An official proposal has been opened to make the Bancor (BNT) token become a collateral for the Maker protocol and thus be used to generate the DAI stablecoin.
It should be noted that the various proposals for adopting or not adopting a type of token as a collateral, along with its parameters, are agreed upon by the project community voting on the proposals using MKR tokens.
If the majority approves the proposal then the Maker team proceeds to implement it. For example, last month both Kyber Network (KNC) and 0x (ZRX) were introduced as collateral thanks to this system.
How does Bancor work
Bancor (BNT) is an on-chain protocol that provides liquidity to all those tokens that are on the Ethereum (ETH) blockchain but also on EOS, as it is possible to create pools in a completely decentralized way.
The Bancor project declares itself agnostic with respect to the various blockchains, so in the future, the protocol will be extended to other blockchains, while now it is preparing to launch the new version of the protocol.
This version 2 of Bancor will allow having a single exposure on a token when providing liquidity to a pool, as opposed to traditional ones where the exposure is double for all tokens.
This possibility allows Bancor to eliminate impermanent loss, also thanks to the integration of the Chainlink (LINK) solution to have a constantly updated price.
Bancor has all the requirements to become collateral for Maker’s protocol, as it is already possible to create a stablecoin pegged to BNY, called USDB.
As a result of the proposal the price of Bancor is growing in a frightening way: in fact, if we take its historical low that took place in mid-March during the crypto crash, now we see that it is traded at $1.49, so an increase of 1354% in just 5 months.
This also shows that the vulnerability found, later resolved in a few hours, has not affected the integrity of the project and considering the fact that the next v2 version will be released in the coming weeks, then there is the possibility that users are positively anticipating the news.
