Bancor is a blockchain-based platform that works by encouraging network users to allocate crypto funds to a liquidity pool. The Bancor protocol allows participants to exchange digital currencies between users while adding liquidity to the crypto markets without the interference of any financial institutions or third parties. Bancor Network Token (BNT) is the native cryptocurrency of this protocol.
In its operation, Bancor uses an automated market maker mechanism that provides greater liquidity in individual markets, while users can regulate and maintain liquidity pools using cryptocurrency deposits. The Bancor protocol offers rewards to its participants for adding liquidity to various pools.
The factor that distinguishes the Bancor Network from other similar AMM solutions on the DeFi market is the function of connecting to other networks such as Ethereum and EOS. At present, Bancor users can connect to the above two networks to increase the smoothness of trading execution in the Bancor network software. The protocol management team has announced that additional, more compatible networks will be added in the near future.