Pitch Competition Galia Benartzi Bancor | Blockchain: Out of the Labs

Hi everyone. I'm Galia, this is Bancor. So the blockchain brings us the internet of money. You might recognize some of these cryptocurrencies, and in fact there are hundreds, almost thousands and counting. They're easy enough to make if you can code. For everyone else, there's Bancor. Bancor is a platform that will allow anyone without any blockchain developers and no technical knowledge to create a fully functional cryptographic token on the blockchain. It's as easy as having a conversation. Up here you can see our chatbots walking you through the process, and I'll demo this live in a moment as well. So who wants to create a token? We call this user-generated currency. One of the most popular examples— we've talked about this all day long here— is seed funding for projects. In fact, Ethereum was funded in this way. Over the past few years, we've seen dozens of teams raise hundreds of millions of dollars by crowd-selling a token. Now any team without any blockchain developers can initiate a crowd sale directly from a chatbot. Our friend Brock— I know you know this guy— thinks that no startup will be funded in any other way a few years from now. Another use case we're extremely passionate about are local and group currencies. Now any neighborhood, community, business, or group can issue their own token and allow members to buy and sell goods and services from each other within a trusted marketplace. Imagine if your Phil's Coffee coin wasn't just redeemable for more Phil's Coffee, but you could use it in a trusted marketplace with other customers to buy anything they had to offer. These are like liquid loyalty points on steroids. But an easy UX for the creation of tokens is just half the battle. We've been talking about this all day as well. Small and new tokens suffer from illiquidity. If you can't trade them for other tokens and there's nothing right now that you want to buy within your network, essentially you're stuck with them. And this disincentivizes users from earning these currencies to begin with. Bancor has solved the liquidity challenge with an award-winning protocol. The Bancor protocol standardizes the creation of smart tokens. Smart tokens hold one or more other tokens in a reserve directly through their smart contracts at a preset constant reserve ratio. This ensures continuous liquidity and automatic price discovery. I don't expect you to go through these formulas right now, but essentially Essentially, the price of a token is determined as a ratio between the token's reserve balance and its supply. You can read more about this on our website by downloading the whitepaper and the smart contracts. Essentially, solving the liquidity problem and reducing technical barriers to entry unlocks the long tail of user-generated currencies. In the internet, we've learned that the long tail can represent 2 to 3 orders of magnitude. Of volume over the hits, and we expect to see this in currency as well. Let me walk you through— let me try and walk you through a quick demo of the product just so you can get a feel. So discover communities. These are demo communities, but if I look at my communities, these are currency networks I'm a part of. And what I really want to walk you through is the ease of creation of a new community. So here we go. As I mentioned, this is all happening through a chatbot. I'm going to open it up in Telegram. It's asking me, what's the name of my community? So let's call it—

Cannabis.

Cannabis Feminists. Please enter an about description. We believe in the power of the plant. Where is my community located? San Francisco. Integrated with location. Please select my symbol. Let's call it CanFM. What's my single currency name? Let's call it a flower. And my plural name? Let's call it flowers. To complete the process, I want to sign my transaction. Enter my password. I've just created a fully featured token on the blockchain. So let's go into— it's time? Yeah. Okay, so you get it.

Cannabis Feminist.

Okay, my question is to finish this demo.

You want to finish it?

Okay.

Okay, Cannabis Feminist. So let's continue. Let's just finish up really quick. Obviously you guys know how this goes. So I'm going to set an icon for my currency. And let's give her a cover photo. So, you know, the point that I'm trying to make is this is basically as easy as setting up a Facebook group. Okay, now let's look at the token. So I've just created a community. I've also created a token. The symbol of it is CAMFEM, as we said. And now you're going to get into the interesting part. So this token exists. What can I do with it? I can initiate a crowd sale. There's some information here about who this is good for. A crowd sale will essentially allow me to collect funds and place some of those funds in my reserve. As I mentioned, the whole point here is that these smart tokens hold other tokens in a reserve that allows them to have continuous liquidity and automatic price discovery. If I don't want to do a crowd sale, I can use advanced setup to essentially endow my token with a reserve. Maybe I'm an NGO, maybe I'm an investor, maybe I have capital from other means, and I'm essentially setting my own reserve. And this is the platform. We haven't launched it yet. Fully featured social environment. You can look at your members. Right now I'm the only member of Cannabis Feminist, but I assure you there are many out there. You can create discussions. You can create an entirely rich ecosystem for the holders of your token. And this ends the demo.

So what are you doing? When are you shooting to go live with this?

So we're launching the Bancor Network Token on May 30th. The Bancor Network Token is essentially going to be the default reserve token for the Bancor platform. Everyone will be able to use it in their reserve, and our Bancor token will be 20% backed with Ether.

Are you planning to do any kind of verification of the projects that are being launched on Bancor to assure that they're valid, legitimate teams doing legitimate things and kind of try to weed out all of the pump and dump and scam activity in the ICO markets?

Not really. We look at this more as a platform play. So if you think of YouTube kind of managing copyright issues, it's a long-tail play. So whatever people want to do with the platform, Obviously there's, you know, measures that you want to take into account in terms of consumer satisfaction. Some of the first projects will be projects that we seed ourselves from the proceeds of the crowd sale. So those will obviously be closely monitored by us and we'll be helping them onboard.

Just remember when Google bought YouTube, it was like a $300 million pool full of lawsuits. Keep that in mind.

Yes.

Well, this whole thing is one big pool of lawsuits.

Well, this is the thing. I mean, when it comes to, like, what are the limits in this? Can you raise any amount? Like, how do you do— how do you end money laundering, for example? How do you prevent people from creating a drug— you know, drug dealers getting together and creating a mini Silk Road with their own token?

Yeah, so first of all, this kind of question reminds me of early internet days, right? Why do we need the internet? Terrorists are going to use it. Drug dealers are going to use it. Sure, true. Everyone's going to use it. But so are a lot of very valid projects. It's not something that we're afraid of per se. That said, also important to keep in mind that this is intended for the long tail of users. So the projects that we envision raising, you know, $20 million, raising significant amount of capital, are crypto teams for the most part, or startups with development resources. This is intended for your average consumer. A local currency is likely not going to raise hundreds of millions of dollars for their reserve. If they had that kind of capital to begin with, they might not need a local currency to provide the additional liquidity. But we'll keep tabs on it, of course.

Is it a 1-to-1 reserve ratio?

No, you actually set your own reserve ratio. You can set it between above 0 and up to 100. Pretty interesting, if you set 100% reserve ratio, you're essentially creating a token basket. There's some interesting features there. Anything below 100, you're actually creating new credit for your community. Currencies that have a reserve ratio that's closer to 100 create less credit but also have less price volatility. Currencies that have reserve ratios that are closer to 0 create much more credit and have more price volatility. So it's important to mention this is in the formulas, but the price calculation is also Proportional to the transaction size. So it's essentially, you know, any—

One last question.

Infinitely small transaction pieces, and each infinitely small piece is affecting the price.

So have you got a waiting list? I mean, what's your ideal launch projects on this other than your own stuff?

So we've been in the community currency space for years. We launched tens of pilots all over the world. We've logged millions of transactions. Not in blockchain currencies, but in centralized and distributed currencies all over the world. All of those projects are dying to use this platform because we've solved the main problem that they encountered, which was the liquidity challenge. So these are projects like Ithacash, maybe you've heard of Ithaca Hours. There are literally thousands of community currencies out there that are looking for a solution.

Thank you, Galia. Give her one more round of applause.