The Bancor Protocol’s fundraiser raised 396,619 ETH today, worth over $142 million at an Ethereum price of $360. This was achieved despite massive malicious cyber attacks on Bancor’s network, website and application – which forced the team to extend the minimum funding time from one hour to three.
In exchange for the ETH that investors sent, Bancor issued them its own native token, BANCOR (BNT) – the first blockchain currency issued using its protocol. This token will be used as the primary reserve currency in the ecosystem and will draw its value from the collective network effect of all Bancor-compatible tokens holding it in reserve.
Finance Magnates was watching the crowdsale unfold in real time at The Floor – a fintech hub dedicated to connecting Israeli startups with global financial institutions, located inside the Tel Aviv Stock Exchange building. Bancor is a member of The Floor and its directors sit on the Bancor advisory board.
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— Finance Magnates (@financemagnates) June 12, 2017
The Bancor Protocol is a smart-contract-based token conversion protocol, which enables a single party to convert any token to another, without requiring a second party to exchange with. It achieves this through the use of reserve currencies, which allow for automatic and algorithmic price discovery regardless of trade volume.
The Bancor Protocol aims to solve the liquidity problem for the long-tail of user-generated cryptocurrencies. The smart-contract protocol will be cross-blockchain, starting with the Ethereum blockchain. By issuing tokens backed by a reserve, a new token immediately receives a conversion rate, making it tradeable regardless of the availability of buyers. It also enables the creation of new categories of cryptocurrencies, such as decentralized token baskets.