TOTAL SUPPLY
81.862M
With each purchase through smart contract , new bnt will be created (bnt is unlimited) . Hence the supply increase , and this increase the value too
Won't this constantly dilute the value of existing tokens? Why should anyone hold then?
Having a problem grasping this too.
If they are constantly upping the supply the price will just remain stagnant..at least according to the laws of supply and demand
You should read the whole whitepaper or Faq.
https://www.bancor.network/faq/general'Smart tokens are compatible with the ERC20 standard and can be used by any software that supports this standard, such as Ethereum wallets. However, smart tokens offer additional functionality not available to regular tokens. Each smart token holds a reserve balance in one or more other ERC20 tokens, thereby enabling anyone to exchange between itself and any of its reserve token(s). The smart token’s smart contract issues new tokens (expanding the supply) to anyone who purchases it with any of its reserve tokens, and withdraws tokens from the reserves (contracting supply) for anyone choosing to liquidate the smart token. The price of a smart token vis-a-vis any of its reserve tokens is calculated as a ratio between the current smart token’s supply and its reserve balance, at the pre-set CRR (Constant Reserve Ratio.)
Please read our white paper available on the Bancor website for more detailed information about these formulas and their proofs. Essentially,
a smart token’s price will always strive to balance supply and demand for the smart token, meaning that when it is being purchased the price is climbing, and when it is being sold, the price is dropping, in relative proportion to the respective transaction sizes.Now the activation of smart contract is just the beginning. This smart contract just the basis of bancor.
Bancor network token (bnt) will be used as a default reserve when people want to create smart token in its platform.
The BANCOR network token is the Genesis smart token to be deployed, establishing the BANCOR network, functioning as its native currency. The BANCOR token will hold a reserve in ETH.
BANCOR tokens will be issued in a crowdsale. The crowdsale proceeds will be used to deploy and continuously evolve a user-friendly web/chatbot interface for issuing and using tokens in the BANCOR network, to support various efforts for growing the network such as investing in the reserves of new tokens, and to make the initial deposits required to set up a new type of high liquidity decentralized token exchange network based on the Bancor protocol, using 100% CRR token changers.
All smart tokens issued within the Bancor network will hold the BANCOR token as a reserve (though they may also hold additional reserve tokens.) This means that an appreciation in the value of any of the network’s smart tokens will appreciate the value of the BANCOR network token, benefiting all other smart tokens in the BANCOR network, since their reserve balance value will increase.
BANCOR will also be used as a reserve for the token changers that make up its decentralized exchange network. A BANCOR token changer is basically a smart token that holds a 50% CRR reserve in BANCOR, and 50% CRR reserve in an existing, standard ERC 20 token (e.g. REP, GNT, RLC) allowing end-users to easily convert between the two by buying the smart token with one reserve token and selling it for the other. In the future, Bancor plans to support additional tokens as well.
Tldr: bnt wont stagnant
