Re: [ANN] Bancor | Protocol for Smart-tokens, solving the liquidity problem

can someone post a good explanation on why BNT is sinking every day?

It's because there is a flaw in the Bancor model and it's allowing the whales to game the system & take profits. Whales are buying at the exchange and selling to the contract small bit by bit due to the price discrepancy.

This drop will continue till the 120k ETH floor is completely gone. Then nobody knows what will happen. BNT can go into a free fall and never recover or it can start rising again. Nobody knows for sure because nobody can predict the market.

It is not a flaw. This is how Bancor model works. Arbitrage is supposed to even out the discrepancy between the exchanges and the smart contract.

One things I do not understand is why they are doing it bit by bit. That part puzzles me.

That 120k ETH floor is the flaw. There is a huge incentive for the whales to crash the exchange price below 0.01 ETH and keep buying cheap BNT to sell to the contract because they know the contract price cannot go below 0.01 ETH. Any whale can put up a huge sell wall at 0.01 ETH to make sure the price doesn't go over that while they stock up on BNT.

I feel this is just the beginning, the worst is yet to come.

Haha, pretty funny how you just gave an example on how the floor gave whales reason to keep the price artificially low to profit when the floor is supposed to keep the price of BNT above a certain level.

Arbitrage is killing the exchange price, kinda surprising they're not creating a larger price gap between the contract and exchange, but when you're throwing around millions of coins/eth doesn't really matter then i guess Roll Eyes