Bancor is a smart-contract-based token conversion protocol, which enables a single party to convert any token to another, without requiring a second party to exchange with. It achieves this through the use of reserve-tokens, which provide liquidity through autonomous algorithmic price discovery, regardless of trade volume.
The Bancor protocol represents the first technological solution for the classic problem in economics known as the “Double Coincidence of Wants”, in the domain of asset exchange. For barter, the coincidence of wants problem was solved through money. For money, exchanges still rely on labor, via bid/ask orders and trade between external agents, to make markets and supply liquidity.
Through the use of smart-contracts, Smart Tokens can be created that hold one or more other tokens in their reserve. Tokens may represent existing national currencies or other types of assets. By using a reserve token model and algorithmically-calculated conversion rates, the Bancor Protocol creates a new type of ecosystem for asset exchange, with no central control. This decentralized hierarchical monetary system lays the foundation for an autonomous decentralized global exchange with numerous and substantial advantages.
Bancor is a work in progress. Make sure you understand the risks before using it.
Bancor protocol is implemented using multiple contracts. The main ones are SmartToken and BancorChanger. BancorChanger implements the token changer standard (See ethereum/EIPs#228) and is responsible for converting between a token and its reserves. SmartToken represents a changer aware ERC-20 compliant token.
Those will allow creating a Bancor compliant token while keeping dependencies at a minimum. In addition, it allows an owning contract to extend its functionality by giving the owner full control.
First and foremost, a Smart Token is also an ERC-20 compliant token. As such, it implements both the standard token methods and the standard token events.
Note that these methods can only be executed by the token owner.
issue
function issue(address _to, uint256 _amount)Increases the token supply and sends the new tokens to an account.
destroy
function destroy(address _from, uint256 _amount)Removes tokens from an account and decreases the token supply.
disableTransfers
function disableTransfers(bool _disable)Disables transfer/transferFrom functionality.
NewSmartToken
event NewSmartToken(address _token)Triggered when a smart token is deployed.
Issuance
event Issuance(uint256 _amount)Triggered when the total supply is increased.
Destruction
event Destruction(uint256 _amount)Triggered when the total supply is decreased.
The following section describes standard functions a bancor changer can implement.
Those will allow dapps and wallets to buy and sell the token.
The most important here is change.
First and foremost, a Bancor Changer is also an EIP-228 compliant changer. As such, it implements both the standard changer methods and the standard changer events.
reserveTokenCount
function reserveTokenCount() public constant returns (uint16 count)Gets the number of reserve tokens defined for the token.
reserveTokens
function reserveTokens() public constant returns (address[] reserveTokens)Gets an array of the reserve token contract addresses.
reserves
function reserves(address _reserveToken) public constantGets the reserve token details.
change
function change(address _fromToken, address _toToken, uint256 _amount, uint256 _minReturn)changes a specific amount of _fromToken to _toToken
The change will only take place if it returns a value greater or equal to _minReturn.
Change
event Change(address indexed _fromToken, address indexed _toToken, address indexed _trader, uint256 _amount, uint256 _return);Triggered when a change between one of the changeable tokens takes place.
Tests are included and can be run using truffle.
- Node.js v7.6.0+
- truffle v3.2.2+
- testrpc v3.0.5+
To run the test, execute the following commands from the project's root folder -
- npm start testrpc
- npm test
Bancor Protocol is open source and distributed under the Apache License v2.0