In a bid to extend the reach of its services, Bancor is opening up shop on another blockchain.
The decentralized exchange protocol is expanding to EOS, a Bancor blog post reveals. Speaking to Bitcoin Magazine, Bancor’s Director of Communications Nate Hindman said the protocol will still allow users to trade Ethereum tokens, while its newest iteration, BancorX, will introduce this functionality to Ethereum’s rival, as well.
“Bancor is not ‘switching’ to EOS. Bancor will continue to support and advance its protocol and liquidity network on the Ethereum blockchain. With the BancorX launch, we are expanding Bancor to also support the EOS blockchain.”
Bancor’s announcement offers a comparative glance at EOS’s benefits over Ethereum. These include near-instant transaction times at 1 second, zero transaction fees and no front-running risks (i.e., unlike Ethereum’s gas structure, EOS transactions are not prioritized by adjustable fees).
Reiterating tidbits of the blog post’s rationale in our conversation, Hindman also said that EOS has more than enough momentum behind it to warrant Bancor’s attention.
“Our primary motivation in choosing which platforms to support is where we think there will be developer traction. As one of the largest developers on Ethereum, it is unmistakable how much traction we’re seeing from our fellow developers on EOS. In fact, data shows that EOS transactions and users have already eclipsed Ethereum. This is likely a consequence of faster transactions and no transaction fees on EOS.”
Holding that “[some] of the most promising blockchain projects are launching on EOS,” Hindman continued to state that the Bancor team expects an influx of token projects to launch on EOS before the end of the year.
EOS: A Rising (If Contentious) Star
Recently launched, EOS has been touted by proponents as an “Ethereum-killer,” a sentiment emboldened by the beating Ethereum has taken in recent months as the market continues its tenuous downtrend. Ethereum being plagued by scalability concerns, restricted development and a network bloated with useless DApps, the faster, more technically elastic EOS is primed to outpace the grandfather of tokens in the long-run, EOS fans claim.
Still, these exuberant takes don’t mean EOS isn’t without its faults, nor does it mean that Ethereum’s core developers aren’t working to neutralize the same problems its critics hone in on.
For EOS’s own baggage, the platform’s supernode structure has been criticized for being highly centralized, and the platform has also drawn flack for its year-long ICO — the source of “$4 billion in [funding]” that Bancor alluded to in a press release related to the announcement. EOS also has transaction control mechanisms in place, something that has led founder Dan Larimer to reconsider the protocol’s constitution.
Such a cyber safety net seems relevant to a protocol like Bancor, which made headlines at the end of July 2018 for a vulnerability that cost users $23.5 million. This exploited bug, though, could have cost the platform even more if not for a feature that allowed the team to freeze some $10 million in Bancor’s native token, BNT.
When asked if this mechanism, which allows block producers to reverse any transaction on the network, could be one that Bancor favors, Hindman noted “that no single block producer (BP) can reverse transactions; rather, it requires the unanimous agreement of all 21 BPs.” He also claimed that, even if BPs were to reverse a transaction, this action is hardly different from the Ethereum community seeking to reclaim funds via hard forks after incidents like the DAO hack.
Also known as supernodes, block producers are up for frequent election and reelection, and Bancor has thrown its own hat in to the ring for one of these positions, with a candidacy in LiquidEOS. Voted in and out by the EOS community, these block producers “can be removed by the EOS community at any moment if they were to abuse this distributed trust,” said Hindman.
“In general, so long as the existence and use of emergency control functions are fully transparent to the world, and users have the ability to easily fork networks if they disagree with their governance structures or execution, networks remain decentralized and censorship-resistant — a tremendous leap forward from the systems that dominate our online and offline worlds today.’
With Two Blockchains, an Opening for Cross-Chain Trades
The expansion will allow Bancor to cover more ground, opening its trading protocol to an entirely new ecosystem of tokens. Perhaps the most notable features of BancorX, then, are the cross-chain liquidity options it will open up to users.
“The EOS-based tokens listed on Bancor will soon be instantly convertible to any Ethereum-based token through the cross-chain Bancor Protocol … these conversions will occur without users having to deposit funds on an exchange and without the need for order-matching between buyers and sellers.”
On Ethereum’s network, Bancor’s protocol creates trading liquidity through token reserves, which allow users to swap between tokens via the platform’s smart contracts. In bringing this feature to EOS, Bancor hopes to fulfill “its intention to be a cross-chain liquidity protocol,” Hindman said.
Having more than EOS in its sights, Hindman hinted that the team plans to expand to other DApp platforms, as well. “Wherever dApp developers are building,” he said, “we will aim to add support. Stay tuned for more news.”
For now, however, Hindman said that Bancor is “hard at work” preparing its technology for launch on the EOS mainnet, which has “no specific go-live date yet.” When ready, the rollout will see initial support for Everipedia (IQ) , MEET.ONE (MEET), HireVibes (HVT) , Lumeos (LUME), MyCryptoBank (MCB) , Chaince (CET) , CoArt (COAT) , Prospectors Gold (PGL) , HorusPay (HORUS) and DEOS (DEOS), and Bancor has made a call for other EOS token projects to apply for listing on the protocol.
To give developers and users a preview of the forthcoming offering, Bancor has published its open-source smart contract code for EOS on Github, and it has also released an embeddable user interface to allow users to trial the smart contract’s token conversion on the EOS testnet. These preliminary offerings come alongside a bounty program, wherein Bancor has fronted 500,000 BNT to be distributed amongst whitehats who find issues with or improve the protocol’s freshly developed code.
Colin is an associate editor and staff writer for Bitcoin Magazine. He's proud to call Nashville his home, where he spends his days shouting at peddle taverns and trying to find affordable parking downtown. If it wasn't already obvious, he holds bitcoin.