The Bancor Network (the native currency is the Bancor Network token) is one of the most well-known altcoin networks on the cryptocurrency market. In fact, the Bancor Network stands out among many other blockchains that specialize in dApps and token conversion. Over the past few years, the Bancor Network saw good times and bad times, as well. It used to be a real ICO success with a wide array of partners. An yet, there were also some legal issues and a widely covered hack attack.
In this review, we will give you all the necessary information about the Bancor Network and its BNT tokens to give you the idea behind it and whether or not investing in BNT tokens today is a great idea.
When did the Bancor Network start?
The Bancor company started back in 2016. It was founded by a group of Silicon Valley managers. The company’s name was borrowed from the concept of a balancing trade currency created by John Maynard Keynes. The company had a great start within the cryptocurrency community. One of Bancor network’s highlights is 2017’s world record of raising the total worth of $150 million in Etherum tokens in an extremely condensed time span of only three hours.
In the yearly 2020, Bancor airdropped its entire reserve of Ethereum tokens, which resulted in a massive liquidity pool change adding 60,000 liquidity providers. As a result, Bancor increased its liquidity during the next six months from $4 million to $17 million.
Today, the BNT network’s market cap is $1,249,384,778. Its trading volume is $167,411,648.
The Bancor Network is supervised by the Bancor Foundation Council that is located in Switzerland. The R&D dept. is based in Tel Aviv, Israel. The latter location is crucial since it allows the Bancor company to work on its presence in the Middle East region, where blockchain technology is only getting started.
What is BNT?
The Bancor Network is a blockchain protocol. Its key function is cryptocurrency conversion. Bancor users are able to convert multiple assets with no need for third-party currency conversion services. Technically speaking, the Bancor Network is a universal cryptocurrency exchange that allows you to convert between different cryptocurrencies in just one single click.
Another important thing to mention here is that the Bancor Network decentralized exchange also provides its own e-wallet service. With the Bancor Wallet, users can liquidate altcoins in just no time. Since there is no third-party cryptocurrency exchange involved, converting crypto coins with the Bancor protocol is a lot easier.
Bancor is famous for providing functional solutions in cryptocurrency conversion, which is almost impossible to do for centralized exchanges. With the Bancor Network, crypto coin transactions became as easy as one can possibly imagine.
The Bancor team managed to achieve their platform’s decentralized financial network status due to the use of the innovative Bancor coin known as the BNT token.
What is the Bancor network token (BNT token)?
Also known as Bancor Network Token (or BNT token), the Bancor Token is a digital currency that operates as a tool to connect a number of tokens supported by the Bancor decentralized network.
Its core function is operating as a hub token for cryptocurrency conversions within the BNT network. The BNT token is an ERC-20 type of digital currency that runs on the Ethereum platform. This means that one cannot mine BNT tokens.
You can use the Bancor Network token to exchange or buy other ERC-20 coins supported by the BNT trading platform, where you can use automatic conversions or liquify different tokens.
The Bancor Network tokens were developed using a special protocol that utilized digital currency conversion based on smart contracts that make third-party participants unnecessary. This principle is possible through the use of a reserved token that provides operations liquidity. Because of this aspect, another way to describe the Bancor network is to call it a decentralized liquidity network.
The BNT token developers admit that they were following Bitcoin ever since the currency was created. They felt inspired by the way the Blockchain worked and how organically it integrated into the Internet. The Bancor experts wanted to create a product that would expand the digital currency functionality and broaden the horizons. The BNT token developers gained experience working on different currencies, which allowed them to find a solution to the main liquidity problem – the Bancor protocol.
The Bancor protocol is based on a modern-day technique called “double coincidence of desires.” This means that one can make token conversions using smart contracts – the creation of smart markers that hold reserved tokens representing a number of currencies – altcoins, electronic money, and fiat currencies. This technology opens new cryptocurrency trading options.
The Bancor network tokens work with several smart contracts, the key ones being SmartToken and BancorChanger. SmartToken is a contract co-compatible with ERC-20. BancorChanger is used to implement the for changing coins and converting smart tokens into other currencies.
What is 1 Bancor’s (BNT) market price? With a Bancor (BNT) market capitalization of $1,249,384,778, the Bancor coin price is $6.37.
How Does the BNT Conversion Work?
This section will talk about how the Bancor decentralized exchange allows users to convert digital currencies.
Bancor decentralized finance network is one of the most user-friendly cryptocurrency exchanges out there. Thanks to the Bancor wallet, which is extremely easy to use, one can convert tokens in almost no time. In this matter, Bancor can be compared to its closest rival – Coinbase Pro network. Bancor managed to build an extremely intuitive user interface that makes for the best user experience in regards to currency conversion platforms. Even more, using Bancor is 100% safe since users are able to retain full control of their private keys and funds at all times.
The main advantage of the Bancor wallet service is that one can exchange tokens without the need for a third-party platform. This is a great feature that provides cross-chain conversion services without asking traders to expose their private keys.
Today, Bancor bases its cross-chain conversion partnering with EOS and Ethereum. However, the company has plans to add more bridges in the future. So it is quite possible that over time Bancor will function as a multi-chain liquidity service, including the exchange option for other blockchains like Bitcoin, Tron, and Ripple.
Bancor’s range of conversion is impressive. Users get zero trading fees, the ability to trade EOS and Ethereum instantly, etc. The Bancor pool pair options are also great, offering 8,700 token pairs. Compared to other cryptocurrency exchanges like Binance, with around 600 available token pairs, Bancor’s options are awe-inspiring.
BNT is an automated market maker or a liquidity provider. What that means is that the Bancor network and its BNT tokens add liquidity to cryptocurrencies. If there were no liquidity, crypto coins would die – because those coins could not be traded in any form.
And while trading volumes of BTC, ETH, XRP, LTC, and a number of other top cryptocurrencies are large enough to ensure their survival, there are other tokens and digital coins that are weaker. And this is where the Bancor protocol comes into play by bringing the technology to provide liquidity to any other token across all the cryptocurrency networks in an automatic decentralized manner. Bancor protocol helps any token to increase liquidity no matter what its trading volume is. This technology is fundamental in terms of the widespread adoption of decentralized applications (dApps). The reason is that many dApps use their own tokens and coins that are now can be converted with ease thanks to the protocol developed by the Bancor company.
The technology behind the Bancor protocol
Some might say that there are enough centralized exchange platforms that do quite the same as what the Bancor network offers, providing liquidity to digital coins. And if so, do we really need decentralized automated market makers like the Bancor network? The answer is yes, we do. The main reason for that is Bancor’s ability to provide an exchange where users don’t need any counterpart to make currency conversions.
Here’s how liquidity works: if you hold some sort of currency and want to exchange it for another currency, you will need to find someone willing to sell the desired currency to you in exchange for the currency you are selling according to the current exchange rate. So the main idea here is that there must be two sides dealing with each other in order for currency conversion to happen.
But it’s an altogether different thing when you want to convert altcoins through the Bancor network. Bancor provides the protocol that only needs one individual to trade tokens. The BNT’s smart tokens provide currency liquidity and ensure that реук is always a balance between traded coins. There is no need for third-party involvement. If you are a Bancor user and hold BNT, you are able to exchange ETH and EOS-related tokens at all times via the Bancor system.
To get a better idea of what Bancor smart token technology is like, you can picture an hourglass. You will see a closed system that is totally irrelevant to the way you choose to turn it. Just like it does not matter which way you turn the hourglass because it will not affect the number of sand particles inside. So in this allegory, the hourglass represents the BNT smart contract, and sand particles represent BNT smart tokens and the way they move during transactions.
Staking Reward System
The Bancor network has the plant to develop a special reward system for its users. According to the plans, users will be able to receive rewards for holding BNT tokens in existing Bancor liquidity pools. Users will get to vote through BancorDAO on the number of new smart tokens created and their distributive proportions as staking rewards between different liquidity pools.
Bancor hopes that such a reward system will increase the number of newcomers thanks to the Annual Percentage Rate generated by trading fees and staking rewards. However, one must keep in mind that financial losses that occurred during the staking period if a smart token loses its USD value will not be compensated because the generated staking reward will not be enough to regain the losses.
The Advantages of the Bancor Network
Here is the list of Bancor’s strongest features:
1. Bancor provides unlimited liquidity
This means that BTN’s smart token system offers tokens that are available for purchases and liquidation via smart contracts for everyone.
2. Bancor provides backward compatibility
Functioning of the Bancor protocol ensures the liquidity and asynchronous determination of the value of any coin that meets the ERC-20 standards.
3. There is no spread in the Bancor network
A currency will have an equal value during any operations thanks to the smart-token-calculated coin cost.
4. The Bancor network is 100% secure
There is no third-party involvement during a transaction.
5. BNT offers reduced volatility
The characteristics and properties of smart tokens provide control of volatile price movements.
6. Price slippage
This indicator is calculated, taking into account the size of the transaction, and is included in the current price.
7. Client-friendly fee policy
Bancor has zero deposit fees and low trading and withdrawal fees.
How to Use Bancor?
To be able to use Bancor’s functions, you will need to register. To do that, visit the official website. The Bancor’s official site will let you:
- Keep track of what’s happening with the project
- Be up to date with the latest news
- Stay informed of the products updates and new releases
- Use supported altcoins
- Make transactions via BNT wallet
Please follow this link for more details on registration.
The Bancor token types
- With token-changers, you will be able to convert all sorts of ERC-20 tokens.
- This is another type of ERC-20 token that works with just a single token with the reserve of several coins. The economic balance is secured via the external market sync mechanism.
- These tokens are used through the application of the crowdfunding concept. Platform users can receive liquid tokens that have a market value.
- Each user is able to issue their own currency and launch the ICO while receiving a liquidity guarantee of their product from Bancor.
The Bancor Network is a perspective project that is yet to see its heyday. Its idea of smart tokens that will replace regular altcoins will potentially open new horizons for the digital economy through the abolishment of unnecessary mediators that sometimes tend to slow down (and sometimes even compromise) transactions. We believe that the Bancor project has a great future since its developer team continues to work and does not seem to lose its pace.
Is Bancor worth investing in?
BNT is a good choice for someone looking for a long-term investment option. It works great with popular coins, but as practice shows, Bancor is even better for lesser altcoins and tokens. Another feature that may attract users is a client-friendly fee policy that offers zero deposit fees and low trading/withdrawal fees.
Is Bancor exchange safe?
Bancor is deemed safe to use since this platform offers transactions with no third-party involvement. However, Bancor had its share of hack attacks. For instance, there was a breach that put almost $600,000 of user assets at risk back in January 2020. Although the problem was solved, there is still no guarantee that hack attacks will not occur in the future.
How does Bancor make money?
According to the Bancor company, there are two income sources:
- The company uses fund from crowd sale
- By building their own protocol, Bancor will be the first early BNT tech adopters.
Where to buy Bancor token?
BNT tokens are available for purchase on Coinbase and Changelly, with one BNT coin selling at around $6.5.