Bancor Spreads Over to EOS with ‘BancorX’

Bancor, launched on the Ethereum blockchain, is now also operational on its competing platform.

Bancor, the Switzerland-based ‘decentralized liquidity network’ which resides on the Ethereum blockchain, is now available on the EOS blockchain too.

According to a company announcement, the protocol behind this move is called ‘BancorX’, which is described as a ‘cross-blockchain decentralized liquidity network’. This means that users will be able to transact with EOS-based tokens too.

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Bancor says that EOS holds some advantages over Ethereum, namely that transactions are much faster and much cheaper.

Token Vending Machine

Bancor was established in 2017 and launched at the Tel Aviv Stock Exchange’s financial technology centre. Its ICO raised $153 million in a matter of hours.

It functions like a decentralised exchange, allowing users to create smart contracts (called ‘relays’) to trade with each other, which means that they don’t need to rely on a central body. Tokens created using the Bancor Protocol are automatically fungible with each other.

Founder Galia Benartzi describes the system as a vending machine for crypto-tokens.

Bancor offers approximately 8,000 trading pairs and claims to have processed more than $1.5 billion worth of transactions since launch.

21 Block Producers

EOS is an Ethereum-esque platform which promises greater capacity for everything. It was created on the Ethereum blockchain before splitting away and raised an unprecedented $4 billion in its ICO, which lasted for a year.

There have been and are serious questions about whether the project is all it’s cracked up to be. The main issue is that the consensus mechanism seems to be highly susceptible to corruption; transactions are verified by no more than 21 block producers. These nodes are decided by user votes on a constant basis, but the weight of a vote is defined by the number of tokens staked, and the block producers earn tokens just by producing blocks. Furthermore, these nodes tend to be big operations in themselves – Bitcoin mining giant Bitmain is one of them.

EOS is run by a company which is based in the Cayman Islands, and it recently formed an independent governance board, which was seen by some to be an answer to criticisms.

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Nonetheless, Bancor says that it cannot wait to bridge “two enormously powerful shared global infrastructures towards a growing and interoperable blockchain industry.”

Philosophical Debate

In July, Bancor shut down operations because of an alleged $12 million theft. It later turned out that the amount was closer to $23.5 million.

In an interview with Finance Magnates shortly afterwards, head of growth Omri Cohen explained: “A Bancor wallet was broken into, and that wallet had access to certain smart contracts. Some tokens were stolen from those smart contracts on the network… All wallets on the Bancor network are fully on-chain and fully decentralized. Bancor doesn’t have access to any of these wallets. So, no matter what, not a single user wallet was broken into. There was no breach. It was just the smart contracts,” he said.

Regarding criticisms of not really being decentralised, Cohen said: “…for us, the integrity of the Bancor network is more important than the philosophical debate over what true decentralization really means.”

In December 2017, another Swiss company, Trade.io, integrated the Bancor protocol.

In April 2018, the firm launched a new wallet, which shortly afterwards was featured in several news outlets because a security auditing company called Quantstamp falsely found some security vulnerabilities in the wallet.

 

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