The blockchain universe can be considered a womb of several innovations. Every day, startups start operations here, while a new protocol is launched there, and so on. New DApps, DEXs, and many other tools and services seem to come out of nowhere sometimes. One of these great innovations was the well-known Bancor Network project, which went through several ups and downs, including a famous hack and recovery.
How Does Bancor Network Work?
Here is a brief explanation on how to use Bancor Network!
Bancor Network brought a well-designed solution that allows traders to swap ERC-20 and EOS tokens with no interruptions across tens of thousands of pairs, all this in just a matter of seconds.
The main goal here is to instantly convert between two chosen tokens without the necessity of a trade counterparty. Bancor also has its native wallet, which is used for each operation on the platform.
The “homemade” wallet also allowed Bancor to provide traders with instant liquidity for trades within the ecosystem.
The network remains completely decentralized, most due to this self-reliant attitude. The network, in addition to providing wallets, also has its own token (called BNT) to facilitate trades, which plays a big difference in terms of innovation.
EOS is a background platform for DApps and smart contracts, working similarly to Ethereum, but with remarkable differences when it comes to structure and other important foundational aspects).
Try Bancor Network here!
Dig Into It
User experience is a major factor among Bancor Network’s concerns. Allowing users to have an intuitive tool on their side, it works for quick and easy conversion of tokens.
It may look simple, but behind the stage, the “crypto hustle” happens full time. While the user accesses the interface and uses it, the wallet is doing transactions directly with BNT smart contracts, so the user can exchange tokens without the need for a counterparty.
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We must notice Bancor is the first network to allow cross-chain conversions without requiring users to give up private keys in the exchange process (private keys and funds are all under control of its’ users).
Another interesting aspect is that Bancor allows cross-chain conversion with EOS and Ethereum, planning to add more tools in that sense soon.
About Swaps And Liquidity
Today Bancor allows its users to exchange on a tool-rich environment, supporting an amazing range of conversion options.
These options are all free of fees, with instant trades available for both EOS and Ethereum tokens across almost 10k token pairs right through the network’s native wallet.
Using the BNT token, Bancor brings even more liquidity for cryptocurrency markets, which is a highly valuable action.
Without liquidity, currencies do not work. A currency that works must be bought and sold easily among traders.
Bancor provides an important service that is increasing liquidity for ANY token, as it built a platform where any token can be exchanged without the need of a counterparty.
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It does require only one person to complete a trade, using the liquidity provided by BNT token and native smart contracts. See that BNT smart contracts are used here to ensure a balance between tokens all times an exchange is performed.
Can I Trust Bancor Network?
Bancor Network suffered strong setbacks over the years.
First was a hack that happened in July 2018, where it lost almost $24 million in the process (including $10 million worth of BNT tokens).
It caused a big buzz among the crypto scene and ended up leading Bancor to freeze the blockchain to recover part of the assets.
Among critics was Litecoin creator Charlie Lee, who claimed that the projects company and blockchain are not 100% decentralized since it has the power to freeze client’s assets, as well as being able to lose their funds.
The second was a backdoor created to help protect users in case of similar attacks in the future, which ended up creating legal issues involving the U.S. Securities and Exchange Commission and the U.K. Financial Industry Regulatory Authority. Despite this, no major legal consequences happened after the episode.
Although it may sound a bit confusing for some, many still use it, especially people outside the USA, and it is still remarkably popular among DeFi users.
Conclusion
Despite numerous setbacks, Bancor was able to reinvent itself and to still active in the blockchain scene, being used by several people worldwide.
Providing unique user experience, including a native wallet and a native token as well, it is still a good solution for people who want to swap ERC20 and EOS tokens, with no fees, allowing quick processes, and above-average liquidity as well.