ICO Bancor Protocol
Bancor is a platform built on Ethereum that enables anyone to launch tokens–called “SmartTokens” in the protocol–backed by crypto-token reserves, such as ETH. These SmartTokens can be freely traded and even used as the crypto-token reserves for issuing other tokens. The reserves are locked in a smart contract. Users specify the ratio of SmartTokens to their reserve tokens when they launch, and this determines the price at which the smart contract will issue new SmartTokens (if the reserve grows) or redeem SmartTokens for the reserve tokens. and this establishes a price at which the smart contract will exchange SmartTokens for reserve tokens issue new SmartTokens. The smart contract underneath each SmartToken functions essentially like a distributed “central bank” with predictable monetary policy.
The Bancor Protocol™ enables the creation of networks of smart contract-based “Smart Tokens™.” Smart Tokens™ hold balances of one or more other tokens--“Connectors”--and have a builtin autonomous conversion mechanism that allows any party to instantly purchase or sell the Smart Token™ for one of its Connectors, directly through the Smart Token™ contract, at a price calculated by a formula which balances buy and sell volumes.
Bancor believes that Smart Tokens™ can address the challenge of liquidity2 faced by conventional tokens, cryptocurrencies, and community currencies on three levels. First, and most fundamentally, by being autonomously convertible for their Connectors, and with an unconstrained supply that grows in response to purchases, each individual Smart Token™ has built-in liquidity that does not depend on counterparties or exchanges. Second, Bancor has developed specialized Smart Tokens™ that enable inter-convertibility between any two other Smart Tokens™ or, with an added step, between any Smart Token™ and any conventional Ethereum network token. Third, Bancor’s ultimate vision is that users will create their own tokens and community currencies in the form of Smart Tokens™ that hold a common Connector, enabling any Smart Token™ in the network to be converted into any other.
Bancor’s own Smart Token™, BNT, is the common Connector in the first such network, which we call the Bancor Network™. The Bancor Protocol™ is named in honor of the Keynesian proposal3 to introduce a supranational currency called Bancor to systematize international currency conversion after WWII.