What is Bancor (BNT)?
Bancor Network Token (BNT) is the native token of the Bancor crypto project. The Bancor Network is a staking protocol. It enables users to generate income by employing single-sided staking. Besides, Bancor protects stakers from impermanent loss.
BNT token is like a link that combines all traded tokens on the network. In essence, the token provides liquidity to different tokens this way connecting them. Thus, it enables automated trading between two different assets that reside on the Bancor protocol.
The Bancor price tends to fluctuate due to various factors affecting the market. To mitigate this, make sure to check out the graph above. It will provide you with the current BNT price as well as its past fluctuations.
Any trader can provide liquidity to the Bancor’s pools by staking Bancor crypto assets. This allows the trader to generate income by receiving trading fees from the pools they provide liquidity to.
When BNT holders stake their BNT, they are given vBNT. It represents their BNT stake. Besides, it can be used to cast a vote in the governance processes of Bancor.
The BNT Token Supply
The supply of BNT tokens is dynamic. The main reason for that is the process of token minting and burning in order to control Bancor’s pool liquidity.
In essence, trading liquidity controlled by the protocol generates trading fees. The fees are used to compensate investors for impermanent losses. However, this results in the protocol accumulating an excess amount of BNT. Thus, when liquidity providers stake a similar amount of their Bancor tokens, the protocol burns the new balance of BNT in return for pool tokens.
In the end, due to the trading fees, more Bancor coins are burned than were created by the protocol. This lowers the whole BNT supply in the long run, which can also influence the Bancor price.
