Is Bancor A Good Investment?

Introduction

Bancor (BNT) is the first decentralized trading protocol and the first network to allow peer-to-peer cross-chain conversions. With no barriers to entry, this protocol empowers traders, liquidity providers, & developers to participate in an open financial marketplace. All stakeholders are allowed to get involved and shape Bancor's future through the democratic and transparent voting system Bancor possesses. 

BNT token that powers the Bancor network was one of the first major ERC-20 tokens. The Bancor ICO raised $153 million in 2017 in just 33 hours. The Bancor network aims to exchange tokens with other coins directly, without the help of cryptocurrency stock markets or exchanges.

The Bancor protocol has formed a network of smart contracts called "Liquidity Pools," designed to pool on-chain liquidity and perform algorithmic token trades. The Bancor network is entirely decentralized, and users can swap ERC-20 and EOS tokens with over 100 different trading pairs and can trade on the network with the Bancor wallet. 

Bancor ecosystem supports a two-way token model, including: 

liquid token:  It is an automated token with a single reserve and mints and destroys itself by removing the reserve token from the smart contract or by sending it to its smart contract.

Relay tokens: The main aim of providing these tokens is to use in staking in order to provide liquidity. The token holders are going to receive a percentage of the future earnings of Bancor, and Relay tokens show the proportion of amount staked to the total value in the pool.

How Does Bancor work?

For the pools available on the Bancor network, the protocol’s smart token allows traders to provide liquidity and anyone can contribute liquidity to the pools. In this case, they can they are allowed to receive rewards for trades that pass through the pool. Liquidity providers will receive pool tokens that represent a percentage of their total stake.

Bancor introduced two Automated Market Maker (AMM):

• Bancor v1: It was designed in 2017 in order to solve the liquidity problem where sparse order books struggled to guarantee liquidity to investors on both sides of the trade. 
• Bancor v2: The v2 protocol co-invests in pools alongside liquidity providers in order to support single-sided AMM exposure and to cover the cost of impermanent loss with swap fees earned from its co-investments through elastic BNT supply.

Financial Analysis

Bancor (BNT) started with a value of around $4 USD. BNT rose to $10 in just six months, at the height of the last bull run in January 2018. Following the rest of the crypto market, BNT eventually fell to a low of 13 cents in March 2020 which coincided with the strict regulations that were enacted by the USA. 

At the time of writing this post (10/12/2021), Bancor's Return On Investment (ROI) over the past year was 251%, way over its similar projects' ROI that saw an average ROI of 205%. However, it underperformed compared to the market's top 1500 project with an average ROI of 13,938%.

Projects with public Github account have more transparency and reliability. Generally, investing in projects with multiple contributors and commits is considered a safer and better investment (this means they are busy working and building the project). According to its Github account, there are 15 contributors to the development of Bancor.

Over the last five months, Bancor's market capitalization rank followed an overall declining trend, starting at the rank of 90 on Aug 2021, reaching 116 by the time of writing this post with an approximately $877 million market cap. Moreover, its liquidity score is 55% above the market's average score, making it relatively easier to sell in bear markets.

Another critical factor in the success of any project is gaining public attention. Our data shows that Bancor's Twitter account saw a growth of 13% over the last five months in the number of followers. Also, the number of Bancor's Telegram channel users and Reddit subscribers increased, by 9% and 15% during the same period, respectively.

You are saying that Bancor Network is the best cryptocurrency to invest in?

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