About Bancor Network Token (BNT)

Built on the Ethereum blockchain, Bancor is a decentralized exchange (DEX) where smart-contract-enabled coins change hands without intermediaries.

BNT (Bancor Network Token) is the platform’s native token. An ERC-20, BNT serves as a common denominator for facilitating trades, according to Messari. As the reserve token of Bancor, BNT is designed to hold reserves of other tokens connected with smart contracts, Ethereum or otherwise.

DEX is a broad term. More specifically, Bancor uses automated market maker (AMM) smart contract technology to autonomously foster liquidity. In fact, Bancor is considered the first-ever AMM, paving the way for Uniswap (UNI) and its clone, Sushi (SUSHI).

Traditional market making involves buyers and sellers getting paired up; in the old days, such activity was performed by a trading floor point man in a smock, and, in more recent decades, by computers. This old way of doing things is rendered obsolete in this protocol's use case, underscoring the inherently disruptive nature of decentralized finance (DeFi).

Trades get routed not to matchmakers but, instead, to liquidity pools found on the network. Traders who provide liquidity to the pools are rewarded for their contributions; trades that pass through the pools generate revenues paid out to liquidity providers via pool tokens representing their slice of the rewards pie. Bancor users are incentivized to create and maintain pools, making crypto markets exponentially more liquid.

Users can stake their BNT into any trading pair pool available on the Bancor network to earn rewards and a portion of trading fees, according to the Bancor white paper.

Describing a cross-chain liquidity mechanism for tokens on smart contract blockchains, the creators refer to BNT as being “Smart Tokens,” allowing users to instantly buy/sell connected tokens “directly through the Smart Token’s contract, at a price that is continuously recalculated to balance buy and sell volumes.” Already on the Ethereum and EOS blockchains, Bancor can be integrated into any smart contract-enabled blockchain.

One of the most established AMMs, Bancor was founded in 2017 when the DeFi realm was still in its nascence.

Per the white paper, the protocol is named in honor of a never-adopted 1944 proposal from economist John Maynard Keynes who wanted to systematize international currency conversion by introducing a supranational reserve currency called Bancor.

Bancor the blockchain protocol was co-founded by Guy and Galia Benartzi, among others. The latter co-founded Mytopia, a mobile games studio. Investors in the project include venture capitalist Tim Draper.

BNT’s 2017 token sale raised more than $150 million, considered at the time to be “incredibly impressive,” Coin98Insights said.

Bancor is operated by its community as a DAO (Decentralized Autonomous Organization); it’s managed by a Swiss non-profit.

Key to Bancor Network is the automated pricing, courtesy of Smart Tokens’ built-in automated market makers, meaning, as CoinGecko explained, that the tokens’ smart contracts always buy or sell Smart Tokens from/to any user in exchange for any connector token, as well as any token found in the network. The price comes from the Bancor Formula, responsible for balancing a Smart Token’s supply and demand while also maintaining the ratio between a token’s total value and connector token balances. The creator of the Smart Token configures these ratios, known as connector weights. These are adjustable, with creators either increasing or decreasing liquidity levels. The connector weight indicates price sensitivity. Arbitrageurs balance the gaps when prices, as set intrinsically (by network effect and algorithmic pricing), disconnect from market prices as reflected on external exchanges.

In 2020, Bancor underwent a major overhaul. Bancor 2.0, introduced in 2021, also brought improvements for users. Introduced in November 2021, Bancor’s version 3.0 included several new features and upgrades including the Omnipool, the Infinity Pool and “Instant Impermanent Loss Protection,” Cointelegraph said.

The current price of BNT

As of mid-February 2022, BNT was roughly $2.60, according to CoinGecko. Right around the start of the "crypto winter," BNT was coming off an all-time high near $11. That was January 2018.

With digital assets crashing in the early days of the pandemic, in March 2020, BNT reached its all-time low of $0.12. In November 2021, as Bitcoin touched its record high, near $70, BNT was about $4. It fell 26% in 12 months, as of mid-February.

How is the price of BNT determined

Bancor’s BNT token has a fixed supply: 244 million tokens, all of which are currently in circulation, Coin98Insights explained. At $2.60 per token, that equals a total market capitalization of nearly $700 million.

As time goes on, BNT tokens are gradually distributed as rewards and incentives to attract uses from other DeFi competitors. As the Bancor platform grows, the value of the BNT token will likewise increase, Coin98 Insights said.

BNT has an elastic supply, afforded by the protocol's minting and burning of tokens to maintain trading liquidity levels in Bancor pools. Elastic supply refers to the protocol’s ability to mint and burn BNT as and when required, said Deribit on Medium. This is triggered only under certain circumstances and is made possible due to the exclusive pairing of BNT across all liquidity pools.

What the bulls are saying about Bancor Network Token (BNT)

• We see great potential in the project, ByBit said. Moreover, the platform’s analysts said, “as the Bancor platform grows, the value of the BNT token will likewise increase.”
• WalletInvestor is bullish, predicting 93% growth for the BNT token in the upcoming year. BNT’s value is expected to reach $16.80 by 2026, WalletInvestor said.
• In the long run, Bancor Network has a “huge potential in the DeFi space,” Coin98Insights said. “They have proven the survivability in the last bull run which is valuable evidence to take into consideration. As the crypto market is having stable and sustained growth, Bancor will surely get a bite of share in the DeFi market.”

What the bears are saying about Bancor Network Token (BNT)

• BNT price has not shown any inquisitiveness even in 2022, as it remained weak since the start of the year, Coinpedia said. “With a consecutive generation of lower highs,” per the website, “the altcoin plunged.”
• A Bancor price prediction for 2022 came from Captain Altcoin, pointing out that a majority of experts agree that this bear market will last at least for the first quarter of 2022 before any trend reversals, impacting BNT’s prospects.
• The website Gov.Capital has a Bancor price estimation for the year ahead, one suggesting a bearish run is in store, with the possibility of BNT falling to $1.56.