The Bancor protocol is a standard for a new generation of cryptocurrencies called “smart tokens,” which can hold one or more tokens in reserve.
It is about easily creating, managing and trading tokens, currently, ERC20 tokens created on the Ethereum network, by increasing their liquidity and allowing them to have an automated market price.
Bancor already has a working front-end product which includes smart token creation and wallet, as well as community features like discussions, profiles and stats. The Bancor Network Token allocation event, happening today, will launch the project.
Bancor in a nutshell
The Bancor protocol enables built-in price discovery and a liquidity mechanism for tokens on smart contract Blockchains using an innovative reserve mechanism.
These “smart tokens” hold one or more other tokens in reserve and enable any party to instantly purchase or liquidate them directly through the smart contract, without any counterparty and without relying on exchanges.
Bancor creates relationships between the ever-increasing number tokens and allows conversion between them through a new kind of economic model which uses an algorithmically discovered price to balance buys and sells, keeping constant the ratio of reserve balances available. This reserve ratio is called a CRR and is user-configured.
What Bancor is really doing is creating a paradigm shift, by allowing any token to have liquidity and a market price from day one, which is something not possible on today’s financial exchanges.
Moreover, it is intended to support any token, whether it is a fiat currency (dollar), a cryptocurrency (Ethereum), a token issued in a crowdsale (Augur) or a token that represents physical assets (gold). Currently, this is possible through the increasingly popular “tokenization” of assets. In the future, the protocol will support additional Blockchains and currency types as well.
Bancor’s Network Token (BNT) is the unifying reserve token linking all network tokens together. It benefits from network effect as the more people use it as the reserve token for their smart tokens, the more value it captures, which in turn appreciates all the smart tokens holding it in reserve.
The company is also developing a partnership with
TokenCard, the first project issuing Visa debit cards based on ERC20 tokens, to allow smart tokens to be used wherever Visa debit cards are accepted.
A summary of the terms
The Bancor token (BNT) allocation event will begin on June 12, 14:00 GMT.
The fundraiser is held
here, and the white paper can be pulled from
here. The company has also made public its
development plan for the next two years.
Bancor has designed a unique token allocation model, from a desire to listen to the concerns and needs of its community. Therefore, we present below a summary of its special sale terms:
- 50/20/20/10 Token Distribution: 50 percent of BNT will be issued to the contributors in the fundraiser, 20 percent allocated to partnerships, community grants and public bounties, 20 percent to the foundation’s long-term operating budget, 10 percent to founders, team members, advisors and early contributors. Founders and team contributors will be subject to a three-year vesting schedule.
- Fixed Price: 0.01 ETH per 1 BNT (i.e. 100 BNT per 1 ETH).
- Hidden ETH Cap: revealed if 80 percent of the cap is reached.
- Duration: The fundraiser will run for 14 days or until the hidden cap is reached, with a one-hour minimum time.
- How minimum time works? Read this: https://goo.gl/1lL0NY.
- Token Availability: BNT for ETH contributions will be distributed immediately. The ability to transfer, purchase and liquidate BNT through the smart token’s contract will be enabled gradually during a time span estimated at seven days following the fundraiser closing.
- Security: Funds will be held using multi-signature wallets according to industry’s best practices.
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