What is Bancor?
The Bancor Network is a cross chain cryptocurrency conversion platform that enables you to quickly convert Ethereum or EOS tokens without the need of a middleman or any other third party. Note the difference in terminology here: conversion platform. If we want to be technically correct then we do not refer to Bancor as an exchange, a DEX or an instant exchange per se, because their platform allows you to convert one crypto token to another cryptocurrency in a way that involves no buyers or sellers. Bancor was most likely inspired by a supranational currency (of the same name) outlined by economists John Keynes and E.F. Schumacher in 1944 to be used as an international balancing system.
BNT Token Explained
- How Bancor Protocol works?
- BNT Token Details
- Price Prediction 2020
- Final Thoughts: Liquidity Staking and BancorX
It is a great time to learn more about Bancor Network Token (BNT) and how their platform works, as they have announced an upcoming airdrop to BNT holders of one of their pool tokens: ETHBNT - which lets you earn fees from every ETH-based trade on Bancor.
How Bancor Protocol works?
In most decentralized exchange platforms (such as Saturn Network, Kyber or 0x) a trade needs another party to accept the buy or sell (fill the order) for the exchange to occur. And if the platform lacks liquidity, which most DEXs do, then you can be waiting days for your order to fill. Atomic Arbitrage can solve this issue by finding the missing liquidity on other DEXs, which is the main reason why we will be implementing this feature on our platform.
Bancor takes a very different approach for solving the liquidity problem, their platform makes use of smart contract logic to create a decentralized reserve - which they refer to as instant liquidity. This is done by deploying smart contracts which they use to create Smart Tokens. Maybe an easier way to look at Bancor is that instead of exchanging tokens with a trader, you are trading with a program. In this sense, Bancor offers you an environment to trade crypto which is transparent as the rates are calculated using a collection of formulas and algorithms. For example, there are no reserve managers setting rates, such as on Kyber Network. Token prices are dynamically adjusted
A smart contract tracks the balances of different tokens to ensure they are always balanced which is referred to as a Constant Reserve Ratio (CRR), ensuring that Bancor's reserves are never exhausted. You could think of it like an hourglass, no matter which way the sand is poured, it always contains the same amount of sand. If you would like to learn more, we have broken down the technical inner workings of Bancor in a previous article where we review various decentralized platforms.
BNT Token Details
- Project name: Bancor
- Symbol: BNT
- Standard: ERC20
- Current Price: 0.00177677ETH (~0.25$)
- All Time High: $10
- Total Supply: 67,738,799 BNT
- Circulating Supply: 63,129,903 BNT
- ROI since launch: -94.18%
- Website: https://bancor.network/
Price Prediction (BNT) 2020
The price of BNT recently has been trending upwards, albeit very slowly and it is far from a perfect upward rise with many price swings - though this is something many traders live off! We believe this positive trend will continue into 2020, as decentralized exchange protocols see more adoption and usage in the cryptocurrency ecosystem as a whole. Thus, BNT token can be seen as a great long-term investment to add to your crypto portfolio.
Bancor has also identified the market's current love of stablecoins being used in DeFi projects, as they have added support for stable liquidity pools by use of USDB - a stable token backed by their own BNT token. This should help adoption to see more users becoming liquidity providers, though the current frontends for this process are confusing. I believe this will improve throughout 2020 as Bancor has also launched a grants program and affiliate program, which are both aimed at attracting developers to implement Bancor into their applications.
Despite the good news, the overall volume and trading activity on ETH has been going down. This is not a great sign, so we will need to see Bancor turn this around for traders and investors to get behind a bullish outlook on BNT. That being said, the technology behind Bancor is very solid and they are making the correct moves to increase usage. I can see BNT trading in the range of $0.90 to $1.10 in the latter half of 2020.
Since August 2019, Bancor launched its long awaited staking liquidity feature. This allows users to store their assets in liquidity pools which are called Bancor Relays, and in return for providing liquidity to a Bancor pool, you receive pool tokens. As a pool token holder, you're entitled to a share of the fees generated by that pool. You can withdraw your share of the accumulated liquidity at any time by selling your pool tokens back to the contract. We are starting to see more third party Dapps offering ways to provide liquidity to Bancor, such as 1inch.exchange or cotrader. As we can see the ETH locked in Bancor has been rising rapidly, which is a positive sign that the protocol will continue to see growth. Though note this increase has also been increased by their planned January airdrop announcement.
With the launch of BancorX came the support for EOS also, which shows the team is fully capable of launching their protocol onto multiple blockchains in the future. As a result, if you believe in a multi blockchain future then betting on Bancor to play some part of that future sounds pretty safe.
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Please note Token Profile Articles are not endorsements by Team Saturn, the goal is to make it easier for you to learn more about the asset. Always do your own research before entering a trade or investing in any crypto project.