A 2x BNT price increase . . . what you need to believe

For background, BNT runs as a contract on the Ethereum network. It's an awesome contract in my view which creates a highly liquid autonomous exchange for any token. The contract achieves this by backing the exchange with a reserve token.

BNT, of course, is the first token created on this contract and is backed by a reserve of close to 400,000 ETH raised from their recent ICO.

When the contract is activated (hopefully soon, it's been delayed), anyone holding Ethereum will be able to generate new BNT by sending ETH to the BNT smart contract.

The supply of BNT is unlimited.

As more people deposit ETH into the contract's reserve, the price of BNT adjusts upwards according to a pre-determined formula in the contract explained in the Bancor whitepaper. The reverse is also true.

So, it's relatively simple to work out what the price of BNT in ETH will be for different amounts of net ETH deposited in (or withdrawn from) the contract.

With so many people holding BNT, it's natural to ask what one might need to believe for a given multiple of appreciation of the BNT price in ETH.

For instance, to double the price of BNT, how much ETH (net) needs to flow into the contract?

91,223 ETH (workings in the footer).

So about $32m worth of ETH (at $360) needs to flow in (net of any withdrawals) for the price of BNT to rise from the ICO price of 0.01 ETH to 0.02 ETH.

That's a lot of ETH!

Interestingly, because the supply of BNT is infinite, if you want to believe a 100x price increase, you would have to assume that ~92m ETH would flow into the BNT contract.

In other words, 100% of the circulating supply (as calculated by coinmarketcap anyway). And then how would you pay for gas? :D

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Footer:
Tweaked spreadsheet from the BNT whitepaper: https://docs.google.com/spreadsheets/d/1VtBm-ogOb_14b50jJOMDl31ZlAoMfInwzeJXrMaEOes/edit#gid=877776767