Bancor Deals Memo

#notadvice

What I Love

Product

Bancor rejects the buy/sell trading system that all exchanges use to price assets. The Bancor protocol is a new way to price and exchange assets that is not based on buy/sell pairs and is always completely liquid (you can sell with no buyer). Something that struck me from an article by Eyal Hertzog:

“The only way liquidity risk may exist is when it becomes a rare event to find other parties with opposite wants to trade with. Naturally, price risk still remains, however, low price provides a potential opportunity, while illiquidity results in a disconnection from the larger network of value transfer.”

Basically you can trade more freely, and new trading opportunities are created with a new system.

It seems like a lot of traditional ideas about exchanges and currencies are being rethought now, and exploring this makes sense to me. It’s probable that the current buy/sell system will seem outdated one day, so the question is will Bancor be a catalyst in that?

UI

The Bancor consumer-facing product is a decentralized exchange, and it has a great UI. Not just “great for crypto.” The company and product are very user-focused, and it feels really good (and ready for mainstream).

Team

The team is also super smart. The whitepaper is clear and strong. This Block Zero podcast with Eyal Hertzog is pretty amazing. I definitely like the ideas and culture of the group. It aligns with my “evolution of everyone” principle.

What I Like

Unique Team Experience

I like the experience the team has, specifically with economies before crypto was like it is today. The hearts and mom community example they reference from time to time creates interesting experience and perspective for the team. Maybe I’d sum it up as they have insight into economies that aren’t built for economists (wannabe or otherwise), and that’s what mainstream adoption will be like, so they’re in a good spot.

Risks

Token Velocity

I don’t fully understand how their tokens are either staked or burned or neither yet, but I’ve seen references to burning them. I don’t fully understand whether they need to held to generate the liquidity or if they’re tied to other tokens by value change alone. Therefore, I don’t know whether the price of BNT as an asset will go up or down and why.

However, I plan to use Bancor to trade tokens whenever I can (great interface, no account), so holding them should benefit me either way. I’m also down to just support a cool project to some extent, which is a trend I’m seeing in myself more and more with some of these crypto projects… 🤔.


This is seriously not investment advice. I typically own shares or tokens of what I’m writing about, but by the time you read this, I may have sold them or completely changed my opinion. It’s important that you come to your own conclusions about this stuff, and it’s important to take full responsibility for understanding the risks in any asset.