What is Bancor Network Token (BNT)?
Bancor is a blockchain-based platform that acts as software that incentivizes network participants to add crypto funds to liquidity pools. The protocol enables users to exchange and swap cryptocurrency between users while adding liquidity to the crypto markets without the interference of financial institutions or third parties. Bancor Network Token (BNT) is the protocol’s main cryptocurrency.
By offering rewards for adding liquidity to different pools, Bancor uses an automated market maker mechanism that provides more liquidity to various markets while users can regulate and maintain liquidity pools with cryptocurrency deposits.
What makes Bancor Network different from other similar AMM networks in the DeFi market is the ability to connect to other networks, like Ethereum and EOS. For now, Bancor users can connect to these two networks to add more liquidity for executing trades within the Bancor software, while there will be more compatible networks added in the future.
How Does Bancor Network Work?
Bancor Network operates via the AMM process so that whenever a trade is executed on the platform, the system converts the cryptocurrency to BNT, the protocol’s token. By automation, the next step in the process allows liquidity providers who deposit funds to a pool in the system to collect rewards in the form of a percentage of the trading fees paid by traders on the network.
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The conversion of cryptocurrencies is executed through cross-chain operations, while users and network participants remain in charge of their private keys and retain ownership over their balances. The cross-chain structure allows Bancor to connect users to other platforms, like Ethereum and EOS. With such a mechanism, Bancor becomes a multi-platform liquidity solution that will be used for interoperability with other platforms in the future.
BNT is used as an intermediary for exchanging other tokens and cryptocurrencies, supporting the AMM system. Unusually for an AMM, Bancor allows users to add a single token to a liquidity pool, instead of adding pairs as is the case with similar DeFi protocols. This is why Bancor is a unique platform for exchanging tokens swiftly and within a user-friendly ecosystem.
The system uses another token, ETHBNT, introduced to the network in 2020 with the second version of the protocol. The token represents shares of BNT and ETH in Bancor/Ethereum pools.
Who Are the Founders of Bancor Network? (History of Bancor Network)
Bancor might not be the most unique DeFi protocol, but it is certainly one of the first AMM platforms in the market. Bancor Network launched in 2017 when the DeFi sector was still taking baby steps towards the radical development and demand we see today.
The Bancor project was co-founded by Galia and Guy Benartzi, while the list of investors includes Tim Draper, a partner in Draper Fisher Jurvetson investment firm. The project raised $153 million in a token sale that was organized and managed by Bprotocol Foundation. Half of the tokens sold were said to be distributed to investors, over 11,000 of them, and the rest were distributed to the dev team for grants and operating budget.
In 2020, the dev team released the second version of the protocol, Bancor v2, which arrived with improvements such as impermanent loss insurance and single-sided exposure. The team continues to work on developments with further plans to add support for more networks.
What Makes Bancor Network Unique?
Bancor is not the only blockchain-based software that incorporates an AMM mechanism into the system. However, Bancor is among the first protocols of its kind. It is unique thanks to the seamless conversion of tokens which the platform facilitates without the interference of third parties like financial institutions. This system allows users to keep custody and ownership of their funds, enabling easy management of traded cryptocurrencies.
The uniqueness of Bancor is also reflected in its technical capacity to maintain self-governing liquidity pools where users can deposit their funds to earn rewards and trading fees. Bancor connects users to other networks as well, creating an automated ecosystem for trading.
What Gives Bancor Network Value?
Bancor Network value is reflected in its technology, technical capacity, utility, and the number of active users on the network. The fact that Bancor allows seamless trading and exchanging of various tokens with interoperability and compatibility with other networks is what gives Bancor value as a DeFi project.
The intrinsic value of Bancor drawn from its technology and use cases often doesn’t coincide with the market price of Bancor Network Token, as the market value of BNT is affected by a multitude of factors and elements. Bancor price may be affected and influenced by factors such as the activity of the dev team, upgrades and updates, developments like the launch of Bancor v2 and the BNTETH airdrop, partnerships, mergers, and other important events.
How Many Bancor Network (BNT) Coins Are There in Circulation?
There are currently BNT in circulation out of a total of BNT. There is no capped max supply for BNT as the protocol employs an elastic supply to provide protection against impermanent loss. Bancor invests BNT in pools to cover the cost of this with swap fees, but if these aren’t enough to compensate liquidity providers, more tokens are issued, increasing the BNT supply.
The number of Bancor coins in circulation multiplied by the current market price equals the Bancor market cap. The market cap determines the rank of BNT in comparison with other cryptocurrencies and also defines its market share and dominance.
Other Technical Data
Liquid Tokens, or AMM smart contracts, can maintain price stability through the “reserve ratio” between the Liquid Token’s total value and the value of its reserve pool. This was initially a fixed ratio, or Constant Reserve Ratio. In 2020, a Dynamic Reserve Ratio was introduced, allowing the ratio to be altered algorithmically.
Furthermore, Bancor also supports virtual cryptocurrencies that are compatible with ERC-20 tokens. In this system, each ERC-20 token is pegged to its corresponding smart contract, while BNT is exchanged between the two ERC-20 tokens as an intermediary smart token. This way, Bancor Network Token takes on the role of a central bank, adding to the process of automation in the liquidity system that depends on users who deposit their funds for added liquidity.
How is the Bancor Network Secured?
Bancor Network is secured through audits and formal verification to prevent malicious attacks and to ensure that smart contracts are operating smoothly and securely. Security audit firms such as ConsenSys Due Diligence, CertiK, PeckShield, and Halborn are in charge of tracking bugs and security checks, while Bancor also has a bug bounty program where users can find and report bugs in exchange for compensation. Security audits ensure liquidity protection and proper governance.
The liquidity pool system is secured by network participants who deposit their funds to add liquidity for trades on the network within an automated process.
How to Use Bancor Network
Bancor is used for trading various micro-tokens and ERC-20 tokens across the network and other platforms such as EOS and Ethereum via interoperability. Bancor also allows liquidity providers to earn rewards and trading fees proportional to the amount of tokens they stake in liquidity pools. Bancor enables fast and secure, liquidity-induced trading based on automated processes and algorithms that facilitate a user-friendly ecosystem for traders.
No registration or verification is needed to start trading on Bancor Network. There are no entry barriers and users can trade their tokens at the best available prices as tokens are locked in pools to be sold at a specified market value.
How to Choose a Bancor Network Wallet?
BNT can be stored in Bancor’s own Unified Wallet, a non-custodial wallet where users can manage their ERC-20 and EOS tokens and perform conversions between them. As BNT is an ERC-20 token, it can also be stored in any other wallet that supports Ethereum and the type you choose will likely depend on how much you need to secure and what you plan to do with it.
Hardware wallets or cold wallets like Ledger or Trezor provide the most secure option for storing cryptocurrencies with offline storage and backup. However, they can require more technical knowledge and are a more expensive option. As such, they may be better suited to storing larger amounts of BNT for more experienced users.
Software wallets provide another option and are free and easy to use. They are available to download as smartphone or desktop apps and can be custodial or non-custodial. With custodial wallets, the private keys are managed and backed up on your behalf by the service provider. Non-custodial wallets make use of secure elements on your device to store the private keys. While convenient, they are seen as less secure than hardware wallets and may be better suited to smaller amounts of BNT or more novice users.
Online wallets or web wallets are also free and easy to use, and accessible from multiple devices using a web browser. They are, however, considered hot wallets and can be less secure than hardware or software alternatives. As you are likely trusting the platform to manage your BNT, you should select a reputable service with a track record in security and custody. As such, they are most suited for holding smaller amounts of cryptocurrencies or for those making more frequent trades.
Kriptomat offers a secure storage solution, allowing you to both store and trade your Bancor Network Tokens without hassle. Storing your BNT with Kriptomat provides you with enterprise-grade security and user-friendly functionality.
Buying and selling BNT, or trading it for any other cryptocurrency, is done in mere moments when you choose our secure platform as your storage solution.
Bancor Network Staking
Bancor is hosted on the Ethereum network, which means that the token is not mineable. Ethereum backs the Bancor software with the use of the Proof of Work protocol that relies on miners. Ethereum is making a transition to the more efficient Proof of Stake with the completion of the biggest ETH update, Ethereum 2.0.
BNT can be staked in liquidity pools to support the execution of fast conversions on the network. In this system, liquidity providers are rewarded with a percentage of swap fees proportional to the number of tokens staked in a pool.
Bancor is not the only DeFi project that offers AMM trading and token swaps but it is certainly one of the oldest and most established in the sector. As one of the leading projects in the new age of decentralized financial systems, Bancor allows instant and fast trades while working on new improvements. The team also provides a non-custodial wallet for users to seamlessly connect to EOS and Ethereum and trade with over 500 tokens from any device.
Despite an array of similar protocols in the market, Bancor still manages to stay among the top AMM software.
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Bancor Network Token FAQ
How to buy Bancor Network Token?
Buying BNT is as easy as visiting Kriptomat’s how to buy Bancor Network Token page and choosing your preferred method of payment.
How to sell Bancor Network Token?
If you already own BNT and hold it in a Kriptomat exchange wallet, you can easily sell it by navigating the interface and choosing your desired payment option.
Bancor Network Token Price?
Bancor Network Token price is in constant flux and is subject to frequent, often radical changes. BNT prices can experience major rises or dips within a relatively short period due to the volatility in the cryptocurrency market. You can follow up with live BNT prices on Kriptomat.
As well as traditional factors such as market sentiment, the flow of assets on exchanges, and the economy in general, the price of BNT is also affected by its elastic supply and demand from liquidity providers.
The current Bancor Network Token price is EUR.
The 24-hour trading volume of BNT is EUR. BNT is currently ranked of all cryptocurrencies by total market cap, with a market cap of EUR. It has a circulating supply of and a max supply of .
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