Bancor, the blockchain startup that raised $147 million in an initial coin offering (ICO) last month, announced today that it has added the first member to its currency-liquidity network. That new member is Invest.com, an online financial advisory, which will be launching a prediction market called Stox, with its own cryptocurrency, STX, using Bancor’s “smart token protocol.”
Bancor eventually hopes to have thousands, even millions, of cryptocurrencies using its protocol, which runs on the Ethereum blockchain. Just as YouTube has allowed anyone in the world to create their own broadcasting channel and embed their video anywhere, Bancor allows anyone to create their own cryptocurrency token and operate it independently of a third-party exchange, Bancor cofounder Eyal Hertzog told VentureBeat.
The announcement of this first member, while perhaps small news, signals that Bancor is operational and ready for business — not something many newly funded blockchain startups can claim.
The real promise of Bancor is that it hopes to inject a high level of liquidity into the cryptocurrency market. Users of currencies running the Bancor protocol can liquidate those currencies into Ethereum’s native Ether tokens or any other Bancor-based currency instantly. As anyone who has been watching cryptocurrency prices crest and fall over the past month knows, the value of these tokens is highly volatile. Bancor’s promise is that it will add a good deal of stability to any currency on its network by ensuring tokens are bought and sold at a specific price (a price that’s not set by investor bidding). “This eases the rise and fall [of a currency] because the price is only affected by the volume someone is buying and selling” as opposed to external forces, Hetzog said.
And while cryptocurrency exchanges currently take a cut off any trade and can take a long time to finalize that trade, Bancor’s protocol ensures the trade occurs immediately and d...