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What is Bancor? (BNT)

The Beginner’s Guide


Bancor is a software that aims to incentivize users to lock crypto assets in pools in exchange for a share of the fees paid when they are bought and sold by traders.

In this way, Bancor is attempting to facilitate the operation of what’s called an automated market maker (AMM), an established mechanism designed to provide liquidity to markets, but without requiring a financial institution to manage it directly. 

Put simply, AMMs like Bancor are aiming to make more niche crypto asset markets more liquid by offering incentives for users to create and maintain pools of assets. 

Whenever a trade is executed on its platform, tokens are converted into BNT as an intermediate step. The liquidity providers who deposited the assets then generate a return from their funds as a percentage of the fees paid by traders. 

While this may sound similar to other popular DeFi platforms, like Balancer or Uniswap, Bancor is built to facilitate its service across both EOS and Ethereum. Further, more blockchains could be made compatible with its platform in the future. 

Bancor is also one of the more established AMMs, having launched in 2017 when platforms leveraging multiple cryptocurrencies were less common than they are today. 

Of note, the platform underwent a major overhaul in 2020. The latest version, Bancor V2, touts improvements for traders and users who lock up tokens on the platform. 

what is bancor bnt


Who Created Bancor?

Bancor was co-founded by Guy and Galia Benartzi, and notable investors in the project include Tim Draper, a partner in investment firm Draper Fisher Jurvetson. 

The project raised $153 million in a 2017 token sale managed by a Swiss non-profit called the Bprotocol Foundation. In total, funding was raised from nearly 11,000 investors, making it the largest sale of its kind at the time. 

Half the tokens were to be distributed to token sale participants, while the rest would be given to the founding team for various operating budgets and grant programs. 

More details can be found in the project’s official white paper.

Bancor是如何运行的 ?


为了使其AMM服务自动化,Bancor旨在激励用户将资产存入资金池中。 每个资金池是由一对代币和一个BNT加密货币储备组成的。 

当用户将硬币存入资金池中,用户会收到一个新的代币作为回报。这个代币被称为池代币,代币允许用户取回他们在协议中锁定的原始金额。

BNT代币是被用作为交易每个代币时的中介代币。 

值得注意的是,, Bancor允许用户在其中一个资金池中锁定一个代币(而不是一对)。例如,在其他AMM上,用户可能被要求按一定比例锁定一对的代币以便进入资金池中。

在Bancor上由ETH和DAI组成的资金池中,用户只能存入ETH或DAI。在Uniswap上,用户必须同时存入ETH和DAI。 

可是,用户也必须将BNT 存入任何一个Bancor资金池中。  

预言机 

您可能会问, Bancor如何确保流动性提供者能够为他们锁定在平台上的硬币获取正确的价格? 

Bancor V2声称通过一个被称为“预言机” 的解决方案来解决这个问题,该方案旨在将外部来源的价格传递到现有系统中。 

利用这项服务,Bancorn的资金池会自动调整代币相对于其价格的比例,从而使流动性提供者能够提取与他们存入相同价值的代币。 
 


Why Does BNT Have Value?

The BNT cryptocurrency is essential for facilitating trading between pools on Bancor.

Like other cryptocurrencies, Bancor’s BNT token has a fixed supply of 69 million tokens. Some 65 million tokens circulate freely on the markets, according to data provider Nomics

Perhaps the most compelling reason for BNT is that it allows Bancor to convert value between coins on different blockchains. Bancor is built on both Ethereum and EOS, meaning BNT can be deducted from pools composed of coins on both chains. 

BNT may also hold value because it is designed to track usage of the Bancor platform. 

This is because every pool on Bancor must hold BNT. As liquidity is added to Bancor pools, demand for BNT can be expected to grow.

Bancor also has plans to reward its liquidity providers with BNT tokens. While this has not gone into effect as of mid-2020, it could further motivate users to provide liquidity to Bancor pools. 

BNT holders may also be given the ability to vote on key parameters of the Bancor system, though such a system has not been implemented. 


Why Should I Use BNT?

BNT may be of interest if you believe platforms that allow crypto users to make markets and facilitate trading will continue to flourish. 

It may also be attractive if you believe a platform that works across multiple blockchains may be more robust than offerings built only on a single blockchain. 

Investors may want to consider buying BNT if they want to take part in setting the rules of the Bancor platform, thus gaining greater control over their holdings.

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