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Investing in Bancor – Everything You Need to Know

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What is Bancor (BNT)?

Established in 2016, Bancor, an on-chain liquidity protocol enabling automated, decentralized exchange on Ethereum blockchain, was founded by Eyal Hertzog, Galia Benartzi, Guy Ben-Artzi, and Yudi Levi. Headquartered in Zug, Switzerland, Bancor protocol is a trademarked system for Smart Token creation. Smart tokens are cryptocurrencies that have built-in convertibility directly through their smart contracts. 

Bancor has so far raised total funding of $152.30 million from six investors. These investors include KR1, Crypto Chan, Alexis Berthoud, Tim Draper, Blockchain Capital, and ICONIZ. Total Liquidity in the Bancor Protocol has nearly reached the mark of $2.2 Billion. 

What Problem Does Bancor Solve?

#1. The issue of double coincidence of wants arises when there is no medium of exchange. Thankfully, in our modern society, money functions as a valid medium of exchange. If it was not the case, any buyer would have to search for a seller who also wanted to buy the same goods which the buyer offered for exchange. Bancor aims at solving this double coincidence of wants problem in the world of cryptocurrencies. 

The company caters to the need for a Smart Token standard that can link all the cryptocurrencies together into an autonomous and decentralized liquidity network. While Bancor enables the seamless conversion of tokens used in the network – removing the need for an exchange or third-party platform, BNT, the protocol’s main token, acts as the default for all smart tokens created on the network. Many token projects of successful blockchain companies have joined the protocol. These companies include Power Ledger, WAX Token, SENSE, etc. 

#2. Another crucial problem that Bancor attempts to fix is the liquidity challenge for cryptocurrencies. Bancor enables continuous, automated, and formulaic convertibility for integrated tokens. Since the smart tokens of the Bancor protocol hold one or multiple tokens in a connector balance on-chain, anyone can instantly buy or sell a Smart Token in exchange for any of its connector tokens. 

The Product Development Process at Bancor

Like any other network, for instance, ETH, STX, GNO, Bancor also starts with nodes. Banco took its first step on June 12, 2017, through a token generation event. A week later, Bancor took the next step by activating the BNT coins. It was the world’s first Bancor-compliant Smart Token. The third step was taken in late September 2017. It was when Bancor enabled a basic user interface allowing a larger audience of buyers and sellers to more easily convert BNT to and from ETH through a Web App. As the fourth step, Bancor integrated the first additional tokens into the liquidity network using the open-source Bancor Protocol.

Bancor Products

Bancor Trading

Bancor trading on the Bancor Network allows swap between tokens. The Bancor Smart Wallet supports all ERC20 compliant tokens and EOS tokens. The trading facility on Bancor is fast and secure. It conducts the trades at the best prices and does not require any sign-up or registration. It is an open financial marketplace with no barriers to entry, and users do not require permission to use the open-source protocol. Bancor trading also helps manage a user’s protected positions in Bancor pools and track and analyze the user’s returns. 

Bancor Pools

Bancor pools have total liquidity nearing the volume of $2.2 billion. The percentage of BNT staked in these pools is 76.93%. Leveraging Bancor pools, you can stake tokens to earn fees and rewards with impermanent loss protection. There are several pools available on the Bancor Network. The ETH/BNT pool, for instance, has a fee of 0.10% and offers more than 60% returns on BNT and more than 7% return on ETH. The USDC pool has a fee of 0.20% and offers 56.94% on rewards on BNT and 51.17% return on BNT. The USDT pool also has a fee of 0.20%, while it offers rewards at 65.53% and 72.08% of BNT. The fee implies the percentage deducted from each swap and re-deposited in the pool.

Bancor Data

With the help of Dune analytics, Bancor offers volume, trading, and market performance data. You can see the daily volume by token, the monthly Bancor volume in USD, the pool balances by token, the liquidity stakes ranked by size, and details on BNT supply. You will also get details on Bancor’s unique protected positions and unique protected wallets. It will also equip you with details on graphical presentations of BNT rewards such as BNT liquidity rewards re-staked and liquidity rewards claimed. 

Bancor Token

The native token of the Bancor Network Token is BNT. It serves as the default for all smart tokens created on the network. In 2017, Bancor managed to raise more than $144 million worth of funds through its ICO. Apart from BNT, Bancor supports the liquidation of other tokens as well. However, it is on the condition that the tokens should comply with the ERC-20 or EOS standards. 

The Bancor ecosystem is supportive of a two-way token model. The liquid tokens and the relay tokens. A liquid token is an automated token with a single reserve. It mints and destroys itself. To mint or destroy, the protocol either sends the reserve token to its smart contract or removes it from the smart contract. If a liquid token wants to leverage the Bancor protocol, it must’ve its reserve token either in BNT or a derivative of BNT. 

The relay tokens provide liquidity by staking. The holders get a percentage of the future earnings. The volume of relay tokens is indicative of the amount staked to the total value in the pool. 

With the BNT tokens, a user can contribute liquidity to a pool. The liquidity providers qualify to get rewards for trades passing through the pool. They receive pool tokens representing a percentage of their stake. The total supply of BNT tokens is more than 178 million. The token attained its all-time high of $10.00 on January 13, 2018, and an all-time low of $0.1174 on March 13, 2020.  

How to Buy Bancor (BNT)

Bancor (BNT) is available on the following exchanges:

BinanceBest for Australia, Canada, Singapore, UK and most of the world. USA residents are prohibited from purchasing BNT here. Use Discount Code: EE59L0QP for 10% cashback off all trading fees. 

Gate.io is the best option for USA residents.

How to Store Bancor (BNT)

If you seek to make a major investment in Bancor (BNT) or if you are planning on HODLing this crypto for long periods of time, a hardware wallet is the best option. Hardware wallets keep your crypto stored offline in “cold storage.” This strategy makes it impossible for online threats to access your holdings. The Ledger Nano S or the more advanced Ledger Nano X both support Balance (BNT).

Bancor Network- Empowering a Barrierless Marketplace 

As a liquidity protocol that you can implement on any smart-contract-enabled blockchain, Bancor resolves multiple challenges facing liquidity providers (LPs) on AMMs. One of these challenging concerns is involuntary token exposure, as most of the AMMs require LPs to contribute liquidity to both assets in a pool, even if they hold only one. The challenge of impermanent loss arises when the liquidity providers become subjects to value loss when the prices of pool assets diverge. 

Solving these challenges Bancor has gained substantial traction in the decentralized marketplace. It has facilitated over $2 billion worth of trades involving several tokens, as well as cross-chain tokens. The BNT token stakers have earned their fair share from the millions of dollars the network has made through staking. 

Owing to these advantages, Bancor grew very fast after its launch. However, since January 2018, the price of BNT has started to fall. BNT’s price went through a prolonged lull between December 2018 and May 2020 when its price never managed to cross the mark of US$1. From mid-2020, the growth of the decentralized economy fueled Bancor to grow again. At present, its price hovers over $7.00. 

As the market of cryptocurrencies and the digital asset economy seemingly takes a turn towards sustained growth, Bancor will gain even further share in the market.

Gaurav started trading cryptocurrencies in 2017 and has fallen in love with the crypto space ever since. His interest in everything crypto turned him into a writer specializing in cryptocurrencies and blockchain. Soon he found himself working with crypto companies and media outlets. He is also a big-time Batman fan.

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