Bancor Network is a decentralized cryptocurrency exchange platform, founded in 2016 by Eyal Hertzog, Galia Benartzi, Guy Ben-Artzi, Yudi Levi.
The Bancor Protocol is named after the International trade balancing currency that was originally developed by J. M, Keynes and E.F. Schumacher and announced at the Bretton Woods Conference in 1944. The introduction of the bancor was part of Keynes' plan for the international monetary system after World War II. The rate of the bancor was to be determined in relation to gold, and the rates of all currencies were to be expressed in bancors.
Bancor provides quick liquidity for ERC-20 tokens by using its own intermediary protocol BNT token. What makes Bancor different from other exchanges is that it does not support any fiat and allows only converting between various tokens, holding the liquidity pool in BNT as “the base token” receiving liquidity. Thus, the exchange from one token to another has the following conversion path: Token 1 > BNT > Token 2.
The Bancor Protocol enables tokens to calculate their own prices using a transparent auto-balancing mechanism, and to be converted directly from their smart contracts. Smart contracts allow the purchase and sale of tokens anytime directly without a real need of exchange. The price at which these conversions take place is a function of the Bancor Formula, which balances supply and demand for the Smart Token while holding a constant ratio between a Smart Token’s market cap and its connector token balances.