OK, what the fuck is this?
- The Bancor Token (BNT) is like any other coin, it is traded on regular exchanges, and it is subject to the same dynamics that every other crypto is.
- A coin deployed using the Bancor Protocol on the other hand, is a Bancor BASED token that lives WITHIN the Bancor ecosystem, and it is subject to completely different exchange mechanics. The lifecycle of these Bancor BASED Tokens is driven by mathematical formulas, functions and an innovative but also rather complex liquidity solution.
-The use cases vary, but it could be kickstarter for future ICO's that not only need to be deployed fast but also must remain liquid.
- By default, the smart contract works with a certain amount of BNT that will be used as liquidity provider, but ERC20 compliant tokens can be added to the contract too.
- When small communities, fundraisers, ICOs, etc. create a Bancor BASED token for their projects, they buy some BNT to initiate the process, thus raising the value of BNT because of simple demand.
- The only coins that are subject to the contract methods are the Bancor BASED tokens, NOT the Bancor Token itself. BNT only acts as a liquidity provider, and like every other crypto being used for that purpose (ETH for example), it will never be destroyed or altered in any shape or form.
- Those who choose to deploy their projects using the Bancor protocol will instantly benefit from the ability to exchange their tokens instantly for any other token that lives within the Bancor ecosystem already using the contract. It is very unlikely that in the future regular coins and Bancor BASED tokens interact with each other, because the Bancor protocol, as I said before, does not interfere with the current dynamic of the crypto market.
- The Bancor Token itself will perform according to the rules, strategies and dynamics of those who want to speculate with them on one hand, or create value using the protocol on the other.
See? It wasn't that difficult after all.