Bancor is a decentralized liquidity network that allows you to convert any Ethereum token to any other token on the network, without a counterparty, at an automatically calculated price, using a simple web wallet. Bancor aims to make market entry easier, making possible the emergence of a large number of user-generated currencies.
The Bancor Protocol allows tokens to be converted without needing to match two parties with opposite goals. The system balances the buys and sells using mathematical programming in such a way that every token on the network has a formulaic relationship to every other. As a result, there is continuous liquidity on the exchange regardless of exchange listings or trade volume. It allows you to:
Convert tokens directly on-chain
With no counterparty, there is no counterparty risk
All tokens are welcome, big and small
Formulaic price stability
Predictable price slippage
Adjustable "Connector", adjustable liquidity
Buy/Sell at same price, no spread
The Bancor protocol is the standard for the type of cryptocurrency known as “Smart Tokens.” Smart tokens are capable of holding one or more types of token as a permanent reserve balance that provides a mechanism for continuous liquidity and automatic price discovery. Smart Tokens are autonomously and continuously convertible to each other at algorithmically calculated rates. The protocol standardizes the use of a “connector token,” held as a balance in the Smart Token’s smart contract, and used as a variable in the protocol’s price setting formula.
The Genesis Smart Token to be used as the native currency in the BANCOR network is called the Bancor Network Token (BNT). The BNT holds a reserve in Ether. According to their website, 39.6M BNT were allocated through the BNT Fundraiser out of the total 79.3M Total BNT Supply. The fundraiser yielded 396,720 ETH Raised on June 12th, 2017.
Smart Tokens issued within the network will use BNT as reserve, though they may also hold other types of reserve tokens. This enables that appreciation of any of the network’s Smart Tokens results in appreciation of the value of BNT; this, in turn, being positive for all other Smart Tokens in the network, increasing the value of their reserve balance.
BNT will also be the reserve used by the Token changers that constitute this decentralized exchange network. A BNT changer functions as a Smart Token that holds a 50% CRR reserve in BNT, and 50% CRR reserve in some other ERC 20 token. This allows users to conveniently exchange between the two by buying these Smart Tokens with one of the reserve tokens and selling them for the other, with the addition of more supported tokens in the future.
What Can You Do With a Bancor Wallet?
Your Bancor Network Wallet can hold all of your Ethereum tokens, discover new ones, and instantly convert them to any other token in the network at a mathematically calculated rate. No exchanges, no counterparties. The wallet service offers you:
No Spread: Buy and sell at the same price, thanks to a non-profit automated market maker.
Continuous Liquidity: Convert any token at any time regardless of buyers and sellers or trade volume.
No Counterparty Risk: Convert tokens directly with a smart contract, no exchanges needed.
No Registration Required: Convert any Ethereum token to another directly on-chain via your Web3 compatible wallet.
Predictable Price Slippage: The Bancor Formula incorporates transaction size and needs no order book, so prices are transparent.
Backwards Compatibility: Any existing ERC20 token can integrate into the Bancor Network with no code changes or fees.
Integrated Tokens: Create or join a community of friends sharing common attitudes, interests, and goals where all activities in the group are operated with unique community coin and value.
Convert between ERC20 Tokens: Instantly convert any ERC20 token in the network to any other at a mathematically calculated, transparent price. Explore stats and use advanced preference settings to customize your trades.
Web3 Wallets: Bancor works with popular Web3 wallets so you can convert your tokens from wherever they are. The protocol and app continuously evolve to offer enhanced functionality, security and conversion settings as the network grows.