Guys, in your opinion which is the safest possible way to store the Bancor tokens long term?
Well the safest possible way to store any cryptocurrency is a hardware wallet. Or a paper wallet. |
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Can someone explain whether this goes beyond multi-way exchanges?
Eg, let's say that I want to trade ether for nubits, and there is no one on the other side of the exchange. But there is someone who wants ether and will give up siacoin for it, and there is a third person who wants siacoin and will give up nubits. A 3-way exchange could be made. Additional multi-way exchanges (4-way, etc) could also be done, and all of these would effectively increase liquidity.
But I am getting the idea that the Bancor protocol goes beyond this, and will create reserve tokens even in the absence of any multi-way exchange? Is this right, or is Bancor simply facilitating multi-way exchanges?
So no one seems to understand how it works, but many people are eager to invest in it... Bancor is basically just a simplified exchange (with a bit of a social network built in). There's no bidding system, just a token with a price. It's meant to simplify token exchanges while increasing liquidity of less traded tokens (since there's no bidding system to wait on). It's the perfect system for someone who isn't a day-trader (someone who doesn't need all the charts/graphs for trend analysis). The only negative I can think of with Bancor is that it isn't decentralized (at least I don't think so?). So it's still possible for their entire system to crash/have downtime, and you can bet your ass they'll have arbitrage bots working full time in the background picking up any profits possible (between them and the main exchanges). Actually the system is fully decentralized |
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So in summary:
• 20% of your investment went into capitalising the asset you now hold
• 80% of your investment went into capitalising a private company in which you didn't get any shares
Like I say, that's just my understanding of the current equity balance of the ICO. I'm happy to be corrected if wrong.
I think the 20/80 rules only apply to the last 147K ETH that poured into the ICO that was above their intended 250K ETH cap. So I think the correct way to look at it is that (250+0.2*147)/397 = 70% of your donation went into capitalizing an asset you now hold. The remaining 30% went to an unplanned, "ex post facto" fund whose assets you now have no claim over. For the next 2 years this new fund will purchase tokens (at a price that gives zero profit to the public sellers) and give those tokens back to the Bancor Network that issued them. Bancor blog clearly states that 20% of raised ETH goes into reserve, which is ~80K. They crowd sold only 50% of BNT (~40M), the other 40M they gave to themselves. In the end, 80M of BNT is backed by 80K of ETH. At a price of 100 BNT per 1 ETH this means 10% reserve ratio. People, at lest learn times table before you invest into something. OK, let me zero in a little more considering your logic. They intended to take in 250K ETH, they ended up with 397K ETH. As you say, 20% of all ETH goes into reserve so we've got three pots now. In rounded numbers, (a) 0.2 * 397 = 79K ETH for the reserve; (b) 0.8 * 250 = 200K that actually "paid for" 39M BNT distributed to the public; and (c) 0.8 * (397-250) = 118K ETH that goes into an unexpected "post ex facto" fund to buy back public tokens at ICO price and give them to Bancor Network. So the proportion of your donation that actually bought BNT tokens for your own wallet was 200 / 397 = 50.4%. The other 49.6% of your donation went to buy tokens for the Bancor Network - some now in the reserve pool, the rest over the next 2 years during buyback. Final approximate ICO cost for a single purchased BNT token assuming $400 per ETH is thus 200,000 *400 / 39,000,000 = $2.05 per BNT. Bancor's loss of control on how and when to stop the ICO resulted in the percent of your donation actually purchasing tokens FOR YOU slip from the promised 80% to an actual 50.4%. Not a very well run ICO. This is not how that works. Of the 250k ETH we raised that was our soft cap, 10% goes to the BNT smart token's ETH reserves. The other 90% to the Bprotocol foundation to build the Bancor protocol. Of the ETH above the 250k (~146k ETH), 80% (~117k ETH) will be put into a smart contract that creates a 0.01 ETH/BNT buy wall, so that the price of BNT can't drop below crowdsale price unless all of this ETH is exhausted. The other 20% is added to the BNT smart contract's ETH reserves. This still leaves all BNT purchasers with 100% of the ETH they contributed going to buy the BNT they recieved. Not sure where you got a figure any smaller than that. That's not how crowdsales work. |
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Just as I thought. What you initially stated is patently false: "Well, 20% of your funds bought into it. The other 80% goes to capitalising the balance sheet of Bitcoin Suisse AG of which you receive no share, at least as far as I understand. Happy to be corrected on that if wrong." It isn't false. Money doesn't just disappear into thin air. It's "owned" at all times. If you currently own 20% of the book value of your investment (notwithstanding the correction made below), then somebody else "owns" the other 80%. It is therefore currently sitting on the balance sheet of a private corporate entity which I presume to be the ICO issuer. I'm also assuming it's manifesting as an asset, not a liability, otherwise you'd be waving share certificates at me in your response instead of empty rebuttals. I think the 20/80 rules only apply to the last 147K ETH that poured into the ICO that was above their intended 250K ETH cap. So I think the correct way to look at it is that (250+0.2*147)/397 = 70% of your donation went into capitalizing an asset you now hold. The remaining 30% went to an unplanned, "ex post facto" fund whose assets you now have no claim over. For the next 2 years this new fund will purchase tokens (at a price that gives zero profit to the public sellers) and give those tokens back to the Bancor Network that issued them. Could well be that I have the aggregate ratios wrong. Thanks for the clarification ! Do you know that smart contracts can be the ones owing money? 80% of funds raised above the 250k ETH are being put into a smart contract that no humans have access to. |
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I just found out about Bancor yesterday. Could someone tell me how Supply is derived in the following formula?
Price = Balance / (Supply x CRR)
Supply is the amount of X token in the smart token reserves at the time of transaction. |
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"80% goes to capitalising the balance sheet of Bitcoin Suisse AG of which you receive no share" - How did you come to this conclusion? Please explain and state your sources.
My source is here: https://bancor.network/fundraiserOnly 20% of your investment goes into the token reserve. That's what you now hold (20% of what you originally put in at opening book value). So you've effectively paid an 80% premium on your Ether for it to be turned into BNT tokens. The other 80% of what you put in (approx $120 Million) now sits on the balance sheet of the ICO issuer either explicitly (in the form of fiat balances at bank) or implicitly (in the form of crypto currency holdings). Investors no longer have any stake in this part. As I understand it, the issuer is Bitcoin Suisse AG but have not looked too much into the corporate structures behind the issue so could be wrong. So in summary: • 20% of your investment went into capitalising the asset you now hold • 80% of your investment went into capitalising a private company in which you didn't get any shares Like I say, that's just my understanding of the current equity balance of the ICO. I'm happy to be corrected if wrong. Incorrect. 80% of the ETH raised above 250k goes to a smart contract that will buy BNT whenever the price is at 0.01 ETH/BNT. After 2 years the remaining ETH will be accessible to us. 20% goes to the BNT smart token contract's ETH reserves. None of it goes to any private company. Bitcoinsuisse isn't involved in any way. |
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Comparing Bancor and The DAO isn't valid. They don't represent the same potential risk to the network.
See, The DAO held ~9.8% of the market cap of ETH at the time, while Bancor holds ~0.39% of the market cap of ETH at the time of me writing this.
So if the worse were to happen, and Bancor's ETH were to get drained (an outcome we've obviously done and are now re-doing to ensure doesn't happen), it wouldn't put the Ethereum Network at risk like The DAO hack did.
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The value of the BNT after ICO will depend on three main unknowns:
- How much BNT will be required as reserve for smart tokens created through the Bancor platform before the monthly fee is waived
- How high the monthly fee will be for smart tokens created using the Bancor platform
- How the CRR of the BNT will be changed after the ICO
And of course general adoption but that is anybody's guess right now anyway.
What monthly fee? Bancor will require a monthly fee for users that opt out of BNT as a reserve in their smart tokens. Details unclear as of now. Where do yo get that? Eyal mention about fee, never heard him saying monthly fee. And razaberry is one of the team. Yeah, there's no fee like that. |
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Will Bancor have a separate wallet for distribution? or will we need to provide an Eth address?  The BNT will be sent to the address you sent the ETH from. |
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Hey dev, a few questions for the fundraiser, 1. When participating in the fundraiser, would 'MyEtherWallet CX' work or do I have to have full block synced like 'mist'? 2. It seems like there is one public ETH address on the website that you collect all the fund.. How do you give the right amount of token to the right person? (perhaps, I'm just too familiar with a dashboard style) Thanks  1) MyEtherWallet works 2) The smart contract sends BNT to the address the ETH came from |
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The value of the BNT after ICO will depend on three main unknowns:
- How much BNT will be required as reserve for smart tokens created through the Bancor platform before the monthly fee is waived
- How high the monthly fee will be for smart tokens created using the Bancor platform
- How the CRR of the BNT will be changed after the ICO
And of course general adoption but that is anybody's guess right now anyway.
What monthly fee? |
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I can hardly believe this thread has only a few pages... Surely Bancor is a very hyped product/platform! As a student of Anthropology and Developmental Sociology, I am excited about what this might mean for certain underprivileged communities!
Elaborate? I'd love to hear your thoughts on potential use cases. |
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Apologies if this has been asked before but can someone please clarify one point for me, is the currency for exchange always Ethereum?
In examples Ethereum is used and it is said that this will be deployed on the Ethereum network. If it is just Ethereum to start with will it expand to other networks later?
It will expand to other networks in the future. ETH will always be the reserve currency of BNT, and therefore BNT will always be liquidatable for ETH. |
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As we all know BAT has had some problems during their ICO process that involved "burning" insane amounts of gas in order to participate. How will it work with Bancor? Is there a calculator that shows how much gas I'll need in order to participate? Or does this depend on the amount of participants?
Well the Bancor ICO will be uncapped for the first hour, so there will be no need to burn insane amounts of gas to get in. |
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What is the best Wallet to hold the Bancor coins? I'm currently using Exodus, but I don't think I can hold BNC in Exodus?
We'd recommend MEW |
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I emailed Bitcoin Suisse to refund me all my ETH. I'm sure bancor can foot the bill for this.
Yes, we can. Email eddy@bancor.network with the details. |
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What I don't understand well is the price value of BNT when post ICO.
Right now, 1 BNT looks like it will be around $2.50 USD possibly closet to 3.00USD if ETH keep going up.
The part I don't understand is that if market cap reaches 500 million at ICO, hypothetically, then this will devalue my BNT? So 1 BNT could be worth a lot less than 2.50 USD after ICO due to more investors pumping more money? Someone explain this to me.
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