A Smart Token holds one or more reserves of another token, ensuring continuous liquidity and transparent pricing.
Smart Tokens are a new class of crypto currencies and the building block of the Bancor Protocol. They have built-in functionality that allows them to be autonomously created and converted at any time.
By sending tokens to a Smart Token’s reserve, a user receives newly issued Smart Tokens in return.
A Smart Token’s price is formulaically determined by the amount of tokens in circulation and the size of its reserve(s).
A Smart Token with multiple reserves enables conversions between any of the tokens in its reserves.
A Smart Token’s price is always adjusting so that its reserves are never drained.
Smart Tokens increase their price each time they are created and decrease their price each time they are destroyed, so users know they are always getting a fair price based on real-time supply and demand.
Smart Tokens have a built-in reserve of one or more tokens.
New Smart Tokens are created when tokens are added to the reserve.
Smart Tokens are destroyed when tokens are removed from the reserve.
Smart Tokens maintain a fixed ratio between their total supply and the supply in their reserves.
Relay Tokens enable instant conversion between the tokens held in their reserves while maintaining a fixed ratio between the reserves.
Smart Token configuration options differ by either the number of reserves held or the ratio between the Smart Token and its reserve. Each token provides a different use-case, with only more to come.
A Smart Token with one reserve that holds one token type and has a reserve ratio of less than 100%. For example, BNT is a Liquid Token with ETH as its reserve.
A Smart Token that holds two reserves, each with a 50% weight, ensuring conversions between both of the reserves. Most tokens connect to the Bancor Network by creating a Relay with BNT and their token.
A Smart Token with an unlimited number of reserves, each with its own ratio.
A Smart Token with one reserve with a 100% weight ensuring its market cap is equal to its own reserve.