Bancor is one of these new-tech crypto platforms that run on DeFi protocols and takes trading cryptocurrencies to the next level. Bancor’s decentralized liquidity network redesigns how people create and share wealth by providing continuous on-chain liquidity among blockchain-based assets.
- Operating Since 2016
- Cryptocurrencies Supported All ERC-20 format compatible cryptocurrencies
- Fees Vary
- Deposit Methods Simplex
- Fiat Currencies USD, EUR, AUD, GBP, etc.
- Verification Methods KYC
- Margin Trading No
- Futures Trading No
- Simplifying Crypto Trading
- Getting to Know Bancor Network
- Understanding Decentralized and Centralized Crypto Exchanges
- How Does the Bancor Network Work?
- Bancor V2.1
- Single-Sided Exposure
- Impermanent Loss Insurance
- Trading Platform
- Automatic Liquidity
- How Does Bancor Protocol Work?
- Incentivized Staking
- BNT Vortex
- Deposit Methods / Deposit Funds
- Bancor Network Security
- PROS & CONS
- Bancor Network Exchange Review for Australia
- Bancor Network Exchange Review for Canada
- Bancor Network Exchange Review for United Kingdom (UK)
- Bancor Review: Final Thoughts
Simplifying Crypto Trading
At the dawn of crypto trading, there were few options for investors to gain, let alone buy and sell digital goods. Eventually, a wide swath of crypto assets and markets sprung up, but investors could only exchange these coins for altcoins or fiat currency for a while longer.
Bancor is an automatic price calculator. It calculates the amount of tokens a user wants to convert. It then converts the equivalent amount to another token that user chooses. This can be achieved by using the Bancor’s Formula, which calculates the price of a token based on market cap and token liquidity.
Today, plenty of blockchain technology projects focus on dApps and token conversion, but one that stands out among the crowd is Bancor Network with its BNT (Bancor Network Token). You may have heard the name before, as Bancor is one of the more well-known names in the crypto arena with its fair share of successes and legal challenges. But is Bancor something you want to consider for your portfolio?
This Bancor review will outline the strengths and weaknesses of using Bancor for your crypto trading and why BNT may or may not be a lucrative investment.
Getting to Know Bancor Network
Founded in 2016, Bancor arrived as an elegant solution as a cryptocurrency exchange with a decentralized network. The Foundation is headquartered in Zug, Switzerland. It also has a Tel Aviv-Yafo R&D Center, which is located in Israel. The Research Center in Israel developed the protocol. This platform allows traders to instantly exchange a large variety of coins with around 10,000 coin pairs. Bancor’s arrival was long-awaited and met with enthusiasm in the crypto space, as users could complete token conversion with a single click.
Additionally, with Bancor, you no longer need a counterparty risk in the trade, made possible through the Bancor wallet. This approach allowed Bancor to give its users automatic liquidity, a way to put physical value into an investor’s wallet. Never before could you swap coins from your wallet.
Perhaps even more significant, this allows for the complete decentralization of the network. Bancor achieves this by utilizing BNT to facilitate trades.
Bancor’s headquarters are in Switzerland and Israel under the aegis of Guy Benartzi, Galia Benartzi, and Eyal Hertzog. The company’s ICO (initial coin offering) in 2017 gained over 10,000 investors and accumulated over $150 million in purchases.
Understanding Decentralized and Centralized Crypto Exchanges
Our Bancor review would be incomplete without explaining exactly why it was needed in the crypto industry. Let’s do a quick overview of centralized crypto exchanges (CEXs) and decentralized crypto exchanges (DEXs). Both services allow for much of the same trading; however, they perform wildly different in execution and operations.
Centralized Crypto Exchanges
These platforms form the basis of the crypto industry. They act as a hub that contains all an investor needs to buy and sell crypto. Through CEXs, the trading process becomes straightforward but at a cost.
CEXs tend to charge users with trade fees, withdrawal fees, deposit fees, or other action you make while collecting every user’s data. On the other hand, users don’t need much crypto or industry knowledge to get started with a CEX, making them beneficial for growing the industry.
CEXs have all the tools necessary for investors, acting as middlemen between parties. Many centralized crypto exchanges have policies that enforce investors to go through KYC and AML processes and authentication before they gain eligibility to begin ordering.
Decentralized Crypto Exchanges
You can look at DEXs as the antithesis of CEXs. Decentralized exchanges are not bound by the limits of a governing body to facilitate trading. Instead, DEXs use automation or the traders themselves to initiate and follow through on trades. This process led to the origin of P2P or peer-to-peer exchanges.
While many people use DEXs to avoid the trading fees of CEXs, many more flock to them because DEXs offer complete anonymity, as they keep no records of individual users.
All of this brings us back to the main topic of the Bancor review: Bancor operates as an AMM (automated market maker). Utilizing systems already in place, Bancor completes trades and orders, allowing users to maintain total control of their assets without any input.
How Does the Bancor Network Work?
Bancor aims to create the future with its endeavors. The team is always looking forward to growing the way users interact online and exchange crypto. In 2021, Bancor introduced the Bancor V2 and V2.1 systems using gasless voting via Snapchat.
Bancor allowed for more digital assets embedded within the company’s whitelisting policy, letting new coins enter the fray. This shift came with high-end tools that allowed users to exchange coins seamlessly, along with insights, charts, and market analysis.
Bancor started cross-chain integration with EOS, Ethereum and Ripple. However, they plan to build more bridges in the future to be able to provide instant token conversions for many popular blockchains like Bitcoin (BTC), Tron (TRX), USD Coin (USDC), Polygon (MATIC), and Ripple (XRP), as well as other cryptocurrencies and stablecoins such as Terra (LUNA, Dogecoin (DOGE), Cardano (ADA), Shiba Inu (SHIB), and DAI.
Before Bancor V2 was launched, the Bancor team had already begun discussing the changes needed for Bancor V2.1. This update is designed to bring the AMM model up to the next level. It differs from Bancor V2 in that it finally addresses two issues that have plagued AMMs since their creation. These problems are:
- Involuntary Token Exposure
- Impermanent Loss
Bancor’s native token called BNT token is used as the counterpart asset in all Bancor pools, unlike other AMM protocols. The v2.1 protocol coinvests alongside LPs using an elastic BNT supply to support single-sided AMM exposure. It also covers the cost of permanent loss through swap fees from its coinvestments.
Liquidity providers must contribute equal amounts to each asset in the pool for the majority of 1 generation AMMs.
This is not only inconvenient but can also lead to liability if an LP only wants liquidity for one asset or holds only one asset. Bancor v2.1 changes this by allowing LPs provide a single token, rather than an even or determinate pair.
Bancor v2.1 LPS can provide single-sided liquidity exposure by using ERC-20 tokens or Bancor BNT tokens.
Impermanent Loss Insurance
AMMs that are subject to arbitrage opportunities can also suffer permanent loss. This is well-known. If two assets are paired in an AMM product constant, the product of these assets must be constant.
This means that any price fluctuations in an asset will result in changes in the asset’s value. Assets that increase in value are sold, and assets that decrease in value are bought to keep the product constant.
Swap fees can be used in some cases to offset permanent losses. However, these losses may easily outweigh any swap fees paid by the LPs. The LP suffers a negative return if they withdraw their assets.
Bancor v2.1 was created to prevent this from happening and ensure that each LP receives the same amount deposited, plus trading fees. Impermanent loss insurance is a unique way to achieve this.
Impermanent Loss Insurance doesn’t come automatically. It accumulates 1% per day over time and once 100% is reached, it provides 100% protection for funds in the pool.
A 30-day cliff is also in effect. This means that any LP who withdraws capital before the pool has been in use for 30 days or more will suffer the same permanent loss as if they had no insurance. After 100 days, the insurance protection ends and the LP receives 100% compensation for any loss incurred within those 100 days.
If the pool is not sufficient to fully cover losses with staked tokens, insurance can be paid in BNT tokens.
Now to the meat of any Bancor review—how it performs as a trading platform. Bancor utilizes an open-source decentralized crypto exchange, meaning it doesn’t carry any meaningless code that most users don’t engage with. Bancor prioritizes user design, making it one of the most user-friendly crypto interfaces. Bancor cuts no corners, and ergonomics shine over flashy displays.
Users can trade from the desktop website or opt to sell on the go with Bancor’s mobile app, available for both iOS and Android devices.
Bancor exists on the EOS and Ethereum blockchain, enabling users to trade directly from their wallets, converting to other coins whenever they please.
With this interface, Bancor offers over 8,700 trading pairs. Compare this to an industry leader like Binance, a site that only offers 450 pairs at most. The difference lies in liquidity and how much each site can offer.
One of Bancor and BNT tokens’ most significant benefits involves how they bring liquidity to all crypto markets. If users cannot sell a currency for a dollar value, it risks fading into obscurity. Bancor is where you’ll find the majority of trading volume for the BNT token. You can also purchase it on Binance or Coinbase, but trade volumes are very low.
While many top coins (e.g. Ethereum, Ripple, Litecoin, and more) have more than adequate trading volumes, Bancor Protocol offers a landmark solution that allows any coin to attain liquidity. Even privately created coins can benefit from this system regardless of their trade volumes. Doing this makes even the most minor coins more viable, forwarding the adoption of decentralized applications.
Many dApps come with their tokens, and Bancor users can access them with a single click.
How Does Bancor Protocol Work?
Another staple in the Bancor review is Bancor Protocol. Many traders shrug at the idea of yet another decentralized exchange due to centralized exchanges and their firm grip on clientele. Likewise, there are plenty of liquidity providers for many coins out there.
These are all sound arguments. However, Bancor is not just any DEX. Bancor doesn’t just provide liquidity, but it bolsters it for any token. Additionally, Bancor allows for a platform where you can exchange any cryptocurrency without a counterparty.
No other interface offers these unique traits. For example, if you were to exchange US dollars (USD) currency for Canadian dollars (CAD), there must be someone on either end of the transaction. With Bancor, users can sell before a buyer meets the offer.
How does this work? BNT token’s smart contracts facilitate a balance between coins and orders. After completing any trade, a BNT balance is leftover in a smart contract.
This process doesn’t just simplify and speed up trades for users—it also removes the need for a third party to carry out transactions. With Bancor, you can continuously exchange your currencies for any EOS or ERC20 tokens (a.k.a. smart tokens) from your wallet.
Another analogy for the system is that it works like an hourglass. Regardless of how you turn it and for how long, the same amount of sand resides inside. The hourglass is like the BNT smart contract, and the grains of sand represent the tokens users trade.
Bancor’s team plans to introduce a development marketplace for dApps featuring the use of BNT smart contracts.
BNT staking gives users the incentive to provide liquidity for Bancor’s network. As per the framework, Bancor needs liquidity to offer lower transaction fees and increase trading volume. By providing lower charges and improving the total network charges and volume from trades, Bancor invites its users to engage with the base functions of the exchange more.
Additionally, users receive BNT for holding BNT in an existing liquidity pool like MKR/BNT or ETH/BNT. This system has projected thousands of new users and beginners since its implementation. Notably, this rewards system aims to keep incentives outside small pools instead of distributing them across dozens of network pools.
The Bancor vortex, or vBNT, works as an additional token for users staking BNT. You can trade your vBNT or leverage it against the liquidity pool, allowing you to gain more when the potential trade occurs. vBNT is why users can add liquidity to pools, and it also allows users to vote on Bancor’s future updates.
You can only leverage this coin against EOS or ERC20 tokens.
Deposit Methods / Deposit Funds
The exchange’s main focus is crypto-to-crypto trades. The exchange has a partnership with Simplex that allows fiat currency funding for USD, EUR, AUD, GBP, etc.
Simplex is an Israeli payment service company. Simplex partners with Bancor Network users to allow them to buy Ethereum using payment methods such as credit card or debit card, or PayPal. Simplex is a third-party, so you will need to pay a fee to use it to buy Bancor or other crypto. Simplex charges 3.5% for each trade. Simplex charges 3.5% per trade if you wish to purchase Ethereum at USD 10,000.
BNT cannot be purchased through Bitcoin/USDT, Tether/USDT, or Tether/BTC. However, it can be traded using USD as a futures option.
Bancor Network Security
Next, to wrap up the Bancor review, we need to discuss security.
DEXs can be tricky in terms of security because they act as non-custodial entities and do not store data. Because exchanges of this type are decentralized, their servers are spread apart. If a foreign agent attacks a server, the attack will stay on that server alone.
Because there’s nothing for a hacker to steal, many believe decentralized exchanges get attacked less. Still, individuals can potentially track users based on private keys used to unlock their offline hardware wallets.
In 2018, hackers got to a single crypto wallet, and the platform lost $23.5 million. Bancor acted quickly to contain the issue, but, Bancor’s reputation has never been the same since the incident. Bancor has worked tirelessly over the last four years to rebuild and reshape its reputation into what it once was.
PROS & CONS
- Supports a wide variety of tokens
- Utilizes a low-risk and effective infrastructure
- Competitive trading costs
- Relatively low fees
- Very user-friendly interface that allows users to convert tokens easily.
- Taker fee and maker fee are zero
- No support for fiat currencies, bank account, and bank transfer
- Best handled by those familiar with Ethereum
- No option for margin trading
- Doesn’t support an order book
Bancor Network Exchange Review for Australia
Are you an Australian crypto trader looking for a great crypto exchange? Then you might want to try Bancor!
Bancor is a decentralized protocol that allows developers, traders, liquidity providers and liquidity providers to easily exchange tokens and authenticate with an API key. With just one click, users can exchange over 10,000 pairs.
In memory of John Maynard Keyes, the name Bancor was given. John referred to “Bancor”, as a global currency, in his 1944 presentation at the Bretton Woods conference on International Trade of Balance.
The Bancor Foundation founded it in 2016. The Foundation is headquartered in Zug, Switzerland. It also has a Tel Aviv-Yafo R&D Center, which is located in Israel. The Research Center in Israel developed the protocol.
Bancor allows users to quickly swap tokens between two pairs. It also creates an autonomous liquidity platform without the need for a counterparty.
Its basic token, BNT can be used within the network to make transactions. To ensure transactions, the platform works in a decentralized and frictionless manner.
Bancor Network Token is well-known for being the standard for the introduction and use of Smart tokens (ERC-20 compatible tokens) These ERC-20 tokens can be converted in your wallet.
It is a DEX network, which means it allows P2P transactions seamlessly. The protocol’s liquidation is done by smart contracts.
The BNT token allows for the conversion of smart tokens that are linked to smart contracts. The token conversion takes place within the wallet, and the user decides the terms. The token’s main purpose is to be universally usable by all users, newbies included.
Bancor is an automatic price calculator. It calculates the amount of token that a user wants to convert. It then converts the equivalent amount to another token that user chooses.
This can be achieved by using the Bancor’s Formula, which calculates the price of a token based on market cap and token liquidity.
The Bancor protocol addresses the problems of low liquidity, poor adoption and insufficient liquidity in the crypto space. It was difficult to exchange tokens before Bancor. The protocol automates liquidity and makes it easy to do so without any hassles.
Bancor can seem intimidating to new users at first. The Bancor wallet is easy to use. You don’t need any technical knowledge to make your exchanges. The team also aims to make the platform easy-to-use for both small and large investors.
Now, if you don’t feel like giving Bancor a shot after reading this review, then here are the other alternatives to buy Bitcoin in Australia.
Bancor Network Exchange Review for Canada
Bancor, a decentralized protocol, allows liquidity providers, developers, and traders to quickly exchange various tokens. Users can exchange more than 10,000 token pairs in just one click.
John Maynard Keyes’s memory was honored by the tagging of Bancor. John described “Bancor” in his 1944 presentation to the International Trade of Balance conference at Bretton Woods as a worldwide currency.
It was established in 2016 by the Bancor Foundation. The Foundation’s headquarters are in Zug in Switzerland and its R&D Center is in Tel Aviv Yafo, an Israeli city. The Research Center in Israel created the protocol.
Bancor network allows users to swap quickly between tokens. The Bancor network also allows for autonomous liquidity, without the presence of any counterparty.
The basic token, called BNT, can be used to transact within the network. The platform is decentralized and frictionless, while the BNT token ensures transactions.
Bancor Network Token has been a popular standard for the introduction “Smart tokens” and EOS compatible tokens. These ERC-20 tokens are easily converted into your wallet.
It functions as a DEX network (Decentralized Exchange Network), which is a type of crypto exchange that allows seamless P2P transactions. Smart contracts are responsible to liquidate the protocol.
BNT token facilitates conversion of various smart tokens which can be connected to smart contract. The wallet handles the token conversion and users decide the details. The token has a vast useability for all users, including beginners.
Bancor acts as an automated price calculator. It determines the exact amount of a token that a user would like to convert. Then it converts that token to an equivalent amount.
This is possible through the Bancor’s Formula. It calculates the price for a token using market cap and the available token’s liquidity.
Overall, the Bancor protocol fixes the issues of low liquidity as well as poor adoption in crypto. Before Bancor, it was not easy to exchange tokens for other tokens. However, by automating liquidity, it has made it possible to do this without much hassle.
Bancor may seem overwhelming to you if this is your first time using Bancor. Bancor wallet use is simple. Your exchanges can be made without any technical knowledge. The platform is designed to be easy-to use for all investors, big and small.
Once you have learned all about Bancor, it’s time to join other investors and reap the rewards.
Here’s a full list of sites to trade cryptocurrency in Canada if you don’t feel like trying Bancor.
Bancor Network Exchange Review for United Kingdom (UK)
Bancor is an open-source decentralized protocol that allows traders and liquidity providers to trade a variety tokens without any hassle. You can exchange more 10,000 pairs of tokens in one click.
John Maynard Keyes was the one who tagged ” Bancor”. John used “Bancor”, a term that John defined as a global money, during his presentation at the 1944 Bretton Woods International Trade of Balance conference.
The Bancor Foundation established it in 2016. The Foundation has its headquarters located in Zug, Switzerland. There is also a Tel Aviv Yafo R&D Center. This protocol was created at the Research Center of Israel.
Bancor lets users swap between two tokens quickly. It creates an independent liquidity platform that does not require a counterparty.
Transactions can be made using the basic token BNT. The platform operates in an unrestricted and decentralized way while using the BNT token for transactions.
Bancor Network Token is a well-known standard for the introduction ERC-20 and EOS compatible Smart tokens. These ERC-20 coins can be converted to your wallet.
It works as a DEX Network (Decentralized Exchange Network), a group of crypto exchanges that allow seamless P2P transaction. Smart contracts are responsible in liquidating the protocol.
BNT token allows you to convert various smart tokens. These tokens can then be linked to smart contracts. The token conversion is done within the wallet. Users can decide when they want it to happen. The token offers vast usability to all users, even novices.
Bancor works as an automatic price converter that determines how much token the user wants to convert. The equivalent amount is then provided in another token.
This can be done by implementing Bancor’s Formula. The Bancor Formula calculates the price per token by evaluating its market cap, liquidity and other factors.
Overall, the Bancor Protocol solves the issues that low liquidity and poor adoption are a problem in the crypto world. Before Bancor’s entry, it was difficult to exchange one token for the other. Automating liquidity has allowed the protocol to make it simple and quick.
Bancor’s protocol might seem complicated at first if you are new to the service. Bancor wallet usage is very simple. You can easily make your exchanges with no technical skills. The platform’s team is committed to making it easy for investors of all sizes.
Now if you don’t feel like giving Bancor a shot and looking for more features such as NFTs, then you might want to check this list of the best British cryptocurrency exchange platforms right now. This in-depth guide includes all the well-known crypto exchanges in the crypto space like Crypto.com, Gemini, Kraken, eToro (perfect for you if you’re also interested in forex), and many more!
Bancor Review: Final Thoughts
Bancor has acted as one of the most pivotal DEXs on the market, and its innovative technologies have made it a significant player throughout the modern crypto expanse. With a tremendous ecosystem and infrastructure in place, Bancor is home to some of the most considerable trade action in the industry. Users can stand to benefit from the Bancor wallet, pricing, token conversions, and chain liquidity.
However, if you just entered the crypto fray, Bancor might not suit you. Bancor rewards veterans or those who know more about the Ethereum ecosystem. Still, if you’re eager to learn, read up on all the terms, protocols, and technology that drives Bancor, and you will receive one of the best user trading experiences.
It doesn’t hurt to give Bancor a shot as far as we’re concerned. With a high user retention rate, Bancor ranks among the exchanges with the most loyal users. There’s no shame in getting your feet wet, even if you opt-out a few weeks later after some trades.
Still, we’re confident that you’ll be hooked once you get the hang of Bancor’s infrastructure. Give Bancor a shot and see the full power of DEX technology. Get started trading today. Don’t forget to check Bancor’s social media channels for more updates!