversation by highlighting and responding to this story.
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