Review on Bancor Network by Ogulnar Annamuhammedova

Bancor is a network that allows users to convert between two tokens of your choice without any counterparty. This can be done at an automatically calculated price. The system also includes a built-in liquidity function for added convenience.

The Bancor Protocol aims to be the new standard that ERC20 tokens follow. This allows smart contracts to connect to the network to provide ongoing on-chain liquidity throughout the network. With the protocol and this liquidity, there is no need to reconcile buyers and sellers.

The Bancor protocol uses what are known as "connector" modules. They store the balances of different ERC20 tokens in a smart contract. Bancor's formula constantly recalculates prices to maintain a balance between connectors and smart contracts.

The protocol is revolutionary because of its ability to convert tokens without the need to reconcile two parties whose desires work together. Instead of each buyer requiring a seller and vice versa, a simple Bancor protocol balance formula is bought and sold to ensure that every token on the network retains its formulaic relationship to other tokens. It is these relationships that lead to constant liquidity without worrying about listings on exchanges or trading volume.

The Bancor network allows all of these token conversions to be converted. There is no distribution, so users get low-cost conversions from a non-profit automated market maker. Prices are transparent thanks to the Bancor formula. It includes the size of the transaction and does not require an order. The system also has constant liquidity, so you can convert the token at any time, whether you are a buyer or seller, or the trading volume of your choice.

Since all purchases and sales are made using smart contracts, no deposits are made. You don't even need to register to use Bancor as on-chain conversions come straight from your own web3 wallet. Finally, the system is backward compatible, allowing any ERC20 token to integrate into the network without any fees or code changes.

The network token BANKOR, or BNT, is the center of the network. It was activated in June 2017. Users can convert any token on the network to BNT or vice versa. They can use BNT as an intermediary to convert tokens among themselves. Bancor's formula calculates the speed of these conversions.

You can always get BNT by sending Ethereum to the appropriate address. After that, you will immediately receive BNT tokens. The same method also allows you to convert BNT to ETH. The amount of BNT in circulation is constantly changing. Tokens are created when users send ETH to a smart contract. Token destruction occurs when users sell their BNT under a contract.