Bancor (BNT) is an on-chain liquidity protocol based on the Ethereum blockchain designed to enable automated and decentralized trading. Since its founding in 2016, Bancor has made significant achievements in the cryptocurrency world and solved multiple critical problems. This article will introduce in detail the background of Bancor, the problems it solves, its products, and the characteristics of its token BNT.
Bancor background
Bancor was founded by Eyal Hertzog, Galia Benartzi, Guy Ben-Artzi and Yudi Levi and is headquartered in Zug, Switzerland. The Bancor Protocol is a trademarked system for creating smart tokens that have built-in redemption through smart contracts. Bancor has raised $152.30 million in funding to date from six investors including KR1, Crypto Chan, Alexis Berthoud, Tim Draper, Blockchain Capital, and ICONIZ. Total liquidity on the Bancor protocol has reached nearly $220 million.
Problems solved by Bancor
1. The problem of double coincidence of demand: In the traditional economy, currency as a medium of exchange effectively solves the problem of double coincidence of demand. However, in the cryptocurrency world, this problem still exists. Bancor aims to solve this problem with a smart token standard that connects all cryptocurrencies into an autonomous and decentralized liquidity network. BNT serves as the default token for all smart tokens created on the network, enabling seamless conversion between tokens without the need for an exchange or third-party platform.
2. Liquidity Challenges: Liquidity challenges in the cryptocurrency market are another critical issue. Bancor supports continuous, automated and formulaic redemption of integrated tokens. Because the Bancor Protocol’s smart tokens hold one or more tokens in an on-chain connector balance, anyone can instantly buy or sell smart tokens in exchange for any connector token.
Bancor's products
Bancor Transactions: Transactions on the Bancor network allow for the exchange of tokens. Bancor Smart Wallet supports all ERC20 compatible tokens and EOS tokens. The trading facility is fast and secure, and trading at the best prices does not require any registration or licensing.
Bancor Pools: Total liquidity in Bancor pools is close to $220 million, and the proportion of BNT staked in these pools is 76.93%. With the Bancor Pool, you can earn fees and rewards by staking your tokens and gain protection against impermanent losses. Here are some example pools:
ETH/BNT Pool: Fees are 0.10%, BNT returns over 60%, ETH returns over 7%.
USDC Pool: Fees are 0.20%, offering 56.94% BNT rewards and 51.17% BNT returns.
USDT Pool: Fees are 0.20%, rewards are 65.53% and 72.08% of BNT respectively.
Bancor data:With the help of Dune Analytics, Bancor provides volume, transaction and market performance data. You can view details like daily trading volume by token, Bancor monthly trading volume in USD, pool balance by token, and more.
Bancor Token (BNT)
BNT is the native token of the Bancor network and serves as the default for all smart tokens created on the network. In 2017, Bancor raised more than $14.4 billion worth of capital through ICOs. Bancor supports liquidation of other ERC-20 or EOS compliant tokens.
Two-way token model: The Bancor ecosystem supports a two-way token model, including liquid tokens and relay tokens. Liquidity tokens are automated tokens with a single reserve that self-mint and self-destruct. Relay tokens provide liquidity through staking, with holders receiving a percentage of future earnings.
BNT Token Supply and Historical Price: The total supply of BNT tokens is over 178 million. The coin reached an all-time high of $10.00 on January 10, 2018, and reached an all-time low of $0.1174 on March 13, 2020.
Bancor Network - Empowering Accessible Markets
As a liquidity protocol that can be implemented on any blockchain that supports smart contracts, Bancor solves multiple challenges faced by liquidity providers (LPs) on AMMs. One of these challenges is involuntary token exposure, as most AMMs require LPs to provide liquidity for both assets in the pool, even if they only hold one asset. The challenge of impermanent loss arises when pool asset prices diverge and liquidity providers suffer a loss of value.
Solving these challenges, Bancor has gained significant traction in the decentralized market and has facilitated over $200 million worth of transactions.
To summarize: Bancor (BNT), as an innovative on-chain liquidity protocol, solves multiple challenges in the cryptocurrency market through its smart token standard and decentralized trading mechanism. As the market develops, Bancor will play an increasingly important role in the future of decentralized finance (DeFi).