Quite interestingly, in the past three years, Cryptoshere has been witnessing the mushrooming of Token Swap dApps. This evolution has had a tremendous influence leaving in its track innovations, variety of choices coupled with financial privacy and freedom.
There is one project in this DEX market with a chequered history but has shown resilience and still stands tall. In July 2018, Hackers stole $23 million from the Bancor Decentralized Exchange in a security breach widely attributed to a weak spot in Bancor’s internal network.
At Press time, the network was still battling a court suit in the US Southern District of New York, where the Plaintiff William Zhang is seeking civil damages running over $16 million. Yet, it is this same outfit that holds the record in history for raising the highest amount of $153 million in crowdfunding in the shortest time in 2017.
Despite all these hurdles, the project undoubtedly is one of the famous use cases in Blockchain. Moreover, it has strengthened the Decentralized Exchange market.
Bancor Network At A Glance
Bancor operates like a Digital Asset exchange, although it has some exceptions in the token trading style, which gives it an innovative approach. It is an on-chain liquidity protocol that permits automatic and decentralized exchange on Ethereum and other Blockchains.
Traders are allowed to exchange EOS and ERC-20 tokens across 11,000 tokens smoothly without any blemish with one click. The Protocol is a range of Smart Contracts devised to blend liquidity and execute p2p exchanges in the absence of a counterparty.
Hence, there is no need for you to get a second party to be able to undertake trade. Bancor needs one person to complete an exchange, with the liquidity coming from the Bancor Network Token (BNT), and Smart Contracts that ensure there is an equilibrium among tokens every time.
It is this composition that eliminates the role of exchange in such a transaction as the middleman. You can do all these in the Bancor wallet. By trailblazing the concept of Smart Tokens, BNT is the leader where tokens are used for exchange between other tokens of ERC20 standard, which are stored in their reserve.
However, you can’t buy or sell fiat currency on the Bancor Network Decentralized Exchange. Also, there are no KYC/AML obligations to use the platform. It is on record that this Switzerland based project has completed more than $2 billion in trade volume with thousands of tokens, and millions in transaction charges earned by stakers.
Bancor Staking Rewards
The Bancor Staking is an excellent means to incentivize people to provide liquidity to the platform so that there will be BNT available for trading. The network thrives when there is a constant supply of BNT to fulfill its mandate.
Liquidity providers are, therefore, very essential in this setup. Their reward for the role is getting a share of the Transaction fees. However, there is a proposal that is yet to be voted on by the Bancor community through their DAO. You will need BNT to vote on decisions in the Governance Structure.
If it passes, stakers could earn more based on the pools they are contributing liquidity to and the percentage of ownership in the pools. It is estimated that Stakers would earn 10% of whatever amount they provide.
A couple of months ago, Bancor made it public that they would shortly release Bancor V2. This Protocol, named V2, is going to introduce numerous indispensable use cases. The prediction is that it is going to be a crucial contribution to DeFi.
According to the Bancor team, the focus is on solving impediments to the extensive adoption of Automated Market Makers (AMMs). They are known as Exposure to “impermanent loss”; Exposure to multiple assets; Capital inefficiency or high slippage; the Opportunity cost of providing liquidity.
Pretty fascinatingly, the features V2 will onboard is going to be optional, and those who prefer the use of AMMs will still have the liberty. The Crypto community is eager to see the new configuration, which is likely to hit the space in July.
So far, Bancor has proven its worth and makes a strong statement, testifying the ability to accomplish its mission. Kindly follow them on Twitter, Telegram, or LinkedIn. Join their communities and learn more about the project.