In an initial coin offering, the Bancor token project raised about $147 million (115.95 million pounds) recently. According to the Bancor website, the proposed step will make the project to be the second-largest fundraising campaign in the blockchain industry.
Enabling the creation of so-called “smart tokens,” Bancor can hold one or more tokens or digital currencies in the reserve. It lets any party to immediately purchase or liquidate them openly via smart contract, to be done without any counterparty and without relying on exchanges.
Smart contracts are self-executing transactions. As per the Bancor website, the offering has raised 396,720 ether, the digital currency for the Ethereum network. The Ethereum currency last traded at $369.62, according to Etherscan, which provides data on the Ethereum blockchain. Over the last two years, start-ups in the blockchain or distributed ledger space are creating digital tokens or currencies and selling them to the public to raise capital. This is a drift that is potentially troublemaking to venture capital firms, which have traditionally been the primary funders for start-ups.
The chief fundraising attempt via a token sale was The DAO made in May 2016. Designed as a decentralized crowd funding model, with DAO anybody can contribute ethereum tokens in order to turn out to be a voting member and equity stakeholder in the organization.
As mentioned in the Bancor’s white paper, around 50% of the token will be handed over to the contributors in the fundraiser, while the 20 percent owed to partnerships, community grants and public bounties, 20 percent to the long-term operating budget of Bancor’s foundation, and lastly 10 percent to founders, team members, advisers and early contributors.