BNTUSD
Bancor Network Token / United States dollar
crypto

Bancor is a decentralized exchange (DEX) built on the Ethereum and EOS blockchains. The Bancor protocol employs an automated market maker (AMM) smart contract to facilitate token trades against token liquidity pools without matching buyers and sellers. It has a built-in token called BNT that serves as the common price token to fulfill trades among other smart contract tokens. A portion of total trading fees are distributed to Liquidity Providers, or LPs, that deposit tokens into Liquidity Pools. Trading fees also protect user deposits from Impermanent Loss while minted and burned BNT supply maintains the constant market function for continuous token pricing. While Bancor already exists on Ethereum and EOS, it can be integrated into any smart contract-enabled blockchain to provide cross-chain liquidity. Bancor Network Architecture Bancor integrates a series of smart contracts to convert tokens on and across blockchains. Users access the Bancor Network contract to discover prices and buy, sell, or deposit tokens. Liquidity Pools store token reserves supplied by Liquidity Provider deposits that fulfill the conversion, or exchange, function. All trades require token fees paid to each Liquidity Pool that are distributed to Liquidity Providers according to their share of the pool. Smart Tokens The protocol uses Smart Tokens which have one or more connectors holding the balance of other tokens. Smart Tokens are ERC-20 compliant with additional logic to allow users to buy and sell them directly by depositing or withdrawing the connected token. Bancor uses BNT and a stable version, USDB, as the protocol's Smart Tokens. The price at which they are exchanged is determined based on a fixed ratio between the value of the Smart Token and the value of the connector balance. The weight affects the price elasticity between the tokens and a higher weight leads to less volatility and vice versa. A weight of 100% represents a stable peg to the connected token as the price does not change. The BNT token connects all of these processes to convert tokens. Each BNT SmartToken is managed by a single BancorConverter to calculate the BNT amount required to exchange for another token. Upon calling the convert function for two non-BNT tokens, the Converter calculates and calls the amount of both tokens, denominated in BNT. By denominating converted tokens in BNT, Bancor can efficiently exchange any one token for another, given they are registered in the protocol. The supply of BNT is elastic to facilitate token liquidity on the exchange and protect users from common exchange risks. As tokens move into Liquidity Pools, BNT is minted proportionately. Simultaneously, BNT is burned as tokens move out of Liquidity Pools. This action limits price slippage as it maintains the user's initial token supply by flexing the BNT supply to convert one token to another. One implementation of a Smart Token is a "relay" which has two connected tokens each with a weight of 50%. Anytime a trade occurs that shifts the supply of the connected token, the prices adjust to re-balance. Liquidity Pools Liquidity Pools are registered on the Contract Registry through BancorDAO proposals and votes. Once whitelisted, the token's Liquidity Pool, Converter, and BancorFormula are set. The BancorFormula contract is established upon registry to calculate the price and supply for all tokens in BNT reflexively. The formula is the core of the AMM function and adjusts a token's price incrementally as token conversions change the Liquidity Pool supply. This set of smart contracts is open for all users to access and build upon. Developers can use APIs or public interfaces to integrate Bancor contracts into other decentralized applications. These contracts can provide liquid token markets for applications that need permissionless token exchanges. BancorX BancorX is a bridge that facilitates token exchange between the Ethereum and EOS networks. The bridge uses the BNT token to convert smart contract assets across the blockchains. The BancorX software is operated on three servers called Oracles. The Oracles interact with Gate Contracts on Ethereum and EOS. From Ethereum, a user sends BNT to the ETH Gate Contract address with a transaction memo that contains the destination EOS address. The ETH Gate Contract notifies the EOSBNT smart contract to issue BNT to the EOS wallet. From EOS, the user sends a transaction memo with the destination ETH address and EOSBNT to the EOS smart contract. The EOSBNT smart contract notifies the ETH address to release the BNT balance and destroys the corresponding EOSBNT amount. The BancorX architecture is designed to be ported to other smart contract-enabled blockchains. Each new blockchain requires unique BancorX oracle addresses. The new blockchain must allow the BancorX oracle to monitor, generate, and transmit new transactions on the new blockchain.