How Does Bancor Network Work?
The market is filled with blockchain projects focused on decentralized applications and the conversion of tokens. Bancor Network, one of the most popular projects in the crypto space, is a group of smart contracts on Ethereum’s blockchain. A smart contract allows users to exchange their crypto in a truly decentralized exchange. Bancor Network provides traders with automated liquidity for trades by the use of the Bancor wallet and Bancor Network Token (BNT).
BNT token is an ERC-20 token that is built on Ethereum’s blockchain. It has two main roles:
- Providing chain liquidity
- Governing the protocol
At present, BNT has a total market cap worth $446 million and an estimated circulating supply of 70 million tokens.
Connecting Your Bancor Network Account To ZenLedger
- To import your transactions, log in to Bancor and copy your receiving address.
- Paste the receiving address you copied from Bancor into the wallet address field in ZenLedger.
- Select the proper coin from the dropdown list.
- Select if the wallet is based in the USA or not.
- Then hit add coin.
How To Generate Bancor Network Crypto Tax Forms?
After you’ve connected your Bancor account, completed your import, and confirmed that your transaction information and tax liabilities are correct, simply click to download your forms!
How To Buy Bancor Network Token (BNT)?
Let’s get started with how to buy Bancor Network Token (BNT) using three simple steps:
1. Create An Account
You need not necessarily use the Bancor exchange for buying BNT tokens. There are plenty of centralized exchanges that support Bancor, such as Binance, Bittrex, and Coinbase. If you have a cryptocurrency brokerage account, centralized exchanges will be an easier option for you. You'll have to provide you information such as name, email address, phone number, Social Security number (SSN), and address for verification. For decentralized exchanges like Bancor and Uniswap, you have to connect your Ethereum wallet.
Coinbase is the most chosen decentralized exchange among all exchanges for buying Bancor Network Token (BNT).
2. Add Your Wallet
After the creation of your account, you must store your tokens securely away from hackers. For this, you can either choose to store the tokens on the same exchange from which you bought BNT or on private crypto wallets. The former is not a very secure option as it lacks the high-level security of software and hardware wallets. Most investors choose software wallets such as Coinbase Wallet and Metamask for their easy accessibility, but nothing beats the security offered by hardware wallets. Hardware wallets are offline devices where your crypto is stored.
3. Start Purchasing
Now that you've created your account and connect your wallet, it's time to buy Bancor Network Token (BNT). Both centralized and decentralized exchanges can be used to purchase Bancor (BNT) tokens.
If you're using centralized exchanges like Binance and Coinbase, you'll have to create your account and place your order. But if you're using decentralized exchanges, like Bancor and Uniswap you will have to add an extension of Ethereum wallet to your web browser. One of the best wallet extensions is MetaMask.
You can place either a market order or a limit order. In a market order, you can buy BNT at its current market value. In the case of a limit order, the price of BNT is determined by you.
How Does The Bancor Network Work?
Bancor's liquidity protocol maintains liquidity for ERC-20 tokens. Bancor, being a smart contract protocol on Ethereum, only allows the exchange of Ethereum based tokens without the need of any counterparty. In the network, Bancor smart tokens ensure the balance between all the ERC 20 tokens.
As per Bancor protocol, you will seamlessly be able to perform exchanges for tokens that are supported by EOS and Ethereum directly through the Bancor wallet.
Bancor Network Safe Staking
Safe Staking allows users to deposit their crypto tokens in a liquidity pool to earn a passive yield of profits without any risk of loss and single token exposure.
- You will only need to deposit one single token in the Bancor network instead of pairing 50/50 tokens with another asset (like ETH or USDC)
- Depositors can earn auto-compounding earn trading fees and are paid in the token they've already staked
The Bancor network protocol is designed in a manner such as to ensure the depositor gets back the same value deposited token + a trading fee and rewards. This is achieved by using a mechanism known as Impermanent Loss Protection (IL Protection).
It must be also noted that the IL Protection tracks the HODL value of all deposited tokens, which means, even if a token is to crash, the depositor is protected and entitled to withdraw the full invested value of the staked tokens
The Bottom Line: Why Choose Bancor Network?
If you aim to invest in virtual currency with good returns, Bancor can be a great option for you. The key features of Bancor Network are:
- Use of smart contracts to create a smart token
- Cross-chain conversion
- Built-in Automated Market Maker (AMM)
- Bringing in automatic liquidity