*** SORRY I was using wrong formula!!! I fixed this article!!! ***
Writing in this article is the simplest example of Bancor’s autonomous price calculation rather than exchanges.
Bancor’s fundraising result was 396,720 ETH, as is also announced on the official website.
And as they set up 20% of revenue as a initial reserve and 50% of BANCOR (BNT) issued will be allocated to investors, wo can calculate the initial price as follows (It is the same as “1 ETH = 100 BNT” as in the crowdsale), though…)
(Total BNT Supply) * 50% =(Ether Raised) * 100
∴ (Total Supply) = 396,720 * 100 / 0.50 = 396,720 * 200 = 79,344,000 BNT
And the price of BANCOR is calculated follows, since CRR is 10%.
(Initial BANCOR Price) = Reserve / (Supply * CRR)
= (396,720 * 0.20) / (79,344,000 * 0.10) = 79,344 / 7,934,400
= 0.01 ETH
∴ 1 BNT = 0.01 ETH
Next, here if there were someone who bought “500,000 BNT” at the beginning, its cost is calculated as follows.
Next 1 BNT = Reserve * ((1 + Bought/Supply)^(1/CRR) -1) / Bought
= (Reserve *((1 + 500,000 / Supply)^(1/0.10) -1)) / 500,000
= (79,344 *((1 + 500,000 / 79,344,000)^(1/0.10) -1)) / 500,000
= 0.01028839359983500 ETH
Assuming that 500,000 BNTs are purchased each time one by one, the cost per 1 BNT will rise as shown in the figure below (it will decline if sold.)
Of course, the quantity and timing are different every time, so the price actually goes up and down slightly more complicated, but Bancor will do this autonomous pricing like this (buy and sell on exchanges except.)
Although I wrote about price formation here, I personally heard the impression that Bancor’s project is serious. Unlike previous ICO projects, I think that it is probably a platform for solving existing economic issues.
I hope that BANCOR will not be subject to speculation.
Since I’m neither a predictor nor a trader, I am sorry if I made a mistake. And it does not refer to etherscan’s value “79, 323, 978.3607422567766216 Bancor”.
Originally Japanese version of my article was published at medium.com on June 14, 2017.