Bancor is a blockchain-based platform that functions as software to encourage network users to add cryptocurrency funds to liquidity pools. The protocol allows users to exchange and swap cryptocurrencies among themselves, while also increasing liquidity to the crypto markets without the intervention of financial institutions or other parties. The protocol's primary cryptocurrency is the Bancor Network Token (BNT). Bancor employs an automated market maker technique to supply additional liquidity to multiple markets by paying rewards for contributing liquidity to different pools, while users may govern and maintain liquidity pools with cryptocurrency contributions.

The ability to link to other networks, like as Ethereum and EOS, distinguishes Bancor Network from other similar AMM networks in the DeFi industry. For the time being, Bancor users may connect to these two networks to add extra liquidity for performing trades within the Bancor program, and more suitable networks will be introduced in the future.

History

Bancor may not be the most innovative DeFi protocol, but it was one of the earliest AMM systems on the market. Bancor Network debuted in 2017, while the DeFi industry was still in its early stages of rapid expansion and demand. Galia and Guy Benartzi co-founded the Bancor idea, and Tim Draper, a partner at Draper Fisher Jurvetson, is among the investors. Bprotocol Foundation arranged and managed a token sale that garnered 153 million USD for the project. Over 11,000 tokens were handed to investors, with the remaining tokens distributed to the dev team for grants and operations expenses.

Bancor 2.0, the protocol's second version, was launched in 2020, with enhancements such as impermanent loss insurance and single-sided exposure. The team is still working on improvements, with hopes to expand support for other networks in the future.

How does it work

Bancor Network uses the AMM process to convert bitcoin to BNT, the protocol's token, whenever a deal is made on the platform. The next phase in the process, through automation, permits liquidity providers who deposit cash into a pool in the system to get incentives in the form of a portion of the trading costs paid by network traders. Cross-chain operations are used to convert cryptocurrencies, but users and network participants retain control of their private keys and ownership of their balances. Bancor's cross-chain nature enables it to link users to other platforms like as Ethereum and EOS. Bancor becomes a multi-platform liquidity solution with such a mechanism, which will be utilized for future interoperability with other platforms.

BNT serves as a mediator for the exchange of other tokens and cryptocurrencies, hence assisting the AMM system. In contrast to previous DeFi systems, Bancor allows users to contribute a single token to a liquidity pool, which is unusual for an AMM. This is why Bancor is a one-of-a-kind platform for quickly transferring tokens inside a user-friendly environment. The system employs another currency, ETHBNT, which was added to the network with the second edition of the protocol in 2020. The coin represents BNT and ETH shares in Bancor/Ethereum pools.

Total supply and circulation

Out of a total of 209,090,204.167563 BNT, there are presently 209,090,204 BNT in circulation. There is no limited maximum supply for BNT since the protocol uses an elastic supply to mitigate against temporary loss.