You Asked, We Answered #AMA on Bancor
On October 9 the Stox token has been integrated on Bancor and been the first token listed there. This integration opened the possibility to exchange STX in an easy way with no exchange fees and no liquidity problems.
However new things also bring with them doubts and questions .
There have been comments in the past week as to Stox using Bancor.
Stox considers Bancor as it does any other exchange or liquidity solution and Stox treats Bancor accordingly.
Further, to resolve any discrepancy in expectations from the White Paper with respect to Stox depositing 4% of the STX market cap, Stox will put any difference of the market cap back into the market by using it to purchase STX using Bancor Liquidity Network and will keep the current CRR .
This shows Stox’s commitment to its tokens, its business and to the Community.
On this #AMA we will try to answer your questions and explain the benefit and reason of this integration.
Q1: Please explain the rationale and calculations (if any) used to determine the 2% Weight (CRR) (by MP FX)
Q2: The Bancor team mentions that “market fundamentals” are not affected by Bancor. Can you expand on this with definitions and argumentation please? (by lmnt)
Answer Q1–Q2 : This was a business and financial calculation as it provides the best balance between volatility and liquidity. It is a comparable amount of liquidity to the successful ERC20 tokens. This isn’t a permanently fixed number, it may go up or down. However, it requires more time and volume to best determine long-term best practices. The smart token, just like a traditional exchange, strives for equilibrium between buys and sells — one of free market fundamentals . The difference is that with the smart token this process is smoother over time and prevents short-term speculators from taking advantage of volatility and profiting from sharp rises and falls due to thin orderbooks. We will re-revisit this issue quarterly.
Q3: What are the benefits of activating the smart token before Stox is ready for mainstream? (by bounty hunter)
Answer Q3 :Bancor is an additional means of exchanging crypto . We believe that having STX listed on bancor facilitates STX usage and exchange. Upcoming improvements such as listing of this new exchange on CoinMarketCap, widgets, support for credit cards, and libraries for embedding buy/sell functionality in the website and alpha will further enhance this usage. We have also approached other exchanges as we believe that this would benefit STX greatly.
Q4: What are the benefits of a smart token over a token changer? (by bounty hunter)
Answer Q4 :Just a quick update on terminology — the “token changer” have been renamed to “token relay”. Also the “constant reserve ratio” or “CRR” is now referred to as “Weight”.
The main difference between the two has to do with the total supply of STX. While most tokens operate on a fixed supply and experience volatile fluctuations in price, Smart tokens allow a token (in this case STX) to have an adaptive supply based on demand in the market and a more stable price. Token changers (now token “relays”) allow tokens with fixed supply to enjoy the benefits of an automated, nonprofit market maker as a built in feature to their platform.
Q5: Please explain why the smart token was implemented at 40% below ICO price making it that much more difficult for early investors to get back to a profit ? (by MP FX)
Answer Q5: The smart token was implemented at the first opportunity when there was a simple way to buy and sell on Bancor’s platform (via a UX interface with Web3 plugins — MetaMask, Parity or Mist).
We have determined that having more liquidity is a net positive to token holders thus making Stox more attractive to new participants. This is similar to having the token listed on new exchanges and acquiring additional liquidity. This is part of a strategic objective to lower the barrier for new participants to enter the ecosystem and will be an ongoing effort on all fronts.
Q6: What is your estimate of the amount of USD (at current BNT prices) that would be needed for the smart token to be at ICO price? (by MP FX)
Q7: If Stox reactivated on bancor with a 4% reserve 650k BNT (edit, should be approx 1.3M BNT) and activated at an exchange rate of 1 eth = 200 STX
- how much STX exchanged for BNT would it take to return to today’s market price of 1ETH = 644 STX?
- How much BNT exchanged for STX would it take to double the price of STX to 1ETH = 100 STX?
- Can we see a comparison of those results, and a comparison of how much BNT would need to be exchanged for STX under our current situation to bring the exchange ratio to 1 ETH = 100 STX? (by bounty hunter)
Answer Q6–Q7 : Approx $1.2M of net buying over selling would be needed In order for STX price to reach ICO price in bancor.
For STX price to be around 1.5BNT ( 100 STX =1eth ) a net buying over selling of 1.55M BNT would be needed.
The daily volume of STX is currently around $0.5M/day for perspective and we expect it to rise over time.
Q8: Has an amount of BNT been purchased as of now, that would allow Stox to have a 4% reserve should they choose to stick to their word? (by bounty hunter)
Answer Q8 :Yes, approximately 2950 ETH — 387,000 BNT — have been purchased and put into the smart contract as reserve .We have decided to use the difference in ETH ( 2970ETH) to purchase STX through Bancor’s liquidity network.
Q9 :
- Using calculations from the whitepaper, how many BNT should have been purchased by Stox for a reserve, had they been able to activate on bancor a day after the token sale, and what would have been the exchange ratio between STX and BNT upon activation? How many BNT were actually in the reserve upon activation, and what was the exchange ratio between STX and BNT?Now show us comparisons of the effects of using 2% instead of 4% reserve either benefited or or harmed ico participants.
- Show me why using 383K reserve was a better choice than 1.3M reserve. Convince me it was the right choice.
- Ran some figures again, don’t know how I came up with 2.6M (edit, I was tired and remembered where I came up with it)
148,000k Eth was raised for the crowdsale, selling 50% of STX
4% of that is 5,920 ETH
On August 4th eth was 225.31 and BNT was 2.01
Meaning the reserve should have been
666,917.6 BNT not 1.3 M like I had thought before. (Edit, was tired, it should be 1.3M BNT reserve as thought originally, based on the fact that when it was activated it was based on 4% of the total supply at the then lower market price at the time of activation, implying the 4% is based on total supply, not cirulating supply)
Now starting off with a reserve of 1.3 Million BNT and a 4% crr, make one large sell order of 20M STX to accommodate paying past obligations with STX tokens which were likely to have been sold with or without bancor activation.
Now sell an additional 10M STX to accommodate for people who were dissapointed after the Mayweather fight. That would be 1 out of 3 ico investors.
Now buy 5M STX to accomodate for the people like stratisstoxking, myself, lmnt, Johan, my close friends, family, and many others here who bleed to death catching a falling knife unaware of the extra 20M tokens in circulation.
Where are we at now?
My bet, is we’d be sitting much better as early participants had STOX activated bancor according to the details in the whitepaper.
Prove me wrong. Anyone.
Sorry, I’m tired must sleep, now I remember where I came up with 2.6M
Because it’s based on the total supply, which meant 8% of the proceeds from the ico are needed to have a 4% reserve of the total supply. - Where different scenarios we’re presented, i.e. using the reserve of 383k BNT upon activation compared to calculations had Stox used 1.3M BNT like they were supposed to, calculated and presented as well?
If the different scenarios were calculated, when we will see the results? Before the decision is made? After the decision is made, or never? - Stratisstoxking, I thought you were a fan of bancor?
Bancor has not helped the price of Stox, true, but is it because bancor is not good for the price of stox, or because of a combination of the timing of the activation along with the fact that the reserve was missing more than 917000 BNT?
What is bancors thoughts on this? Is bancor bad for STOX or was the timing of activation and the fact that it had 383K BNT instead of 1.3M BNT at launch the problem. - With that logic, the reserve should have been 2,664,000 USD if 4% is based on the total supply after the token sale. Is this correct?
(by bounty hunter)
Q10: It would seem someone had some similar question regarding the reserve used upon activation on the Bancor smart token chat. Here’s what the Stox admin replied. It seems they considered 59m as the total supply and 29m as the circulated supply. This means they used 2% in launching the smart token and they will change the crr eventually to 4%. My question is this: why would stox take the 29m as the circulating supply, when it already knew that a lot more tokens were wondering around, as they themselves used the tokens to pay. Also how was the marketcap calculated upon the launch of the smart token? Coinmarketcap.com?! (by Jonathan Doe)
Answer Q9–Q10 :
A. Reserve Calculation formula :
STX Market cap (eth) X 4%=reserve(eth)
Reserve(eth)/BNT-ETH rate =Total BNT
Stox white paper states that the reserve in bancor will be 4% of market cap — hence being at ico date 2% of total STX supply. This is evinced by the following:
- The Reserve calculation at ICO finish date was August 4th 2017 .
- The Market cap was 29,600,000 STX, in eth the STX value was 74,000ETH.
- Accordingly the 4% amounted to 2960 ETH.
- The ETH “exchange rate” was 225.31$ and BNT was 2.01$.
Resulting BNT reserve to 331799.8BNT
At the date of integration with bancor we decided to proceed as follows: we transferred 4% of market cap / 2% of total supply in BNT. The BNT reserve that was needed at date of transfer, being 09.10.2017, was 385,745BNT.
B.
With additional STX going into the market the actual cap is now approximately 43,900,358.207 STX which amounts to around 74.61% of the total STX.
As the market cap was increased the proportional reserve percentage decreased and therefore there appeared to be a gap in expectations that the reserve would be 4% of total supply.
And have decided that we will use the difference in ETH of around 2970ETH will be use for purchasing STX through bancor liquidity network and to keep the current CRR as we believe this is the best CRR for the current situation
This shows Stox’s commitment to its tokens, its business and to the Community
C.
We consider bancor as an additional exchange cryptocurrency with the added value of being autonomous and without exchange fees . We do not give it any preferential treatment at all.
Integrating bancor and having STX as a smart token is like having an automated nonprofit market maker built right into our platform
D.
As an exchange — the STX price reflected in bancor is affected by the volume of transactions and market related activity such as supply and demand.
The volume and transactions so far :
Total of 699 transactions with the volume of 960,000$
- 328 transaction to buy STX — volume of 353,000$
- 372 transaction to sell — STX — volume of 607,000$
The AVG daily volume 45,000$
As can be seen the total volume of STX in bancor is around 7–10% of the total of STX market volume.
The price in bancor is determined by the following formula :
E.g. Current STX price :
261902.623[BNT Reserve]/(58,834,617 STX [Total STX supply] X 2%[CRR] = 0.2229 BNT → converted into ETH at 0.00641716 = 0.00143 ETH
Assuming that the CRR is fixed . STX price changes will result only by reserve amount and STX total supply change which are resulted by buy \ sell STX transactions .
Q11: What would be the exchange ratio be today of STX and BNT, if the smart token had a reserve of 4% upon activation?
Remember the 4% was supposed to be from a marketcap after token sale, and the 2% was based on a marketcap after an additional 20 Million tokens hit the market before bancor was activated. (by bounty hunter)
Answer Q11:The current ratio between STX and BNT is market related and is governed by market fundamentals such as supply and demand of STX and BNT, volume etc. and therefore it would not be possible to speculate and give
Q12:When will the volume shown on the app be accurate? Was this a known issue prior to launching? When will volume be reported to CoinMarketCap?
Answer Q12 :Volume is shown in BNT and is accurate .
In future it will be shown in ETH and STX and bancor is working to feature the STX smart token on CoinMarketCap. (by MP FX)
Q13 : How did the Bancor and Stox relationship started? Did the CEO know each other before the blockchain era? Or did they see their product as an good solution for both companies? (by L Wall)
Answer Q13 : It was a natural fit for two companies starting in the blockchain industry .They were introduced to each other in order to provide better solutions to the community.
Q14:Would be nice to see an airdrop of STX to BNT holders and vice-versa Any plans of this in the near future? (by bounty hunter)
Answer Q14: The Purchased STX will be used to give back to our community by incentivizing different bounty programs, Competitions and other business promoting activities.
Q15: Will all tokens be purchased through the Bancor contract and are there price limits to which you will buy tokens?
And you expect to have the purchases complete by the end of next week?
Answer Q15: Yes . will be purchased through bancor’s smart contract .
We are not limiting the purchase by price which will be determined by market conditions.(by MP FX)
Q16:Maybe its a good idea to put really high pressure on Coinmarket cap to implement the BNC/STX so the rest of the public see the massive daily volumes being bought.(by L Wall)
Answer Q16:We are implementing it as we speak. It should be ready soon.
edited (Eyal Bancor)
Q17:how long is the duration of the purchase? (by One Man)
Answer Q17: The intention is to gradually purchase STX from the beginning of next week over the course of a few days .
Q18:Can you give us a clear update on bittrex ? How long ago did you apply and was there going back and forth or just no response ? (By Tzvi)
Answer Q18:We cannot refer specifically to Bittrex, We are currently in dialog to several exchanges and are in different stages of discussing our cooperation.
Q19: This is more directed to Bancor — many people do not realize how easy Bancor is to use because they have not tried yet. What is the plan to attract new users and would you consider a Bounty for people to use the app?(by MP FX)
Answer Q19: We have launched the Bancor Liquidity Network with Stox only few weeks ago. We are since monitoring the activity and fixing UX and other issues and we plan to complete this process before we are taking active steps to promote it.(Eyal Bancor)
