Bancor (BNT): A Solution In Cryptocurrency Liquidity
By: Bruce Hunt
Tags: Research, Ethereum, Cryptocurrency, Blockchain, Bancor

Bancor is a cryptocurrency and decentralization protocol startup out of Switzerland. The protocol hopes to solve liquidity issues with smaller market cap tokens that rely on current centralized and regulated exchanges to be liquid. The intention is to generate a platform that anyone can use to generate peer to peer trades through a smart token system. Smart Tokens will allow this buy being held with a reserve and contract supply of each ERC-20 compatible token available. What does that mean? Each of these tokens will allow the supply of other tokens to become greater or less depending on whether the user chooses to hold or liquidate the smart tokens.

“The Bancor protocol enables anyone to create a new type of cryptocurrency called a Smart Token™, which can hold (and trade) other cryptocurrencies.”

Bancor was founded in 2017 by Guy Bernartzi and three other individuals. Guy had recently exited as founder and CEO of the largest mobile social gaming developer in Israel, Mytopia and a stint co-founding Ecko Code with famed designer Marc Ecko. He is active as an investor and advisor in several technology sectors including blockchain, fintech, digital products and life science.

“ Bancor represents the first technological solution to the “Double Coincidence of Wants” problem in the domain of asset exchange.”

The need for this product is realized when understanding the “Double Coincidence of Wants” which is essentially the degree of difficulty in finding two parties with opposite wants, at the same time, in order to complete an exchange. For instance, I want to sell an antique for a certain value and the trick is then finding the correct buyer who wants the antique enough that they will pay the price.

“ By solving the liquidity challenge which most currencies face, Bancor enables the long tail of user-generated currencies to finally emerge.”

None stands out to me, of the Bancor team, so much as Eyal Hertzog. Eyal is one of four Co-founder and has a successful past with his endeavors as Founder of Metacafe. Metacafe is a video sharing platform that was the fastest growing in Israel at a peak of 50 million unique visits at its peak. As a strong believer in the strength of a projects community I see this as a key attribute that will bring people to learn what Bancor is and eventually utilize it. In this age of technology we have seen these powers put to use and grow a brand.

Bancor has a secret weapon in its ability to enable “Long Tail”. Long Tail is a description of content and products that do not have great demand and typically have low sales volume. However, these long tail products summed together make up a share of the market that exceeds that of the top performers in said market. For instance, all of the twitter accounts with 100 followers makes a greater supply than the top 100 accounts total follower count. For long tail to become prevalent in cryptocurrency liquidity issues and technical road blocks must be negated.

Bancor seems likely to be in direct competition with the 0X protocol that aims to solve these liquidity issues with a similar decentralized peer to peer token exchange on the Ethereum blockchain. While 0X has many other projects adopting its protocol some of those projects have also partnered with Bancor. Bancor also boast partnerships with many other projects such as Status, Gnosis and NEO. While it is clear how Bancor will allow the exchanges to take place token to token the case is not as clear for the solution 0X has offered.

With the ICO raising a total of 396,720 Ethereum and distributing 39.6 BNT tokens the project looks primed to succeed in executing their roadmap late 2017 and into 2018. The budget plan is conservative and details can be found at the link I’ve provided below. The team plans to keep 20% of the raised Ether in a reserve and a whopping 40% will go to software development. The remaining 40% of funds raised are spread through marketing and business development, legal expenses, operational costs and miscellaneous expenses. This is in line with what I deem appropriate allocation in this space. The BNT tokens generated will be distributed to ICO participants as 50% of the total supply of 79,384,422. The remaining portions will be split as follows; 20% to Community Grants/Partnerships/Bounties, 20% to Long-Term Foundation Budget, and 10% to the team, advisors and early contributors.

The road map appears to be achievable and the team has released many features and is demoing several others for the private chain. There are numerous release slated and in the next six months this project should be nearing full implementation. You can find further detail at the roadmap link I have provided below.

Website:

https://www.bancor.network/

Fundraising:

https://www.bancor.network/fundraiser

Road Map:

https://trello.com/b/8SaOatUe/bancor-product-roadmap

Twitter:

https://twitter.com/BancorNetwork

Bancor CoinMarketCap

https://coinmarketcap.com/currencies/bancor/#markets