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

[Ekkio]

One of the ways to think about reserves is as "liquidity pools". Reserves are essentially common pools that provide liquidity to their smart token holders. The current solution for liquidity is based on market orders on the different exchanges (and in some cases, in different currencies pairs). If you measure the size of these current "liquidity pools" (aka as "market depth"), relative to the market-cap of the currency, and compare the event where similar amounts are unloaded to the market through the exchanges vs. through a smart token with 10% reserve, you would probably find out that the market behaves in a much more stable way using the smart token, since there is a single common liquidity pool, which is growing relative to the market cap of the smart token.

It can be tricky to wrap the mind around it since this is a model for linking between currencies which is quite different than the one being used today and for a long time now, and I really hope my attempt to explain it was clear enough.

Anyway, I'll be happy to answer any other questions you may have!

And thank you for your interest

I went through all the math and tried out some basic modeling because I am excited and curious how it all works. One question though, the first step that allowed you to make a continuous formula out of the recursive: dR = PdS and then use that equation later, is this some known approach that helps to make continuous formula out of recursive, that I don't know about because of my limited math education, or is it a clever trick that you can credit to yourself?

This is basic calculus.

Alright, given A1, A2, A3 and recursive formula An+An+1/An+2 = An+3,  eg A1=1 A2=2 A3=4 therefore  A4 = 1 + 2/3 =5/3

Can you show me how to make continuous formula out of it f(x) eg f(4) = 5/3

They solve a simple differential equation. Check any calculus textbook to learn how to do this.

Sure, but first you need to get to the point of having simple differential equation, hence my question, can you get the simple differential equation out of recursive formula I provided?

You "recursive formula" makes a very little sense to me. Expression for bancor price is derived by integrating a differential equation which you pointed out in you first post, dR = PdS. This is not a rocket science, this is a level of homework for undergraduate students of technical schools. It is not possible to explain how calculus works in a forum post, just check any textbook, they explain all theory very well.

You don't seem to understand the question.

The original formula Price = Reserve / (Supply * CRR) is recursive.

It's calculated in sequential steps , add unit of Reserve, increase Supply according to price, recalculate price, rinse and repeat.

According to you making a continuous formula f(x) out of it is "basic calculus".

If that's that's true then it should be easy for you to make continuous formula out of any recursive formula.

Therefore please make continuous formula out of An+An+1/An+2 = An+3 .

You don't need no "recursive formula" to solve this problem. Derivatives and integrals of many analytic functions were derived using the limit theory long before we were born, you just use them when you need. Sorry for being boring, but I'd like to direct you to calculus textbook for undergrads again, where all such derivations are given in details.

I am going to try to clarify it one last time, if it doesn't work so be it.

I don't have a problem with derivatives and understanding their proof .

My question was not about the technique or how in this particular case they got their formulas.

Initially they had recursive formula Price = Reserve / (Supply * CRR)  and using derivatives they were able to transform it to continuous formula Price(x) = ((1+ x / InitialSupply)^(1/CRR -1)) * InitialPrice

My question is there a general method to transform any recursive formula into continuous, or was it the clever trick that allowed to do that in just this particular case.

[monarx911@i.ua]

I think since it was canceled ico tezos most of the funds will go into this project, I would like to have time to participate in this ico there will be a panic for the purchase of bancor

[yvv]

One of the ways to think about reserves is as "liquidity pools". Reserves are essentially common pools that provide liquidity to their smart token holders. The current solution for liquidity is based on market orders on the different exchanges (and in some cases, in different currencies pairs). If you measure the size of these current "liquidity pools" (aka as "market depth"), relative to the market-cap of the currency, and compare the event where similar amounts are unloaded to the market through the exchanges vs. through a smart token with 10% reserve, you would probably find out that the market behaves in a much more stable way using the smart token, since there is a single common liquidity pool, which is growing relative to the market cap of the smart token.

It can be tricky to wrap the mind around it since this is a model for linking between currencies which is quite different than the one being used today and for a long time now, and I really hope my attempt to explain it was clear enough.

Anyway, I'll be happy to answer any other questions you may have!

And thank you for your interest

I went through all the math and tried out some basic modeling because I am excited and curious how it all works. One question though, the first step that allowed you to make a continuous formula out of the recursive: dR = PdS and then use that equation later, is this some known approach that helps to make continuous formula out of recursive, that I don't know about because of my limited math education, or is it a clever trick that you can credit to yourself?

This is basic calculus.

Alright, given A1, A2, A3 and recursive formula An+An+1/An+2 = An+3,  eg A1=1 A2=2 A3=4 therefore  A4 = 1 + 2/3 =5/3

Can you show me how to make continuous formula out of it f(x) eg f(4) = 5/3

They solve a simple differential equation. Check any calculus textbook to learn how to do this.

Sure, but first you need to get to the point of having simple differential equation, hence my question, can you get the simple differential equation out of recursive formula I provided?

You "recursive formula" makes a very little sense to me. Expression for bancor price is derived by integrating a differential equation which you pointed out in you first post, dR = PdS. This is not a rocket science, this is a level of homework for undergraduate students of technical schools. It is not possible to explain how calculus works in a forum post, just check any textbook, they explain all theory very well.

You don't seem to understand the question.

The original formula Price = Reserve / (Supply * CRR) is recursive.

It's calculated in sequential steps , add unit of Reserve, increase Supply according to price, recalculate price, rinse and repeat.

According to you making a continuous formula f(x) out of it is "basic calculus".

If that's that's true then it should be easy for you to make continuous formula out of any recursive formula.

Therefore please make continuous formula out of An+An+1/An+2 = An+3 .

You don't need no "recursive formula" to solve this problem. Derivatives and integrals of many analytic functions were derived using the limit theory long before we were born, you just use them when you need. Sorry for being boring, but I'd like to direct you to calculus textbook for undergrads again, where all such derivations are given in details.

I am going to try to clarify it one last time, if it doesn't work so be it.

I don't have a problem with derivatives and understanding their proof .

My question was not about the technique or how in this particular case they got their formulas.

Initially they had recursive formula Price = Reserve / (Supply * CRR)  and using derivatives they were able to transform it to continuous formula Price(x) = ((1+ x / InitialSupply)^(1/CRR -1)) * InitialPrice

My question is there a general method to transform any recursive formula into continuous, or was it the clever trick that allowed to do that in just this particular case.

Oh yes, you do have a problem understanding derivatives. No, they don't have no "recursive function" not initially, not finally, not in the middle. Price(x) = ((x / InitialSupply)^(1/CRR -1)) * InitialPrice is a fucking integral of a fucking derivative, which you can find in every fucking math textbook. Derivative of log(x) over x equals 1/x; integral of dx/x = log(x) * constant,  voua la, problem solved. Just RTFM dude.

[Qiuyue201]

I think the plan was that it won't be capped because the more they collect they more they will have in the reserves. So that decision makes sense, not from the investor's point however.

you do realise that by investor point of view, the more they raise the more our token will rise? for more than 1 reason,
first would be that the token price rises with each token bought from the contract.
second is the fact they will put % of that in the reserve which brings liquidity and that translates to higher volumes.
third they will invest some of that money to build tokens and exchangers that use bancor which will give bancor even more rise in value...
people need to understand that more money != less ROI in this case

I think you could apply similar logic to many other projects. Also what is important, if they indeed make the ICO capped too high, simply less people will invest. For example, capping the ICO at 50 million and making it last couple weeks, will make them gather for example 10 million, but capping the ICO at 15 million, would make them gather 15 million. Great example is Wings. They gathered only 2 millions (now are worth much more), because their ICO last couple of weeks and was capped to high. If Wings was 10 million capped ICO they would easily gather that sum. Let's hope Bancor does not make the same mistake as Wings. Setting and uncapped ICO is not only bad for investors but also for the team.

[whatsTheDeal]

I think the plan was that it won't be capped because the more they collect they more they will have in the reserves. So that decision makes sense, not from the investor's point however.

you do realise that by investor point of view, the more they raise the more our token will rise? for more than 1 reason,
first would be that the token price rises with each token bought from the contract.
second is the fact they will put % of that in the reserve which brings liquidity and that translates to higher volumes.
third they will invest some of that money to build tokens and exchangers that use bancor which will give bancor even more rise in value...
people need to understand that more money != less ROI in this case

I think you could apply similar logic to many other projects. Also what is important, if they indeed make the ICO capped too high, simply less people will invest. For example, capping the ICO at 50 million and making it last couple weeks, will make them gather for example 10 million, but capping the ICO at 15 million, would make them gather 15 million. Great example is Wings. They gathered only 2 millions (now are worth much more), because their ICO last couple of weeks and was capped to high. If Wings was 10 million capped ICO they would easily gather that sum. Let's hope Bancor does not make the same mistake as Wings. Setting and uncapped ICO is not only bad for investors but also for the team.

I really fail to see how it is bad for investors, could you elaborate? and not just say, people invest less because thats not to say its bad for them, maybe they dont know whats good for them since they are not pro investors?

[BitsifyOfficial]

I think since it was canceled ico tezos most of the funds will go into this project, I would like to have time to participate in this ico there will be a panic for the purchase of bancor

Was the Tezos ICO cancelled? Hmm, I just got a notification from TokenMart that the ICO for Tezos is starting soon. Might go look into that now

[meeekz]

Is there any word on the delay? When will the ICO start?  When will the re-messaging happen?  When will we see details of the ICO?

[zrunfeng]

Why you delay the ICO.I am ready for Bancor...

[erikalui]

Hindi translation complete: https://bitcointalk.org/index.php?topic=1926406.new#new

[stefek99]

Amazing UI / UX and FB messenger integration.

This is for real.

[Razaberry]

New Bancor blog post: Smart Tokens 101

https://blog.bancor.network/smart-tokens-101-63edc2cc5a89

[john312]

Just make the ICO capped at rational levels, thx!

[whale123]

They know what they are doing. They won't set it too high.

[sud]

Only 9 days to ICO and we still know so little about it. Will it be daleyed?

[RAGEmond]

What are the differents between BNCZUK and BNCHDL token?

Answered this question here:

What are the differents between BNCZUK and BNCHDL token?

each bounty campaign has it's own tokens.

Head over to: https://app.bancor.network/discover and read each bounties ABOUT page for necessary information.

Bancor Social Media Bounty Program - All Zuks = 0.2% of the total supply of BANCOR at the end of the ICO

Bancor Bitcointalk Signature Bounty Program - All Hodls = 0.2% of the total supply of BANCOR at the end of the ICO

Bancor Translation Bounty Program - All Lingos = 0.1% of the total supply of BANCOR at the end of the ICO

Content Creation Bounty Program - All Shakespears = 0.2% of the total supply of BANCOR at the end of the ICO

Bancor Bug Bounty Program - All ECoins = 0.5% of the total supply of BANCOR at the end of the ICO and will be distributed continuously over the course of the next 2 years of bug discoveries

Which means all in all they invest 1.2% of the ICO for bounties.

To be able to manage everything and don't have a huge mess and problems like in other project's bounties they have separated bounties into categories with their custom tokens .. all will be changed to BANCOR-Tokens at the end of bounties.

See: Q. How will my Hodls become BANCOR tokens?
A. At the end of the ICO, 0.2% of the total BANCOR supply will be sent to the "Reserve" of the Hodl Smart Token with a CRR set to 100%. This means any Hodls holder will be able to instantly convert their Hodls to BANCOR. In the background, what happens is that the Hodls are send to its Smart Contract, which destroys the Hodls and pulls our BANCOR from the Hodls reserve according to the Hodl/BANCOR price. For information on CRR and how smart token works, read the Whitepaper or visit our FAQ.


This applies for all custom bounty tokens Hodls / Lingos / Shake's / ECoins and Zuk.

[barista1992]

Interesting project with smart protocol / reserv tokens.

50/50 on https://icotracker.net/project/the_bancor_protocol

Whitepaper            10   
Roadmap            10   
Team                10   
Escrow            10   
ICO Conditions    10

more review on FB

[whatsTheDeal]

Only 9 days to ICO and we still know so little about it. Will it be daleyed?

they mentioned a possible delay, im guessing they will talk to us soon about it since its so close

[MoneroMooo]

Only 9 days to ICO and we still know so little about it. Will it be daleyed?

they mentioned a possible delay, im guessing they will talk to us soon about it since its so close

hope it's kind of signatures. if it is postponed again, I'm forget about what I know. I'm going from the campaign and signature. they haven't said that they want to do.

[rgornik]

I think since it was canceled ico tezos most of the funds will go into this project, I would like to have time to participate in this ico there will be a panic for the purchase of bancor

AFAIK Tezos was not cancled but rather postponed. But yes, I agree with you. Although there are some other great ICOs in that competition

[majestymage]

What are the differents between BNCZUK and BNCHDL token?

one token is a bounty for extended media advocacy while the other is just a bitcointalk bounty token