TL;DR
- Carbon DeFi – A redesigned DEX model focusing on “recurring strategies” instead of continuous pools.
- Recurring Strategy Mechanism – Lets traders set buy/sell ranges that repeat automatically, removing the need for constant manual rebalancing.
- User Control – Instead of passively providing liquidity, users manage strategies like programmable limit orders.
- Efficiency & Costs – Optimizes capital use, reduces impermanent loss, and avoids wasted liquidity compared to old AMM designs.
- Impact on DeFi – Positions Bancor as a renewed player offering long-term strategy tools rather than short-term yield farming.
Since its launch in 2017, Bancor has been a pioneer in decentralized finance (DeFi). It introduced some of the earliest innovations in the space, such as bonding curves, liquidity pool tokens, and automated market makers (AMMs)-concepts that have since become the backbone of DeFi protocols across the industry.
Today, Bancor is once again at the frontier of DeFi innovation with its latest ecosystem project, Carbon DeFi. Unlike conventional decentralized exchanges (DEXs), Carbon DeFi is designed as a platform that allows users to create automated trading strategies on-chain with greater precision, flexibility, and protection from predatory tactics. At the heart of this evolution lies Bancor's recurring strategy - a groundbreaking way to automate the timeless principle of "buy low, sell high." By combining limit orders, range orders, and smart automation, Carbon DeFi's recurring strategies enable users to trade continuously without emotion, bots, or constant monitoring.
This article takes a deep dive into Bancor's recurring strategy, how it works, why it matters, and how it could change the future of automated trading.
What Is Carbon DeFi?
Carbon DeFi is a sophisticated on-chain trading protocol developed within the Bancor ecosystem. It blends the features of a DEX with the automation of a trading bot, allowing users to design and deploy custom strategies that run directly on the blockchain.
At its core, Carbon DeFi supports two main order types:
- Limit orders - where a user sets a target price for buying or selling.
- Range orders - where trades are executed within a specified price range.
These can then be combined into recurring strategies, which continuously execute buy and sell orders as the market moves. In addition, Carbon integrates with Bancor's Arb Fast Lane protocol, which ensures traders can easily connect with various on-chain marketplaces to capitalize on arbitrage opportunities.
What Does "Recurring Strategy" Mean?
A recurring strategy is essentially an automated plan that allows a user to:
- Buy a token when its price falls below a certain threshold.
- Automatically sell the same token when its price rises above a set target.
- Rotate the proceeds back into the original order, creating a cycle.
Think of it as a self-operating trading assistant that executes a continuous "buy low, sell high" loop. Unlike human traders, who are often influenced by emotions, fatigue, or missed opportunities, recurring strategies keep running around the clock with precision and consistency.
As trader Ξth P⟠rtisan (@deanrey3) highlighted on Twitter:
This automation not only improves efficiency but also eliminates common pitfalls like panic selling or fear of missing out (FOMO).
How Recurring Strategies Work on Carbon DeFi
Carbon DeFi's recurring orders are designed to mimic sophisticated trading bots but are executed natively on-chain.
Here's how the process works step by step:
1. Create Linked Orders
A user sets two linked orders: one to buy low and one to sell high.
2. Automatic Fund Rotation
When one order is executed, the acquired tokens automatically rotate to fund the opposite order.
3. Cycle Repeats
The cycle repeats as long as market conditions meet the defined ranges.
This system allows users to capture profit from market volatility without needing to constantly monitor charts.
As Bancor explains:
Why Is This Different From Traditional AMMs?
Most AMMs (like Uniswap or Curve) rely on passive liquidity pools where users deposit assets and earn fees. While effective, these systems don't offer fine-grained control over trading strategies.
Carbon DeFi is different because:
- It allows custom spreads between buy and sell orders.
- Orders are irreversible once executed (ensuring finality).
- Trades are protected from MEV sandwich attacks (a common exploit in DeFi).
- Strategies are directly adjustable on-chain with ease.
As well-known trader Andy (@ayyyeandy) pointed out:
In short, Carbon DeFi's recurring strategies give users more control and security compared to traditional liquidity provision models.
Features That Power Recurring Strategies
Carbon DeFi introduces several unique features that support recurring strategies:
1. Concentrated Liquidity 2.0
Unlike earlier AMMs, Carbon DeFi's liquidity is fully customizable, with features such as:
- Auto-compounding
- Custom fee tiers
- Zero tick constraints
This ensures strategies are capital efficient and adaptable to user needs.
2. Zero Trading Fees for Makers
Makers (users who provide liquidity or set strategies) enjoy zero fees, making recurring strategies more profitable.
3. MEV Resistance
All orders are deliberately resistant to sandwich attacks, protecting users from predatory trading practices.
4. Flexibility and Adjustability
Users can easily adjust their price ranges and parameters directly on-chain without canceling or recreating orders.
Why Traders Choose Recurring Strategies
Recurring strategies appeal to both retail traders and professional market participants for several reasons:
- Emotion-Free Trading - Automation removes human biases.
- Passive Income Opportunity - Capture value from volatility without active management.
- Accessibility - No need for off-chain bots or complex coding.
- Transparency - Strategies are fully visible and executed on-chain.
In simple terms, recurring strategies allow everyday DeFi users to trade like professionals without needing the expertise or infrastructure of hedge funds or prop traders.
Real-World Use Cases of Recurring Strategies
- Volatile Assets - Perfect for tokens like ETH or BTC, where price swings create recurring buy/sell opportunities.
- Stablecoin Arbitrage - Trade between slightly misaligned stablecoin pairs.
- Long-Term Accumulation - Gradually buy into a token at low prices while taking profits during rallies.
These strategies democratize trading techniques once only available through sophisticated trading bots or institutions.
Challenges and Risks
While recurring strategies offer powerful tools, they also come with challenges:
- Market Dependency - Success depends on volatility. Flat markets may yield little profit.
- Execution Risk - Poorly set ranges can lock users into losing positions.
- Liquidity Fragmentation - Too many custom strategies could spread liquidity thin across pairs.
- Regulatory Landscape - As DeFi evolves, automated strategies may face scrutiny in some jurisdictions.
These risks highlight the need for education and responsible use, especially for retail traders.
The Future of Automated Trading with Bancor
The introduction of recurring strategies represents more than just another trading tool-it's a vision for how DeFi can evolve.
- For users, it makes professional-grade automation accessible.
- For DeFi, it increases liquidity, efficiency, and resilience.
- For Bancor, it cements its role as a long-term innovator in decentralized finance.
By enabling strategies that are transparent, automated, and secure, Carbon DeFi could set the standard for the next wave of decentralized exchanges.
Conclusion
Bancor's recurring strategy is more than just a trading mechanism-it's a philosophy of automation and accessibility. With Carbon DeFi, users are empowered to build sophisticated trading strategies directly on-chain, free from the pitfalls of emotion, manual oversight, and unfair market manipulation.
As DeFi continues to mature, recurring strategies could play a central role in helping traders of all levels capture value, manage risk, and participate in markets more effectively.
