Case Study: Bancor

Case Study: Bancor

What can we learn from the ICO which managed to collect $153 million in just three hours

Bancor: the main target of the company is to provide standing liquidity as well as asynchronous price discovery through the means of the smart contracts system known as “Smart Tokens”.
Symbol: BGT
Crowdsale period: June 12, 2017 – June 12, 2018 with the crowdsale lasting for 3 hours.
Funds raised: $153 million (396,720 ETH), which made Bancor the third largest initial coin offering of the existing cryptocurrency market.
Country: the foundation board is from Israel, while the Bprotocol Foundation basing in Zug, Switzerland.
Native token: Bancor token (BNT)
Time: there is no information about the project’s investment history.

Team: The foundation staff consists of 21 people and 4 members belong to the Bprotocol Foundation. Bernard Lietaer acts as the council president, who is considered to be “the top currency trader of the world” as alleged by the Businessweek’s. He designed the European Currency Unit and worked on the formation and implementation convergence mechanisms of Common European Currency system in a range of Europen states. That’s why Mr. Lietaer is also famous for being the “Architect of the Euro”. Bernard Lietaer has published a wide range of financial titles, among which are “The Future of Money” and “New Money for a New World”. Guy Benartzi performs as the Chief Executive Officer of the company with the experience on the same position in widely known establishments, for instance, Mytopia and AppCoin projects. Eyal Hertzog being among the foundation members as Bancor is known for co-founding AppCoin and being the forebear of MetaCafe – web resource for sharing video content.

The team working on the issues of software development includes eight employees of the LocalCoin LTD Company registered in Tel Aviv. The Advisory staff consists of nine experts, including the Bitcoin Foundation director Brock Pierce, Yoni Assia, the Chief Executive of the most prestigious international social investment platform called eToro, and, finally, John Henry, belonging to the research experts working for the MIT Media Lab Human Dynamics Group.

Social enterprise Qoin, Status and TokenCard are among the most authoritative and respectful partners of the Bancor environment.

About the project:

The essential target of the Bancor project is to introduce a disruptive protocol giving the participants an opportunity to build liquid “smart tokens” that are powered by the infrastructure of Ethereum smart contracts. The project offers to utilize smart tokens as the form of conversion standard that eliminates the influence of intermediaries in the exchanging process. In practice such approach means the cost of “smart tokens” is calculated automatically through a specific formula. Such method enables to skip matching-bid and ask orders. The price is in the dependance from the purchase and liquidation amounts.

Moreover, platform’s tokens can also function as distributed token baskets (also known as asset baskets) together with Network tokens (multiple and related token networking).

Hence, the main priority of Bancor lies in the creation and maintanence of a globally-accepted reserve virtual currency. This philosophy is rooted in the idea of launching a kind of supranational money with the reserves powered by the separate currencies of every participating nation. Such idea was introduced by John Maynard Keynes.

Features:

Firstly, Bancor is created on the principles of the protocol code openness which allows the platform’s participant to create own Bancor-powered tokens and change them taking into account own demands and needs. At the meantime it will be possible to trade or redeem smart tokens at any moment of time with no platforms commissions.

Secondly, the Bancor’s “smart tokens” are intended to back up the issuance of other tokens acting similarly to the central banking establishment. Smart contract functions as a reservation storage. The tokens, launched by the means of the Bancor platform are supposed to be backed by these reserve tokens providing the liquidity via specific effective mathematical algorithms. Launching the token, its creator defines its value while the smart contract produces other smart contracts. At the same time it can redeem smart tokens using their reserved tokens. Such steps allow ensuring value sustainment of the cryptocurrency.

Arbitrage is the next key peculiarity of the ecosystem. It is used for balancing the smart token and reserve token prices while ensuring the accordance of prices during the external exchanging. The main gap of crypto-exchange prices and the Bancor ecosystem relies in the concept that the purchase of smart tokens causes the increment of their price while selling them results in its lowering. The foundation board expects the participating users to perform as arbitrageurs, but it is not inconceivable that the bots will be responsible for such functions.

Bancor ICO features:

Why did Bancor draw attention of investors?

  1. The project’s protocol is powered by a disruptive and exclusive price discovery algorithm meaning Bancor to be one and only on the current market offering innovative technologies and solutions.
  2. Bancor may become a turning point for the currently existing system on the market because of its ability to solve the problems connected to the liquidity still unsolved by other market players.
  3. The application of the project was completed before the start of the initial coin offering. A demo version can be tested on the testnet. The whole platform was also released prior to the crowdsale.
  4. BNT is backed by Ether so the participants will have an opportunity to trade their tokens for Ethers by the means of the smart contract at any time. It proves the highest level of liquidity of BTN.
  5. The developers of Bancor are high qualified professionals of the area; the project’s whitepaper is comprehensible. In the project’s web resource you can find a roadmap depicting all the further levels and stages of the Bancor development. 



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