News From The Crypto Currencies Scene

Bancor Devises New Standard for Token Creation

Bancor Devises New Standard for Token Creation

In an effort to enhance cryptocurrency liquidity, Bancor has introduced the Bancor Protocol. This is the newest standard for token creation based on blockchain smart contracts that ensures automatic price discovery and instant digital currency liquidity for low-volume tokens.

Essentially, the Bancor Protocol enables a token reserve through a fixed Constant Reserve Ratio (CRR). The figure of the proportion may vary between 0% and 100%. Following the purchase of a Bancor-compatible token, it is issued by its smart contract and the reserve goes up. When it is sold, money is withdrawn from the reserve and the token is destroyed.

According to that mechanism, the price of a token is self-adjustible with regard to the new supply that takes into account the cryptocurrency reserve amount along with the CRR. That way, the need for matching bids and asks in real time is spared.

The Bancor Protocol will be cross-blockchain but will first become available on Ethereum.

The new standard would also make possible the creation of new categories of cryptocurrencies such as decentralized token baskets.

The first cryptocurrency to utilize the Bancor Protocol will be the Bancor Network Token (BANCOR). It will be presented to the blockchain community through a crowdsale scheduled for May 30.

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