[ANN] Bancor | Protocol for Smart-tokens, solving the liquidity problem

[vuvanle120]

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.

Somebody give this guy a medal....

Logic does not work in the crypto world. KISS if there is more demand than supply  the price will go up.

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[xiyuyoufeng]

Hey, sorry, somebody have the solution to log in???

I try all the day to connect myself via messenger...

internal error, internal error...

Have we a explain? i can't post my report ! Thanks all

If you joined less than a week ago it seems they won't let bounty participants claim any money despite accepting them into the program on the assumption they would get paid.

i join 8 days ago.

I have almost the same problem, I already join 11 days, but I don't see any bounty in my account? Could you help to check?

[Zechis966]

Logic does not work in the crypto world. KISS if there is more demand than supply  the price will go up.

even FOMO is fair logic when you look at what you already missed out on! I got offered to buy bitcoins at like $70 but the guy was a weird meth head who obviously used them for drugs, and I wanted nothing to do with him or whatever scam internet moneys he was screwing with...

I learned my mistake the first time, and got in on ETH at $7-12

But in any case you don't use logic when investing unless the market is being driven by logic.

FOMO may be solid logic (if you pick a winner) but obviously when moneys involved you want a little more guarantee, at least most do.

Since crypto investors currently aren't very logical with their millions and even billions some of them, I wont be logical when following some projects.

Theres a funny investment strategy some firm uses called the 'Costanza List' and it's basically every stock their logic tells them to not invest in....they have an average of 70% success with the Costanza picks...

(It's from Seinfeld where George Costanza one day is fed up with being a loser so he does everything the opposite of what his gut/mind would normally do, and everything works out perfectly for him!)


Lesson learned, if you have the money you can risk, then maybe allocate at least a small portion (10-20%) to ICOs/Projects that maybe seem too good to be true, or just stupid to you.

What seems stupid to one might be worth millions to another...

[chesthing]

Logic does not work in the crypto world. KISS if there is more demand than supply  the price will go up.

even FOMO is fair logic when you look at what you already missed out on! I got offered to buy bitcoins at like $70 but the guy was a weird meth head who obviously used them for drugs, and I wanted nothing to do with him or whatever scam internet moneys he was screwing with...

I learned my mistake the first time, and got in on ETH at $7-12

But in any case you don't use logic when investing unless the market is being driven by logic.

FOMO may be solid logic (if you pick a winner) but obviously when moneys involved you want a little more guarantee, at least most do.

Since crypto investors currently aren't very logical with their millions and even billions some of them, I wont be logical when following some projects.

Theres a funny investment strategy some firm uses called the 'Costanza List' and it's basically every stock their logic tells them to not invest in....they have an average of 70% success with the Costanza picks...

(It's from Seinfeld where George Costanza one day is fed up with being a loser so he does everything the opposite of what his gut/mind would normally do, and everything works out perfectly for him!)


Lesson learned, if you have the money you can risk, then maybe allocate at least a small portion (10-20%) to ICOs/Projects that maybe seem too good to be true, or just stupid to you.

What seems stupid to one might be worth millions to another...

Great post.

[nayanmehta]

Where we participate in ico?

[martinyin]

Where we participate in ico?

In the past.

[CuriousGeorge]

Blah blah blah from people who didn't have the nuts to buy into the ico.

Remember ethereum had uncapped ico at the time of ico. But in this time the ethereum already prove it with give a lot of the money for the ico investors. haters gonna hate. Remember iconomi has changed his rule in the middle of development. Those are shilling about his dividends become haters at the middle of the development after iconomi changed the rule of the game.


Crypto is pure about speculation.   

[capone1340]

https://hitbtc.com/exchange/BNT-to-BTC ?

[jlspartz]

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.

The math is spot on, and it matters a lot.  Now the bancor foundation will control almost half of their own currency.  I don't trust that people who were looking for roughly 20M and raised an extra 55M of self-controlled funds over night is going to do the right thing.  If it was initially stated that only half of the funds would be distributed to the investors, would you have bought in?

[Shahrul09]

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.

The math is spot on, and it matters a lot.  Now the bancor foundation will control almost half of their own currency.  I don't trust that people who were looking for roughly 20M and raised an extra 55M of self-controlled funds over night is going to do the right thing.  If it was initially stated that only half of the funds would be distributed to the investors, would you have bought in?

I think they mention the token allocation way earlier.
And at the fundriser page on official website at bottom they put the chart there. Lol
https://blog.bancor.network/bancor-network-token-bnt-contribution-token-creation-terms-48cc85a63812
https://bancor.network/fundraiser


And i think people that didnt read the whitepaper here need to know



Investor can also liquidate through the smart contract which will destroyed the BNT, thus decrease the number in circulation.(thus prevent the bancor team from handling and get large %of bnt )

One things need to be remained here, total number of BNT is unlimited,

'Smart tokens are issued when purchased and destroyed when liquidated, therefore it is always possible to purchase a smart token with its reserve token, as well as to liquidate a smart token to its reserve token, at the current price.'


Problem is this concept still new and ppl more used to exchanges.

[paulmaritz]

I will just start boldly. The Bancor business model is pretty close to a scam. I am sure you will not take my word for it, because this is my first post. In fact, I made this account because I find it bizarre that no one is talking about this. Let's be honest, which one of you truly tried to comprehend their mathematical proof? Not a single person who invested at least, because otherwise they would not have wasted their money. I will try to explain a little.

They collected pretty close to 400k ether. Essentially what they do, is keep .8*400k ETH = 320k ETH to themselves, and call the remaining 80k reserves. They will express this 80k in a different coin, called BNT. They assign 100 BNT to 1ETH that they received. That means there is 500BNT for every 1ETH in the reserves. Essentially, if everyone would want to convert their BNT back to ETH, they would get 1/500 ETH per BNT. Wait you say, in the white paper it says that the starting price of 100BNT will equal 1 ETH! This is true, this is where the mathematics uses a trick to hide what is going on. Their pricing formula, P=R/(S*F) ensures that the first BNT sold will be sold at a 'fair' value, namely equal to the amount of ETH you spent to buy it in the first place. After the first sell, things get worse rather quickly. Let's illustrate this by a little example:

Lets say that 10% of people who own BNT sell it back to ETH via the smart contract. For the initial price we get: P = 80k/(40m*.2) = 0.01. All looks fair. Then after the sell we get 40m*10%*0.01 = 40k,  P = 80k-40k/((40m-4m)*0.20) = 0,00556. Ouch, the price almost dropped to half value from the 10% sell-off (this is different if there are many small transactions but I will get to that later).

If people buy the same amount of BNT, this is what happens: P = 120k/(44m*0.20) = 0.01364. The increase in price is not nearly as interesting for the next person. But again, this will be lower for many small transactions.

I created a plot assuming transactions are made in small batches of BNT coins. We find that the BNT value drop VERY quickly when people start selling, and does not rise nearly as fast. Essentially this just makes BNT an undesirable coin. Another weird thing about their system is that it does not consider convexity. This means that big transactions will get very different prices than many small ones. This just does not make sense, but they don't care as they simply took your money.
http://imgur.com/a/f9yLy

If you are still not convinced, consider this. They literally admit to taking 80% of your money. All they give back is some mathematical trick based on 20% of the ether that you gave them. Do you really believe they just generated x5 value out of thin air? Sorry, but math does not work that way. I would recommend getting rid of your BNT asap, or you end up all the way on the left side of the graph. I am sorry that this news comes a bit late for some of you... I didn't read their methodology until last night Sad

Maybe now you can start to add up why the ICO was strange in various ways.

As final words, don't just believe whatever I say. Think about it for yourself. I gain nothing by convincing you of whatever I write here, I am simply sharing thoughts.

We bought into BNT not ETH. If we wanted to buy into ETH, we would have simply kept our money in ETH. It is no secret that 80% of the ETH will go towards the BNT project’s development and 20% will be kept as a reserve to ensure a minimum value per BNT. This doesn’t automatically make BNT worthless or the business model a scam, because we’re buying into Bancor’s potential (good or bad).

"Essentially, if everyone would want to convert their BNT back to ETH" - Why would we all want to convert our BNT back into ETH, especially at this stage?

i dont need complicated formulas, i payed 1 eth that is around 350 euro for 100 bnt, so i need 1 bnt to have a worth of 3.50 to breakeven, everything above is my profit, this coin will go to 10$ faster than you can say money

so im all good plus its a revulotionary project that i SUPPORT plus i make profit.

some people think theyre so smart but they dont see the obvious

Exactly my sentiment. 

[joele]

I will just start boldly. The Bancor business model is pretty close to a scam. I am sure you will not take my word for it, because this is my first post. In fact, I made this account because I find it bizarre that no one is talking about this. Let's be honest, which one of you truly tried to comprehend their mathematical proof? Not a single person who invested at least, because otherwise they would not have wasted their money. I will try to explain a little.

They collected pretty close to 400k ether. Essentially what they do, is keep .8*400k ETH = 320k ETH to themselves, and call the remaining 80k reserves. They will express this 80k in a different coin, called BNT. They assign 100 BNT to 1ETH that they received. That means there is 500BNT for every 1ETH in the reserves. Essentially, if everyone would want to convert their BNT back to ETH, they would get 1/500 ETH per BNT. Wait you say, in the white paper it says that the starting price of 100BNT will equal 1 ETH! This is true, this is where the mathematics uses a trick to hide what is going on. Their pricing formula, P=R/(S*F) ensures that the first BNT sold will be sold at a 'fair' value, namely equal to the amount of ETH you spent to buy it in the first place. After the first sell, things get worse rather quickly. Let's illustrate this by a little example:

Lets say that 10% of people who own BNT sell it back to ETH via the smart contract. For the initial price we get: P = 80k/(40m*.2) = 0.01. All looks fair. Then after the sell we get 40m*10%*0.01 = 40k,  P = 80k-40k/((40m-4m)*0.20) = 0,00556. Ouch, the price almost dropped to half value from the 10% sell-off (this is different if there are many small transactions but I will get to that later).

If people buy the same amount of BNT, this is what happens: P = 120k/(44m*0.20) = 0.01364. The increase in price is not nearly as interesting for the next person. But again, this will be lower for many small transactions.

I created a plot assuming transactions are made in small batches of BNT coins. We find that the BNT value drop VERY quickly when people start selling, and does not rise nearly as fast. Essentially this just makes BNT an undesirable coin. Another weird thing about their system is that it does not consider convexity. This means that big transactions will get very different prices than many small ones. This just does not make sense, but they don't care as they simply took your money.
http://imgur.com/a/f9yLy

If you are still not convinced, consider this. They literally admit to taking 80% of your money. All they give back is some mathematical trick based on 20% of the ether that you gave them. Do you really believe they just generated x5 value out of thin air? Sorry, but math does not work that way. I would recommend getting rid of your BNT asap, or you end up all the way on the left side of the graph. I am sorry that this news comes a bit late for some of you... I didn't read their methodology until last night Sad

Maybe now you can start to add up why the ICO was strange in various ways.

As final words, don't just believe whatever I say. Think about it for yourself. I gain nothing by convincing you of whatever I write here, I am simply sharing thoughts.

We bought into BNT not ETH. If we wanted to buy into ETH, we would have simply kept our money in ETH. It is no secret that 80% of the ETH will go towards the BNT project’s development and 20% will be kept as a reserve to ensure a minimum value per BNT. This doesn’t automatically make BNT worthless or the business model a scam, because we’re buying into Bancor’s potential (good or bad).

"Essentially, if everyone would want to convert their BNT back to ETH" - Why would we all want to convert our BNT back into ETH, especially at this stage?

i dont need complicated formulas, i payed 1 eth that is around 350 euro for 100 bnt, so i need 1 bnt to have a worth of 3.50 to breakeven, everything above is my profit, this coin will go to 10$ faster than you can say money

so im all good plus its a revulotionary project that i SUPPORT plus i make profit.

some people think theyre so smart but they dont see the obvious

It's now trading around 0.031 btc or $85 per BNT

https://hitbtc.com/exchange/BNT-to-BTC

[D3m0nKinGx]

I will just start boldly. The Bancor business model is pretty close to a scam. I am sure you will not take my word for it, because this is my first post. In fact, I made this account because I find it bizarre that no one is talking about this. Let's be honest, which one of you truly tried to comprehend their mathematical proof? Not a single person who invested at least, because otherwise they would not have wasted their money. I will try to explain a little.

They collected pretty close to 400k ether. Essentially what they do, is keep .8*400k ETH = 320k ETH to themselves, and call the remaining 80k reserves. They will express this 80k in a different coin, called BNT. They assign 100 BNT to 1ETH that they received. That means there is 500BNT for every 1ETH in the reserves. Essentially, if everyone would want to convert their BNT back to ETH, they would get 1/500 ETH per BNT. Wait you say, in the white paper it says that the starting price of 100BNT will equal 1 ETH! This is true, this is where the mathematics uses a trick to hide what is going on. Their pricing formula, P=R/(S*F) ensures that the first BNT sold will be sold at a 'fair' value, namely equal to the amount of ETH you spent to buy it in the first place. After the first sell, things get worse rather quickly. Let's illustrate this by a little example:

Lets say that 10% of people who own BNT sell it back to ETH via the smart contract. For the initial price we get: P = 80k/(40m*.2) = 0.01. All looks fair. Then after the sell we get 40m*10%*0.01 = 40k,  P = 80k-40k/((40m-4m)*0.20) = 0,00556. Ouch, the price almost dropped to half value from the 10% sell-off (this is different if there are many small transactions but I will get to that later).

If people buy the same amount of BNT, this is what happens: P = 120k/(44m*0.20) = 0.01364. The increase in price is not nearly as interesting for the next person. But again, this will be lower for many small transactions.

I created a plot assuming transactions are made in small batches of BNT coins. We find that the BNT value drop VERY quickly when people start selling, and does not rise nearly as fast. Essentially this just makes BNT an undesirable coin. Another weird thing about their system is that it does not consider convexity. This means that big transactions will get very different prices than many small ones. This just does not make sense, but they don't care as they simply took your money.
http://imgur.com/a/f9yLy

If you are still not convinced, consider this. They literally admit to taking 80% of your money. All they give back is some mathematical trick based on 20% of the ether that you gave them. Do you really believe they just generated x5 value out of thin air? Sorry, but math does not work that way. I would recommend getting rid of your BNT asap, or you end up all the way on the left side of the graph. I am sorry that this news comes a bit late for some of you... I didn't read their methodology until last night Sad

Maybe now you can start to add up why the ICO was strange in various ways.

As final words, don't just believe whatever I say. Think about it for yourself. I gain nothing by convincing you of whatever I write here, I am simply sharing thoughts.

We bought into BNT not ETH. If we wanted to buy into ETH, we would have simply kept our money in ETH. It is no secret that 80% of the ETH will go towards the BNT project’s development and 20% will be kept as a reserve to ensure a minimum value per BNT. This doesn’t automatically make BNT worthless or the business model a scam, because we’re buying into Bancor’s potential (good or bad).

"Essentially, if everyone would want to convert their BNT back to ETH" - Why would we all want to convert our BNT back into ETH, especially at this stage?

i dont need complicated formulas, i payed 1 eth that is around 350 euro for 100 bnt, so i need 1 bnt to have a worth of 3.50 to breakeven, everything above is my profit, this coin will go to 10$ faster than you can say money

so im all good plus its a revulotionary project that i SUPPORT plus i make profit.

some people think theyre so smart but they dont see the obvious

It's now trading around 0.031 btc or $85 per BNT

https://hitbtc.com/exchange/BNT-to-BTC

Let's not forget to mention it also hit 0.09 before going back down to around .034

[pamparam]

I will just start boldly. The Bancor business model is pretty close to a scam. I am sure you will not take my word for it, because this is my first post. In fact, I made this account because I find it bizarre that no one is talking about this. Let's be honest, which one of you truly tried to comprehend their mathematical proof? Not a single person who invested at least, because otherwise they would not have wasted their money. I will try to explain a little.

They collected pretty close to 400k ether. Essentially what they do, is keep .8*400k ETH = 320k ETH to themselves, and call the remaining 80k reserves. They will express this 80k in a different coin, called BNT. They assign 100 BNT to 1ETH that they received. That means there is 500BNT for every 1ETH in the reserves. Essentially, if everyone would want to convert their BNT back to ETH, they would get 1/500 ETH per BNT. Wait you say, in the white paper it says that the starting price of 100BNT will equal 1 ETH! This is true, this is where the mathematics uses a trick to hide what is going on. Their pricing formula, P=R/(S*F) ensures that the first BNT sold will be sold at a 'fair' value, namely equal to the amount of ETH you spent to buy it in the first place. After the first sell, things get worse rather quickly. Let's illustrate this by a little example:

Lets say that 10% of people who own BNT sell it back to ETH via the smart contract. For the initial price we get: P = 80k/(40m*.2) = 0.01. All looks fair. Then after the sell we get 40m*10%*0.01 = 40k,  P = 80k-40k/((40m-4m)*0.20) = 0,00556. Ouch, the price almost dropped to half value from the 10% sell-off (this is different if there are many small transactions but I will get to that later).

If people buy the same amount of BNT, this is what happens: P = 120k/(44m*0.20) = 0.01364. The increase in price is not nearly as interesting for the next person. But again, this will be lower for many small transactions.

I created a plot assuming transactions are made in small batches of BNT coins. We find that the BNT value drop VERY quickly when people start selling, and does not rise nearly as fast. Essentially this just makes BNT an undesirable coin. Another weird thing about their system is that it does not consider convexity. This means that big transactions will get very different prices than many small ones. This just does not make sense, but they don't care as they simply took your money.
http://imgur.com/a/f9yLy

If you are still not convinced, consider this. They literally admit to taking 80% of your money. All they give back is some mathematical trick based on 20% of the ether that you gave them. Do you really believe they just generated x5 value out of thin air? Sorry, but math does not work that way. I would recommend getting rid of your BNT asap, or you end up all the way on the left side of the graph. I am sorry that this news comes a bit late for some of you... I didn't read their methodology until last night Sad

Maybe now you can start to add up why the ICO was strange in various ways.

As final words, don't just believe whatever I say. Think about it for yourself. I gain nothing by convincing you of whatever I write here, I am simply sharing thoughts.

We bought into BNT not ETH. If we wanted to buy into ETH, we would have simply kept our money in ETH. It is no secret that 80% of the ETH will go towards the BNT project’s development and 20% will be kept as a reserve to ensure a minimum value per BNT. This doesn’t automatically make BNT worthless or the business model a scam, because we’re buying into Bancor’s potential (good or bad).

"Essentially, if everyone would want to convert their BNT back to ETH" - Why would we all want to convert our BNT back into ETH, especially at this stage?

i dont need complicated formulas, i payed 1 eth that is around 350 euro for 100 bnt, so i need 1 bnt to have a worth of 3.50 to breakeven, everything above is my profit, this coin will go to 10$ faster than you can say money

so im all good plus its a revulotionary project that i SUPPORT plus i make profit.

some people think theyre so smart but they dont see the obvious

It's now trading around 0.031 btc or $85 per BNT

https://hitbtc.com/exchange/BNT-to-BTC

Impossible, might be a scam, because Bancor tokens are locked for 1 week after the crowdfund

[hdclover]

I will just start boldly. The Bancor business model is pretty close to a scam. I am sure you will not take my word for it, because this is my first post. In fact, I made this account because I find it bizarre that no one is talking about this. Let's be honest, which one of you truly tried to comprehend their mathematical proof? Not a single person who invested at least, because otherwise they would not have wasted their money. I will try to explain a little.

They collected pretty close to 400k ether. Essentially what they do, is keep .8*400k ETH = 320k ETH to themselves, and call the remaining 80k reserves. They will express this 80k in a different coin, called BNT. They assign 100 BNT to 1ETH that they received. That means there is 500BNT for every 1ETH in the reserves. Essentially, if everyone would want to convert their BNT back to ETH, they would get 1/500 ETH per BNT. Wait you say, in the white paper it says that the starting price of 100BNT will equal 1 ETH! This is true, this is where the mathematics uses a trick to hide what is going on. Their pricing formula, P=R/(S*F) ensures that the first BNT sold will be sold at a 'fair' value, namely equal to the amount of ETH you spent to buy it in the first place. After the first sell, things get worse rather quickly. Let's illustrate this by a little example:

Lets say that 10% of people who own BNT sell it back to ETH via the smart contract. For the initial price we get: P = 80k/(40m*.2) = 0.01. All looks fair. Then after the sell we get 40m*10%*0.01 = 40k,  P = 80k-40k/((40m-4m)*0.20) = 0,00556. Ouch, the price almost dropped to half value from the 10% sell-off (this is different if there are many small transactions but I will get to that later).

If people buy the same amount of BNT, this is what happens: P = 120k/(44m*0.20) = 0.01364. The increase in price is not nearly as interesting for the next person. But again, this will be lower for many small transactions.

I created a plot assuming transactions are made in small batches of BNT coins. We find that the BNT value drop VERY quickly when people start selling, and does not rise nearly as fast. Essentially this just makes BNT an undesirable coin. Another weird thing about their system is that it does not consider convexity. This means that big transactions will get very different prices than many small ones. This just does not make sense, but they don't care as they simply took your money.
http://imgur.com/a/f9yLy

If you are still not convinced, consider this. They literally admit to taking 80% of your money. All they give back is some mathematical trick based on 20% of the ether that you gave them. Do you really believe they just generated x5 value out of thin air? Sorry, but math does not work that way. I would recommend getting rid of your BNT asap, or you end up all the way on the left side of the graph. I am sorry that this news comes a bit late for some of you... I didn't read their methodology until last night Sad

Maybe now you can start to add up why the ICO was strange in various ways.

As final words, don't just believe whatever I say. Think about it for yourself. I gain nothing by convincing you of whatever I write here, I am simply sharing thoughts.

We bought into BNT not ETH. If we wanted to buy into ETH, we would have simply kept our money in ETH. It is no secret that 80% of the ETH will go towards the BNT project’s development and 20% will be kept as a reserve to ensure a minimum value per BNT. This doesn’t automatically make BNT worthless or the business model a scam, because we’re buying into Bancor’s potential (good or bad).

"Essentially, if everyone would want to convert their BNT back to ETH" - Why would we all want to convert our BNT back into ETH, especially at this stage?

i dont need complicated formulas, i payed 1 eth that is around 350 euro for 100 bnt, so i need 1 bnt to have a worth of 3.50 to breakeven, everything above is my profit, this coin will go to 10$ faster than you can say money

so im all good plus its a revulotionary project that i SUPPORT plus i make profit.

some people think theyre so smart but they dont see the obvious

It's now trading around 0.031 btc or $85 per BNT

https://hitbtc.com/exchange/BNT-to-BTC

Impossible, might be a scam, because Bancor tokens are locked for 1 week after the crowdfund

its "future" bancor token or perhaps the exchange company bought token .. u cant deposit or withdraw yet.

[Razaberry]

"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/fundraiser

Only 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.

[Razaberry]

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.

[Razaberry]

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.

[Razaberry]

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.

[Trustor]

Bancor is trading at 80$ is that real ?