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

[Drawesome]

Hi!!
Quick question: Can I use myetherwallet to send BNT as a Bancor Wallet?

Thanks

Anyone? I bough 1 BNT so expe sive from hitbtc and wanna send it to my ether wallet. Can I do that??

[burner2015]

It is best time to buy because whales are playing successfully to push the little investors and weak hands out with final shaking out method which has been used over and over again, even I didn't think this will happen this quickly. It is not new when some market reacted quite opposite to everyone's expectations at starting days. It will bounce back in near future.

yeah exactly what is happening.

[patroncito]

can someone post a good explanation on why BNT is sinking every day?

[Hullo]

can someone post a good explanation on why BNT is sinking every day?

In most easy and simple word it can be explained as accumulation all what is happening right now. If you are holder then keep holding and don't shake your hands now as good times are coming soon. It is big project which will not fall like this easy.

[TeraBite]

relax and buy the dip, or panic sell and get burned

Perfect advice    i  hope someone will listen to you 

This is simple method for every promising project this is amazing platform soon this will explode. Big opportunity for those who missed to buy during ICO.

[jacafbiz]

can someone post a good explanation on why BNT is sinking every day?

It is simple, ICO flippers are selling to enter into another big project. Bancor is a long term project and token holders will surely benefit from this

[reffi]

What exactly is the real purpose of Bancor?  On their website it says "ANYONE CAN CREATE A TOKEN AND LAUNCH A CROWDSALE"  is that the real purpose?    I think investors now after Bancor ICO are more cautious, and will not invest blindly into new ICOs, I think Bancor will drop to $1 soon, that ICO bubble is over...

What is the problem Bancor is solving?

The Bancor protocol represents the first technological solution for the classic problem in economics known as the “Double Coincidence of Wants Problem,” in the domain of asset exchange.

For barter, the coincidence of wants problem was solved through money, allowing people to transact asynchronously, over time and space. For money, the existing exchange model relies on the labor of market makers providing liquidity, as represented by an order book which creates market depth. This requirement for labor creates a barrier-to-liquidity, meaning that some threshold of trade activity level is required in order to retain high liquidity at the market price. This barrier-to-liquidity particularly affects small cap, custom, lightly traded currencies, such as community currencies or small business loyalty points, as examples.

The Bancor protocol proposes a new solution that removes the barrier-to-liquidity by employing an asynchronous price-discovery model enabled by asset-holding smart tokens. Smart tokens are always purchasable and sellable for the token(s) they hold in reserve. The continuous liquidity of smart tokens removes the barrier-to-liquidity and enables the emergence of the long tail of user-generated currencies. This could lead to a democratization of value creation, similarly to how blogs democratized publishing and YouTube democratized broadcasting.

Beyond enabling the long tail of cryptocurrencies, the Bancor protocol mechanism of intrinsic reserve currencies coupled with the ability of the smart contract to issue and liquidate smart tokens, also holds profound implications in use cases where the goal is not to create new credit (as is the case with most new cryptocurrencies) but rather to enable the exchange of existing currencies without a counterparty or orderbook (see “Token Changers”) or to enable the direct ownership of currency baskets, or index funds, without counterparty risk (see “Decentralized ETFs”).

Source: https://www.bancor.network/faq/general

Thanks for the info, but all I see is big words or theories... in the FAQ it also says that What is Bancor?

"The Bancor protocol enables anyone to create a new type of cryptocurrency called a smart token, which can hold (and trade) other cryptocurrencies"  Really???  Like thanks to Bancor we will get another 500 new coins?! oh wow, thanks alot Bancor! Now just how do we find buyers and demand for each and every one of those new coins?

My questions is, does Bancor still relies on ETH to create those new tokens? or is everything still based on ETH??  If Bancor can create its own tokens and be competitor to ETH then I can see the purpose, but if it relies on Ether then why even bother?

You're welcome. I am not the best person to provide an answer here, but let me give it a shot...

Let's assume I am the owner of a local restaurant - Restaurant X. I want to encourage more people to visit Restaurant X - both locals and people from other parts in the world. I decide to issue discount vouchers in the form of a smart token. In addition, I want the token to be liquid and of value even to those who might choose not to come and eat at my restaurant. So I decide to create and issue my own smart token within the Bancor network. I want to call it Restaurant X (REX). I need BNT tokens to create my smart token. Assuming that I don't own any BNT tokens, I buy some ETH and convert it into BNT tokens via smart contract. Alternatively, I have the option to buy BNT in the open market by paying in any currency or token that the seller will accept.

"All smart tokens issued within the Bancor network will hold the BANCOR token as a reserve (though they may also hold additional reserve tokens. This means that an appreciation in the value of any of the network's smart tokens will appreciate the value of the BANCOR network token, benefiting all other smart tokens in the BANCOR network, since their reserve balance will increase. BANCOR will also be used a a reserve for the token changers that make up its decentralized exchange network. A BANCOR token changer is basically a smart token that holds a 50% CRR reserve in BANCOR, and 50% CRR reserve in an existing, standard ERC 20 token (e.g. REP, GNT, RLC) allowing end-users to easily convert between the two by buying with one reserve token and selling it for the other."

In other words, those who hold REX smart tokens will not have to come to my restaurant to exchange it for a meal in order to realize the value. They will be able to exchange their REX tokens for other tokens anywhere in the world. E.g. let's assume Luigi, a restaurant owner in Italy, creates and issues a smart token for his restaurant within the Bancor network. He calls the token: Restaurant Italy (RIT). Now I will be able to exchange some of my REX tokens for RIT tokens in order to enjoy a meal at Luig's restaurant in Italy. Or in case I can't make it, I just take the RIT tokens and convert it back into the tokens of my liking (within the decentralized exchange network built by Bancor).

Or even better...

Let's assume someone in Italy received some RIT tokens from Luigi as part of a promotion. However, Sandra don't want to eat at Luigi's restaurant. She wants to buy a pair of designer shoes instead. So she orders a pair of shoes from Gustav in Germany and pays in RIT tokens - partially or in full. Gustav is happy, because he has the option to keep or exchange the RIT tokens for something else of value. Now Sandra goes around, telling her friends and everybody else how she bought shoes in Germany by using RIT tokens. Her friends are blown away. The news spread like a wild fire. Luigi's restaurant is getting a lot of attention!

Meanwhile in Germany, Gustav is telling his friends how he managed to sell more shoes because of his decision to accept RIT tokens. And so the Bancor story continues to spread like a wildfire. Those who sold their BNT tokens for next to nothing are now starting to regret it.  

Thus, by creating my smart token or "discount vouchers" within the Bancor network, my token enjoys worldwide liquidity due to the reserve value held and people who make use of the Bancor network. Another benefit that I enjoy is that my restaurant is now getting worldwide exposure. This "discount voucher" keeps on giving!

"My questions is, does Bancor still relies on ETH to create those new tokens? or is everything still based on ETH?? If Bancor can create its own tokens and be competitor to ETH then I can see the purpose, but if it relies on Ether then why even bother?" - As far as I understand, Bancor's products are build on the ETH blockchain. However, while ETH was needed to buy BNT tokens initially, one is now able to buy BNT with any currency a seller will accept. This is because of the ETH reserve value of 0.01 per BNT. However, if I am not mistaken, if one sells BNT by sending instructions via smart contract, it will only return ETH at this stage. The BNT sold will be destroyed. In addition, if one wishes to buy BNT via smart contract, one can only do so by sending ETH via smart contract.

The above is my understanding of how it works (at least the token creation part of it). I am sure I am not 100% spot on, but it might give you a pretty good idea of what the idea is behind Bancor. This could be HUGE!

Wow thanks for making this more clear! I will read more about Bancor but thanks for explaining in so much detail!
Even thought it does sound very interesting and could benefit businesses greatly, and if it is all truly like you described it sounds a bit like Utopia world where people are all friendly and welcoming towards new technologies.  But most people can't even understand Bitcoin yet and how to buy things with it, and now you are asking people to understand each new coin for each new business.... its a difficult proposal for simple minded people...  I do hope that Bancor will succeed, but to me it sounds like it might take years until this becomes successful.  

I will read more about Bancor and will keep an eye on this project, but it does sound like a long term investment.

[paulmaritz]

What exactly is the real purpose of Bancor?  On their website it says "ANYONE CAN CREATE A TOKEN AND LAUNCH A CROWDSALE"  is that the real purpose?    I think investors now after Bancor ICO are more cautious, and will not invest blindly into new ICOs, I think Bancor will drop to $1 soon, that ICO bubble is over...

What is the problem Bancor is solving?

The Bancor protocol represents the first technological solution for the classic problem in economics known as the “Double Coincidence of Wants Problem,” in the domain of asset exchange.

For barter, the coincidence of wants problem was solved through money, allowing people to transact asynchronously, over time and space. For money, the existing exchange model relies on the labor of market makers providing liquidity, as represented by an order book which creates market depth. This requirement for labor creates a barrier-to-liquidity, meaning that some threshold of trade activity level is required in order to retain high liquidity at the market price. This barrier-to-liquidity particularly affects small cap, custom, lightly traded currencies, such as community currencies or small business loyalty points, as examples.

The Bancor protocol proposes a new solution that removes the barrier-to-liquidity by employing an asynchronous price-discovery model enabled by asset-holding smart tokens. Smart tokens are always purchasable and sellable for the token(s) they hold in reserve. The continuous liquidity of smart tokens removes the barrier-to-liquidity and enables the emergence of the long tail of user-generated currencies. This could lead to a democratization of value creation, similarly to how blogs democratized publishing and YouTube democratized broadcasting.

Beyond enabling the long tail of cryptocurrencies, the Bancor protocol mechanism of intrinsic reserve currencies coupled with the ability of the smart contract to issue and liquidate smart tokens, also holds profound implications in use cases where the goal is not to create new credit (as is the case with most new cryptocurrencies) but rather to enable the exchange of existing currencies without a counterparty or orderbook (see “Token Changers”) or to enable the direct ownership of currency baskets, or index funds, without counterparty risk (see “Decentralized ETFs”).

Source: https://www.bancor.network/faq/general

Thanks for the info, but all I see is big words or theories... in the FAQ it also says that What is Bancor?

"The Bancor protocol enables anyone to create a new type of cryptocurrency called a smart token, which can hold (and trade) other cryptocurrencies"  Really???  Like thanks to Bancor we will get another 500 new coins?! oh wow, thanks alot Bancor! Now just how do we find buyers and demand for each and every one of those new coins?

My questions is, does Bancor still relies on ETH to create those new tokens? or is everything still based on ETH??  If Bancor can create its own tokens and be competitor to ETH then I can see the purpose, but if it relies on Ether then why even bother?

You're welcome. I am not the best person to provide an answer here, but let me give it a shot...

Let's assume I am the owner of a local restaurant - Restaurant X. I want to encourage more people to visit Restaurant X - both locals and people from other parts in the world. I decide to issue discount vouchers in the form of a smart token. In addition, I want the token to be liquid and of value even to those who might choose not to come and eat at my restaurant. So I decide to create and issue my own smart token within the Bancor network. I want to call it Restaurant X (REX). I need BNT tokens to create my smart token. Assuming that I don't own any BNT tokens, I buy some ETH and convert it into BNT tokens via smart contract. Alternatively, I have the option to buy BNT in the open market by paying in any currency or token that the seller will accept.

"All smart tokens issued within the Bancor network will hold the BANCOR token as a reserve (though they may also hold additional reserve tokens. This means that an appreciation in the value of any of the network's smart tokens will appreciate the value of the BANCOR network token, benefiting all other smart tokens in the BANCOR network, since their reserve balance will increase. BANCOR will also be used a a reserve for the token changers that make up its decentralized exchange network. A BANCOR token changer is basically a smart token that holds a 50% CRR reserve in BANCOR, and 50% CRR reserve in an existing, standard ERC 20 token (e.g. REP, GNT, RLC) allowing end-users to easily convert between the two by buying with one reserve token and selling it for the other."

In other words, those who hold REX smart tokens will not have to come to my restaurant to exchange it for a meal in order to realize the value. They will be able to exchange their REX tokens for other tokens anywhere in the world. E.g. let's assume Luigi, a restaurant owner in Italy, creates and issues a smart token for his restaurant within the Bancor network. He calls the token: Restaurant Italy (RIT). Now I will be able to exchange some of my REX tokens for RIT tokens in order to enjoy a meal at Luig's restaurant in Italy. Or in case I can't make it, I just take the RIT tokens and convert it back into the tokens of my liking (within the decentralized exchange network built by Bancor).

Or even better...

Let's assume someone in Italy received some RIT tokens from Luigi as part of a promotion. However, Sandra don't want to eat at Luigi's restaurant. She wants to buy a pair of designer shoes instead. So she orders a pair of shoes from Gustav in Germany and pays in RIT tokens - partially or in full. Gustav is happy, because he has the option to keep or exchange the RIT tokens for something else of value. Now Sandra goes around, telling her friends and everybody else how she bought shoes in Germany by using RIT tokens. Her friends are blown away. The news spread like a wild fire. Luigi's restaurant is getting a lot of attention!

Meanwhile in Germany, Gustav is telling his friends how he managed to sell more shoes because of his decision to accept RIT tokens. And so the Bancor story continues to spread like a wildfire. Those who sold their BNT tokens for next to nothing are now starting to regret it.  

Thus, by creating my smart token or "discount vouchers" within the Bancor network, my token enjoys worldwide liquidity due to the reserve value held and people who make use of the Bancor network. Another benefit that I enjoy is that my restaurant is now getting worldwide exposure. This "discount voucher" keeps on giving!

"My questions is, does Bancor still relies on ETH to create those new tokens? or is everything still based on ETH?? If Bancor can create its own tokens and be competitor to ETH then I can see the purpose, but if it relies on Ether then why even bother?" - As far as I understand, Bancor's products are build on the ETH blockchain. However, while ETH was needed to buy BNT tokens initially, one is now able to buy BNT with any currency a seller will accept. This is because of the ETH reserve value of 0.01 per BNT. However, if I am not mistaken, if one sells BNT by sending instructions via smart contract, it will only return ETH at this stage. The BNT sold will be destroyed. In addition, if one wishes to buy BNT via smart contract, one can only do so by sending ETH via smart contract.

The above is my understanding of how it works (at least the token creation part of it). I am sure I am not 100% spot on, but it might give you a pretty good idea of what the idea is behind Bancor. This could be HUGE!

Wow thanks for making this more clear! I will read more about Bancor but thanks for explaining in so much detail!
Even thought it does sound very interesting and could benefit businesses greatly, and if it is all truly like you described it sounds a bit like Utopia world where people are all friendly and welcoming towards new technologies.  But most people can't even understand Bitcoin yet and how to buy things with it, and now you are asking people to understand each new coin for each new business.... its a difficult proposal for simple minded people...  I do hope that Bancor will succeed, but to me it sounds like it might take years until this becomes successful.  

I will read more about Bancor and will keep an eye on this project, but it does sound like a long term investment.

You're most welcome. Personally I don't think it will take that long. Most people find it hard to say no to discounts. In addition, Bancor makes it easy to create new smart tokens.

P.S. And we haven't even touched the other uses (ETFs, etc).

[oinkoink]

i didn't follow this whole bancor-thing so pls take it easy with me,
one question: one of the main selling points is the liquidity if i got that right but not even eth itself provides good liquidity as seen by the coinbase flash-crash so whats the point again? is this a promise for the future or something? thx!

[leopard2]

can someone post a good explanation on why BNT is sinking every day?

It is simple, ICO flippers are selling to enter into another big project. Bancor is a long term project and token holders will surely benefit from this

Really I think an ICO that goes up 400% the first day, is a lot better than one that goes down 20% like BNT

huge disappointment...

ETH = $3,80 at ICO, now $3  

GNO = $35 at ICO, well over $100 after a few days...

[cjmoles]

can someone post a good explanation on why BNT is sinking every day?

It is simple, ICO flippers are selling to enter into another big project. Bancor is a long term project and token holders will surely benefit from this

Really I think an ICO that goes up 400% the first day, is a lot better than one that goes down 20% like BNT

huge disappointment...

ETH = $3,80 at ICO, now $3  

GNO = $35 at ICO, well over $100 after a few days...

Ether opened up at $2.83, dropped  to $0.64 after a few days.....but now at $299.00!

[ngin-x]

can someone post a good explanation on why BNT is sinking every day?

It's because there is a flaw in the Bancor model and it's allowing the whales to game the system & take profits. Whales are buying at the exchange and selling to the contract small bit by bit due to the price discrepancy.

This drop will continue till the 120k ETH floor is completely gone. Then nobody knows what will happen. BNT can go into a free fall and never recover or it can start rising again. Nobody knows for sure because nobody can predict the market.

[dz4505]

can someone post a good explanation on why BNT is sinking every day?

It's because there is a flaw in the Bancor model and it's allowing the whales to game the system & take profits. Whales are buying at the exchange and selling to the contract small bit by bit due to the price discrepancy.

This drop will continue till the 120k ETH floor is completely gone. Then nobody knows what will happen. BNT can go into a free fall and never recover or it can start rising again. Nobody knows for sure because nobody can predict the market.

It is not a flaw.  This is how Bancor model works.  Arbitrage is supposed to even out the discrepancy between the exchanges and the smart contract.

One things I do not understand is why they are doing it bit by bit.  That part puzzles me.

[ngin-x]

can someone post a good explanation on why BNT is sinking every day?

It's because there is a flaw in the Bancor model and it's allowing the whales to game the system & take profits. Whales are buying at the exchange and selling to the contract small bit by bit due to the price discrepancy.

This drop will continue till the 120k ETH floor is completely gone. Then nobody knows what will happen. BNT can go into a free fall and never recover or it can start rising again. Nobody knows for sure because nobody can predict the market.

It is not a flaw.  This is how Bancor model works.  Arbitrage is supposed to even out the discrepancy between the exchanges and the smart contract.

One things I do not understand is why they are doing it bit by bit.  That part puzzles me.

That 120k ETH floor is the flaw. There is a huge incentive for the whales to crash the exchange price below 0.01 ETH and keep buying cheap BNT to sell to the contract because they know the contract price cannot go below 0.01 ETH. Any whale can put up a huge sell wall at 0.01 ETH to make sure the price doesn't go over that while they stock up on BNT.

I feel this is just the beginning, the worst is yet to come.

[dz4505]

can someone post a good explanation on why BNT is sinking every day?

It's because there is a flaw in the Bancor model and it's allowing the whales to game the system & take profits. Whales are buying at the exchange and selling to the contract small bit by bit due to the price discrepancy.

This drop will continue till the 120k ETH floor is completely gone. Then nobody knows what will happen. BNT can go into a free fall and never recover or it can start rising again. Nobody knows for sure because nobody can predict the market.

It is not a flaw.  This is how Bancor model works.  Arbitrage is supposed to even out the discrepancy between the exchanges and the smart contract.

One things I do not understand is why they are doing it bit by bit.  That part puzzles me.

That 120k ETH floor is the flaw. There is a huge incentive for the whales to crash the exchange price below 0.01 ETH and keep buying cheap BNT to sell to the contract because they know the contract price cannot go below 0.01 ETH. Any whale can put up a huge sell wall at 0.01 ETH to make sure the price doesn't go over that while they stock up on BNT.

I feel this is just the beginning, the worst is yet to come.

Haha, pretty funny how you just gave an example on how the floor gave whales reason to keep the price artificially low to profit when the floor is supposed to keep the price of BNT above a certain level.

[D3m0nKinGx]

can someone post a good explanation on why BNT is sinking every day?

It's because there is a flaw in the Bancor model and it's allowing the whales to game the system & take profits. Whales are buying at the exchange and selling to the contract small bit by bit due to the price discrepancy.

This drop will continue till the 120k ETH floor is completely gone. Then nobody knows what will happen. BNT can go into a free fall and never recover or it can start rising again. Nobody knows for sure because nobody can predict the market.

It is not a flaw.  This is how Bancor model works.  Arbitrage is supposed to even out the discrepancy between the exchanges and the smart contract.

One things I do not understand is why they are doing it bit by bit.  That part puzzles me.

That 120k ETH floor is the flaw. There is a huge incentive for the whales to crash the exchange price below 0.01 ETH and keep buying cheap BNT to sell to the contract because they know the contract price cannot go below 0.01 ETH. Any whale can put up a huge sell wall at 0.01 ETH to make sure the price doesn't go over that while they stock up on BNT.

I feel this is just the beginning, the worst is yet to come.

Haha, pretty funny how you just gave an example on how the floor gave whales reason to keep the price artificially low to profit when the floor is supposed to keep the price of BNT above a certain level.

Arbitrage is killing the exchange price, kinda surprising they're not creating a larger price gap between the contract and exchange, but when you're throwing around millions of coins/eth doesn't really matter then i guess 

[Sly21C]

Ether opened up at $2.83, dropped  to $0.64 after a few days.....but now at $299.00!

If you're insinuating that what happened to ETH's $ price will happen to BNT's $ price then I hope you're right. I'm contemplating buying BNTs. My only concern though is the Ethereum network doesn't seem to be able to handle large & concentrated transactions. We've seen it with the BNT & the Status ICOs, whereby the network stopped working or was extremely slow. Since BNT is built to work on top of the Ethereum network, how will the Ethereum's apparent lack of capacity affect BNT in the long run? And therefore affect BNTs $ price?

[coinweis]

Ether opened up at $2.83, dropped  to $0.64 after a few days.....but now at $299.00!

If you're insinuating that what happened to ETH's $ price will happen to BNT's $ price then I hope you're right. I'm contemplating buying BNTs. My only concern though is the Ethereum network doesn't seem to be able to handle large & concentrated transactions. We've seen it with the BNT & the Status ICOs, whereby the network stopped working or was extremely slow. Since BNT is built to work on top of the Ethereum network, how will the Ethereum's apparent lack of capacity affect BNT in the long run? And therefore affect BNTs $ price?

i don't think every coin can like ether have such succeed

[D3m0nKinGx]

Ether opened up at $2.83, dropped  to $0.64 after a few days.....but now at $299.00!

If you're insinuating that what happened to ETH's $ price will happen to BNT's $ price then I hope you're right. I'm contemplating buying BNTs. My only concern though is the Ethereum network doesn't seem to be able to handle large & concentrated transactions. We've seen it with the BNT & the Status ICOs, whereby the network stopped working or was extremely slow. Since BNT is built to work on top of the Ethereum network, how will the Ethereum's apparent lack of capacity affect BNT in the long run? And therefore affect BNTs $ price?

speed of the network only affects speed of transactions, no real correlation to price, unless the market mentality feels the value of the coin should reflect that technical drawback.
Otherwise, BNT's transfers will remain limited by ETH's functional capacity, unless the team decides to make BNT it's own network separate from ETH. But afaik ETH has some new features coming awaiting activation that should improve ETH's performance.

[Paracelsus]

can someone post a good explanation on why BNT is sinking every day?

In most easy and simple word it can be explained as accumulation all what is happening right now. If you are holder then keep holding and don't shake your hands now as good times are coming soon. It is big project which will not fall like this easy.

Accumulation? I do not think so everybody had a chance to get involved and it seems that sometimes most successful ICO is not best in terms of investment returns.. But still it is too early for this kind of talk. This is all because of fear and dubts.