Bancor

Bancor was launched with the largest initial coin offering (ICO) at the time. It collected $153 mln, distributing half of the initial BNT supply in the process. The other half was distributed among Bancor's founders, investors and treasury. Bancor was the first DEX to use an AMM to facilitate swaps between Ethereum-based tokens. Instead of a central order book that matched buyers and sellers according to their bid and ask prices, the AMM fulfilled orders with on-chain liquidity pools.

The project was faced with illicit activity. Hackers stole 25,000 ETH, 2.5 million BNT, and 230 mln NPXS tokens from the Bancor protocol. The team was able to recover, freeze or destroy the stolen BNT, but no ETH nor NPXS were recovered.

Bancor team's recovery sparked controversy around the protocol's centralized governance that enabled the team to unilaterally manipulate the BNT supply. The event pushed the team to decentralize its platform by transitioning governance to a DAO. The Bancor DAO went live towards the end of 2020. It allows BNT investors to propose and vote on updates and protocol governance issues.

Bancor announced it would airdrop its entire Ethereum reserve to BNT users. The team also changed the tokenization model to allow inflation and reward liquidity pools, oracles and developers suggested by the community.

Bancor v2.1 was launched with a new BNT supply and governance updates to address problems common to AMM-based exchanges. Bancor’s previous iteration required LPs to deposit two assets to each pool, BNT and its paired token, in proportional amounts. This often resulted in involuntary exposure to either cryptocurrency. Liquidity providers experienced impermanent loss when asset prices on Bancor lagged behind prices elsewhere. The new BNT supply is elastic to mitigate these problems. Single-sided deposits are now accepted and paired with newly minted BNT, eliminating involuntary exposure. As LPs deposit BNT in the same pool minted, BNT is burned to balance BNT's circulating supply. Bancor now requires a minimum BNT staking time to receive vBNT, the protocol's new governance token. The Bancor Vortex provides BNT depositors with additional rewards for subsequently staking their vBNT.