Bancor, the third largest and valuable decentralized applications on the Ethereum network, has announced plans to expand to the EOS blockchain..
According to the company’s announcement, the new project, called BancorX will allow users trade between yet to be specified EOS based tokens as well as between EOS and Ethereum tokens.
Read: Beginner’s Guide to Bancor: Network for Converting Tokens With No Counter-Party
The announcement stated that the “decentralized liquidity network” which allows users to trade a range of Ethereum-based tokens without depositing funds in an exchange or matching trades in an order book, will bring that capability to EOS.
“Bancor is now evolving into a cross-chain liquidity protocol,” the company explained. It went on to state that it has published the code for open-source smart contracts on EOS, allowing users to experiment with the protocol in testnet. However, no timeline has been fixed for BancorX’s launch on EOS’ live blockchain.
Faster and Cheaper
Stating the reason behind the launch on EOS, Bancor said the blockchain network’s transaction speed is faster than Ethereum’s. The lack of fees are also attractive, compared to the huge gas fees Ethereum users have to pay to call smart contracts.
Prior to the launch of the network, Ethereum users were charged a higher fee for making transactions. However, as a result of the free transact system, Bancor said that EOS is free of “front-running risk,” since transactions aren’t prioritized in exchange for high fees payments.
Read: Beginner’s Guide to EOS
EOS transactions might be free for users, deploying the dapps on the blockchain is an expensive endeavor, unless developers choose to pass the costs to users.
More so, a relevant feature of EOS that Bancor’s announcement did not include in its benefits is the ability for a supermajority of the network’s block producers—who maintain the EOS blockchain in a way similar to Ethereum’s miners—to reverse transactions successfully.
Powerful Block Producers
While block producers cannot wipe out completed transactions, they can forcibly transfer tokens from one address to another.
In response to this, Bancor’s communications director, Nate Hindman, denied that this feature of EOS influenced Bancor’s decision to expand to that network. Instead, he restated the benefits mentioned in the company’s announcement: faster transactions, zero fees, and resistance to front-running.
The reversal of EOS transactions has proved to be a controversy, as many in the cryptocurrency community see the inability to do these things as the primary appeal of blockchains. This explains why EOS block producers received adverse reactions from online commentators on the network’s decision to freeze transactions of compromised accounts soon after the blockchain launch. Afterward, the network’s arbitration body ordered block producers to freeze yet more accounts.
Similarly, Bancor is well known for its decision to write the ability to freeze and reverse certain transactions into its Ethereum smart contract, as cryptocurrency developer Udi Wertheimer revealed in a detailed blog post last year.
Eyal Hertzog, Bancor’s co-founder, and product architect, defended these strategies, citing the notorious DAO hack, where millions of money were stolen with no means of stopping the theft. The incident eventually push the Ethereum community to hard fork the chain to reverse the damage.
Bancor took advantage of these abilities when it blocked the transfer of the sum of 2.5 million BNT tokens, worth around $10 million at the time, after a security breach in July. Unfortunately, it was unable to prevent the theft of $12.5 million in ether.
In contrast to Ethereum, EOS has a way to reverse damage through controversial but accepted methods. Once the theft is reported to arbitration, block producers can reverse the damage.
Currently, Bancor’s protocol is already in use on the EOS network to govern the market for RAM, a resource needed for the creation of EOS accounts.
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