Bancor (cryptocurrency)

Bancor Protocol is a blockchain-based decentralized exchange that allows users to trade cryptocurrency tokens and earn passive income on their cryptocurrency holdings by providing liquidity to the exchange. Bancor invented the world’s first blockchain-based automated liquidity pool, or automated market maker (AMM),[1] and went on to raise a then-record breaking $153 million at its Initial Coin Offering (ICO) in June 2017.[2] As of April 2022, Bancor has over $1bn in Total Value Locked (TVL) and generates an average of $60 million per month in fees for liquidity providers.[3] Holders of the protocol's native token - The Bancor Network Token (BNT) - are able to vote on protocol's governance, making it a Decentralized Autonomous Organization (DAO).

Bancor
IndustryCryptocurrency
Founded2016
FoundersGalia Benartzi, Guy Benartzi, Eyal Hertzog, and Yudi Levi
Headquarters
Zug, Switzerland (with R&D in Tel Aviv, Israel)
Websitewww.bancor.network


History

The Bancor Protocol Whitepaper was first introduced on February 13, 2017, by founders Galia Benartzi, Guy Benartzi, Eyal Hertzog, and Yudi Levi.[1] Bancor’s network is registered in Switzerland.[4] The protocol's name derives from John Maynard Keynes’ currency conception called the “International Clearing Union (ICU)” which proposed a supra-national currency referred to as “Bancor”, an idea to redevelop the system of international trade in the 1940s.[5][6]

Bancor began with the creation of “Smart Tokens”, also called automated liquidity pools, decentralized liquidity pools, or bonding curves, which can hold one or more tokens or digital assets in reserve directly via their blockchain-based smart contract.[7][8]

On April 3, 2018, Bancor launched a non-custodial cryptocurrency wallet that converts between tokens in the Bancor Network instantly.[9][10]

In June 2018, Bancor launched a pilot project in Kenya to enable blockchain-based community currencies.[11] The digital community currencies worked on an open-source system called the POA Network (a sidechain of Ethereum) that Bancor used to facilitate low transaction costs in instances of community currencies.[11] The transactions that take place on POA are verified by a group of licensed notary publics in the U.S. who earn a fixed commission for maintaining the network. Each of the community-currency trades are recorded on their own subnetwork, then grouped together and submitted to the main POA Network to reduce transaction fees.[6]

From its inception through 2019, the Bancor Network has processed more than $1.5 billion in cryptocurrency trades.[6]

Hack and criticisms

On July 9, 2018, a cryptocurrency wallet on Bancor’s network was compromised, which led to the theft of $12.5 million worth of Ethereum and $1 million worth of Pundi X. Hackers stole $23.5 million originally, however, $10 million was recovered and no customer wallets were breached.[12]

Foundation

The Bancor Foundation, which offers grants and technical support to developers and organizations building applications using the Bancor Protocol, was originally chaired by Bernard Lietaer.

In July 2019, the Bancor Foundation commemorated the 75th anniversary of the Bretton Woods Conference where the original “Bancor” currency concept was proposed by hosting an event at the Mount Washington Hotel in Bretton Woods, New Hampshire (the original location of the 1944 conference).[13]

References
  1. "This Blockchain Entrepreneur Is Reimagining Value By Putting Empathy First". Forbes. Retrieved July 8, 2020.
  2. https://qz.com/1004892/the-bancor-ico-just-raised-153-million-on-ethereum-in-three-hours/
  3. https://dune.com/projects/bancor
  4. "Israel's blockchain blockbuster". CNBC. Retrieved July 9, 2020.
  5. "After blockbuster ICO, Bancor takes first step to become 'YouTube for currency'". Venture Beat. Retrieved July 8, 2020.
  6. "Closing the Cash Gap With Cryptocurrency". Bloomberg. Retrieved July 9, 2020.
  7. "Digital Token Project Raises Big Money in Initial Coin Offering". Fortune. Retrieved July 9, 2020.
  8. "Deconstructing Decentralized Exchanges". Stanford Journal of Blockchain Law & Policy. Retrieved July 9, 2020.
  9. "Bancor launches a cryptocurrency wallet that converts instantly between tokens". Venture Beat. Retrieved July 9, 2020.
  10. "Bancor takes on Crypto exchanges with wallet that converts across tokens". Tech Crunch. Retrieved July 9, 2020.
  11. "Bancor launches blockchain platform in Kenya to enable community currencies". Venture Beat. Retrieved July 9, 2020.
  12. "Cryptocurrency start-up suffers 'security breach,' theft of $13.5 million worth of digital tokens". CNBC. Retrieved July 9, 2020.
  13. "Can Crypto Change 75 Years of Money?". YouTube. Retrieved July 10, 2020.
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