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Bancor ICO AnalysisThe Bancor ICO will probably be one of the most coveted ICOs to launch this year. The reason is simple: Bancor offers token holders the chance to use its features to build a cryptocurrency basket under it. This basket’s liquidity will always be high relative to that of smaller cryptocurrencies, because Ether underpins the token. This means that people will be able to build complex cryptocurrency portfolios and hold them within the smart token. This will reduce trading fees and will allow holders to either trade their portfolios without breaking them up, or liquidate them with relative ease.

ICO Rating: A- (Not based on financial risk. The grade scale goes from A+ to C-)

ICO Date: June 12th, 2017.

Bancor ICO Schedule and Bonuses:

The Bancor ICO had a few small delays, but it will finally launch this coming Monday. Project developers are keeping some critical information about the ICO secret, with the intention of democratizing the ICO as much as possible. Developers want to prevent big investors from acquiring most tokens available. Therefore, developers are not talking about a hard cap on the tokens or the funds they aim to raise. This might raise some suspicions within the investor community, which is definitely healthy, and will put pressure on developers to be open and accountable.

Up until now, Bancor developers have been quite open about their project aside from some of the details of their ICO. Thanks to their openness and how keen they are on communicating their fundamentals, everyone will be able to understand how the project will invest the proceeds of the funds they raise. In principle, and given that the Bancor ICO follows Keynesian principles, there will always be a reserve currency to exchange the tokens for, which makes this ICO particularly attractive. The distribution of proceeds is as follows:

 

Bancor ICO Investment Allocation

This is how the distribution of funds for the Bancor ICO will look like. Source: https://blog.bancor.network/bancor-network-token-bnt-contribution-token-creation-terms-48cc85a63812

 

Bitcoin Chasers’ Analysts Notes on the Bancor ICO:

Given that our analysts follow the Austrian School of Economics, especially Hayekian Economics, it was a challenge to abandon pre-conceived notions to consider the advantages of this project. The first characteristic that struck us, was that the Bancor ICO dropped Keynes obsession over balance of trade, stripping the cryptocurrency version of Bancor from the restrictions that Keynes had in mind. This Ethereum-based Bancor basically attempts to balance out liquidity issues instead of balance of trade issues.

Therefore, the project treats Ether as the reserve currency that can underpin its cross-chain value exchange proposition. The Bancor smart token may become the reserve currency for cross-chain value exchange. To put it in simpler terms, it has the potential to become the reserve currency of trade across different blockchains. That means the token itself can become a vehicle to exchange different currencies and tokens without the use of an exchange. It can also become the tool with which cryptocurrency can finally start catching up with more complex financial instruments that traditional investors have developed. As such, a Bancor token can emulate an index fund.

Bancor ICO Caveats

The economics of the project and the concept of the smart token are solid; its potential is clear. However, there are a few characteristics that might not appeal to investors:

  • Developers are keeping specific information about where and how to buy Bancor tokens, and up until now, only Bitcoin Suisse has pre-ICO privileges. That might spook some investors away.
  • There is no hard cap for the number of tokens that can be created on one hand, but there is a limited amount of reserves on the other hand. That might create some liquidity imbalances.
  • In theory, there should not be any kind of cap at all on Bancor smart tokens, because there is no limit to the amount the market might demand, but the developers might have one in mind. This might be a great price driver, but it can affect value in the long term.
  • The Bancor ICO will be completely backed by Ether, which is a little ironic for such a Keynesian project, and for one that seeks to guarantee liquidity. It should aim to hold part of its reserves in Bitcoin and/or other independent and immutable cryptocurrencies (this is where our Hayekian Economics kick in).

What does this mean?

There are several things we would like to see the project committed to for us to give them our highest grade. After the Bancor ICO, we would like to see a commitment to move out of an Ethereum-based approach. The Bancor smart token would be even smarter if it created its own blockchain and tackled the cross-chain value exchange issue under its own banner. Also, it is important for the liquidity of the token to hold bitcoin in its reserve, if not Litecoin and other top 10 altcoins that are highly convertible and immutable.

Bancor ICO Appeal

Apart from this, the Bancor ICO is very appealing. It will probably be over within days if not hours, partly because it is the first feasible cross-chain value exchange solution out there, that does not involve any cryptocurrency exchanges.  Bancor developers avoided the “exchange killer” label, but they do have the potential to bite into that market in an ostensibly decentralized manner.

Bancor ICO Transparency

Lastly, the Bancor ICO is quite transparent. The developers were easy to reach and were widely available to answer all our questions. We believe that they are keeping some details about the Bancor ICO to themselves, to democratize investment, although they might be projecting the opposite. Nevertheless, only time will tell, so if you want to invest in the Bancor ICO, make sure you read the white paper and consult other sources before you do so.

*Bitcoin Chaser is not responsible for any of your investment decisions.

BitcoinChaser Staff

Here at BitcoinChaser.com we live, breathe and write about Bitcoin and cryptocurrency. Interested in being featured? Give us a shout!

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