Bancor Network is a decentralized crypto exchange launched in Switzerland in 2016 to allow for the conversion of crypto assets without intermediaries. The exchange; primarily focuses on the DeFi sector by allowing easy integration with Dapps and converting even the least known tokens.
The protocol has made a name for itself in the crypto space due to its interest in the DeFi sector but has also battled several downs like legal challenges and widely publicized hacks. However, it is not backing down anytime soon as it aims to incentivize crypto enthusiasts to keep locking their assets in pools for passive earning of rewards.
The exchange is decentralized and uses an Automated Market Maker (AMM) to facilitate the trading of crypto assets. An AMM is a smart contract common in most crypto DEXs in the DeFi sector since it does not require a central organization to manage its finances. The exchange aims to make crypto assets more liquid by offering incentives to the investors to create and maintain liquidity pools that power the sector.
The exchange works similarly to most DeFi AMMs and exchanges like Uniswap, Sushiswap, and Balancer. Whenever a trade is made on the platform, the tokens are converted to BNT for transactions. The trade then pays gas fees to generate rewards for the liquidity providers (LPs) who locked their BNT tokens on the exchange.
The BNT token also serves as the governance token in the ecosystem. Below is more information on Bancor and its BNT token.
Company Overview
Bancor is one of the pioneers of the DeFi sector. It was launched in 2017 when most crypto services providers were centralized and offered more limited ranges of assets for trading. Guy and Galia Benartzi founded the exchange.
The exchange was built through funds collected from a token sale managed by a Swiss non-profit organization, B protocol Foundation. It raised $153 M in the funding round with nearly 11K investors. At the time, that sale was the largest of its kind. The exchange gave half of the tokens to the sale participants and the other one to the founding team to manage the platform.
The platform came to light well in 2020 (the DeFi year) as the DeFi sector rose through the dark to the forefront of the crypto sector. The exchange now has a newer version Bancor V2 optimized to earn more profits for traders who choose to lock their tokens on the platform (provide liquidity).
The BNT Token
The BNT token is essential in the exchange as it serves as both the governance and the utility token. It facilitates the trading of assets between pools on the exchange. Its supply is also low, making it an excellent asset to hedge against inflation. It can only have 69 million tokens in circulation.
The coin is also listed on other exchanges away from Bancor. Since it runs on Ethereum and EOS, it can also be compatible with any available liquidity pool powered by either of the two networks. It also gains value from its role in tracking the usage of the Bancor platform.
