Topic: [ANN] Bancor | Protocol for Smart-tokens, solving the liquidity problem - page 351. (Read 375905 times)

Bancor blog clearly states that 20% of raised ETH goes into reserve, which is ~80K. They crowd sold only 50% of BNT (~40M), the other 40M they gave to themselves. In the end, 80M of BNT is backed by 80K of ETH. At a price of 100 BNT per 1 ETH this means 10% reserve ratio.

People, at lest learn times table before you invest into something.

I think the 20/80 rules only apply to the last 147K ETH that poured into the ICO that was above their intended 250K ETH cap.  So I think the correct way to look at it is that (250+0.2*147)/397 = 70% of your donation went into capitalizing an asset you now hold.  The remaining 30% went to an unplanned, "ex post facto"  fund whose assets you now have no claim over.  For the next 2 years this new fund will purchase tokens (at a price that gives zero profit to the public sellers) and give those tokens back to the Bancor Network that issued them.

I will just start boldly. The Bancor business model is pretty close to a scam. I am sure you will not take my word for it, because this is my first post. In fact, I made this account because I find it bizarre that no one is talking about this. Let's be honest, which one of you truly tried to comprehend their mathematical proof? Not a single person who invested at least, because otherwise they would not have wasted their money. I will try to explain a little.

They collected pretty close to 400k ether. Essentially what they do, is keep .8*400k ETH = 320k ETH to themselves, and call the remaining 80k reserves. They will express this 80k in a different coin, called BNT. They assign 100 BNT to 1ETH that they received. That means there is 500BNT for every 1ETH in the reserves. Essentially, if everyone would want to convert their BNT back to ETH, they would get 1/500 ETH per BNT. Wait you say, in the white paper it says that the starting price of 100BNT will equal 1 ETH! This is true, this is where the mathematics uses a trick to hide what is going on. Their pricing formula, P=R/(S*F) ensures that the first BNT sold will be sold at a 'fair' value, namely equal to the amount of ETH you spent to buy it in the first place. After the first sell, things get worse rather quickly. Let's illustrate this by a little example:

Lets say that 10% of people who own BNT sell it back to ETH via the smart contract. For the initial price we get: P = 80k/(40m*.2) = 0.01. All looks fair. Then after the sell we get 40m*10%*0.01 = 40k,  P = 80k-40k/((40m-4m)*0.20) = 0,00556. Ouch, the price almost dropped to half value from the 10% sell-off (this is different if there are many small transactions but I will get to that later).

If people buy the same amount of BNT, this is what happens: P = 120k/(44m*0.20) = 0.01364. The increase in price is not nearly as interesting for the next person. But again, this will be lower for many small transactions.

I created a plot assuming transactions are made in small batches of BNT coins. We find that the BNT value drop VERY quickly when people start selling, and does not rise nearly as fast. Essentially this just makes BNT an undesirable coin. Another weird thing about their system is that it does not consider convexity. This means that big transactions will get very different prices than many small ones. This just does not make sense, but they don't care as they simply took your money.
http://imgur.com/a/f9yLy

If you are still not convinced, consider this. They literally admit to taking 80% of your money. All they give back is some mathematical trick based on 20% of the ether that you gave them. Do you really believe they just generated x5 value out of thin air? Sorry, but math does not work that way. I would recommend getting rid of your BNT asap, or you end up all the way on the left side of the graph. I am sorry that this news comes a bit late for some of you... I didn't read their methodology until last night Sad

Maybe now you can start to add up why the ICO was strange in various ways.

As final words, don't just believe whatever I say. Think about it for yourself. I gain nothing by convincing you of whatever I write here, I am simply sharing thoughts.

So in summary:

 • 20% of your investment went into capitalising the asset you now hold
 • 80% of your investment went into capitalising a private company in which you didn't get any shares

Like I say, that's just my understanding of the current equity balance of the ICO. I'm happy to be corrected if wrong.

Social Media Bounty is now Closed. And it seems that those who submitted their weekly report later than June 12 will not get paid. As the Campaign Manager replied to the comments, the report needs to be submitted not sooner than a week started on the day the participant signed up (see screenshot of my application below)



As the image shown above, I applied 8 days ago (June 5 forum time), so my first report should not be submitted sooner than June 12. Since on June 12, their site wasn't accessible (app.bancor.network/), participants like me who supposedly submitting the reports haven't had the chance to submit (screenshot of another user with the same problem below):



I've seen one of the reply from the manager (stated about post later than June 12 - meaning will not get paid):




I don't think it should be like this. The manager was accepting participants until 3 days ago today (so it was June 10 forum time), and mentioned about weekly report (see screenshot below):


If he knew that it will end on June 12, why still accept? and why not post a new discussion on the bounty site to inform the participants? Tweets and other actions should be checked (the date) and pay those who qualified. Some just posted it late because of the Weekly report rule & inaccessible site during the time of submitting a report, but did finish the task ahead of time.

Want to clarify it on the bounty site but it didn't allow me to sign in using telegram account (which I used before to sign up there), that's why I posted here. Thank you!
PS. All screenshots was taken today

Just as I thought. What you initially stated is patently false: "Well, 20% of your funds bought into it. The other 80% goes to capitalising the balance sheet of Bitcoin Suisse AG of which you receive no share, at least as far as I understand. Happy to be corrected on that if wrong."

I think the 20/80 rules only apply to the last 147K ETH that poured into the ICO that was above their intended 250K ETH cap.  So I think the correct way to look at it is that (250+0.2*147)/397 = 70% of your donation went into capitalizing an asset you now hold.  The remaining 30% went to an unplanned, "ex post facto"  fund whose assets you now have no claim over.  For the next 2 years this new fund will purchase tokens (at a price that gives zero profit to the public sellers) and give those tokens back to the Bancor Network that issued them.

Just as I thought. What you initially stated is patently false: "Well, 20% of your funds bought into it. The other 80% goes to capitalising the balance sheet of Bitcoin Suisse AG of which you receive no share, at least as far as I understand. Happy to be corrected on that if wrong."

i join 8 days ago.

If you joined less than a week ago it seems they won't let bounty participants claim any money despite accepting them into the program on the assumption they would get paid.