The Exchanges

Q All right. All right. So you've got, obviously, a lot of history here. Venture-backed technology entrepreneur for over 20 years, currently at Bancor Network. What is Bancor Network, and how do you make money?

A So, uh, first of all, Bancor is a non-profit organization, which is a new model that has been rising in the last years. Most important example to that is Ethereum itself. So, have you heard about Ethereum? Yep. It's like the competitor to Bitcoin, and, and they, um, you know, did they, their own fundraising and the entire, um, project in a non-profit entity, and still people that are involved are still making money, to your question, because, uh, those are token-based economies, so everyone that was involved in Ethereum got some Ether in the beginning, Uh, when it was, uh, on 30 cents, uh, uh, price, and today, you know, the price is like, I believe, 200 dollars. So everyone that was involved made a lot of money, but the organization itself that runs Ethereum is a non-profit, and Bancor is similar to that in that respect. Uh, Bancor is also a token, and we are essentially solving a different problem. We solve the problem of liquidity. Liquidity between currency. This is a, A very important thing, because it allows you to-

AI assessment note: “Bancor is a non-profit organization... those are token-based economies... We solve the problem of liquidity”

Q And the ability, the ability to do that really comes from like you guys having relationships with other people in the crypto space, you telling them your vision so that when you do launch on launch day, there's a lot of demand. Is that accurate?

A You know, a lot of the demand comes purely from online sources. So, you know, there's like, um, Reddit and Bitcoin talk and all those Forums that people talk about the different ICOs and opportunities and token sales. There are many telegram groups. So the word is out. People reading the white paper, checking it out. They're looking at the team and the LinkedIn profile. This is also part of the investment. I think maybe, maybe kind of the big players that are based on the fact that, you know, we, we went to every conference in the world. We told our vision to everyone. We wanted to hear feedback about it. So I think I would, if I have to guess, it would be like probably, I don't know, fifty-fifty or, or in, in that range, but a lot of it come from the internet, a lot of it come from people that are in the, in the industry and are investing in those kind of, um, projects.

AI assessment note: “if I have to guess, it would be like probably, I don't know, fifty-fifty”

Q Just clarification there, Ariel. A liquidity between different crypto tokens, or actually converting it into cash?

A So, um, it's, it's actually pretty similar. Um, I'm talking about any kind of, uh, liquidity that works today with crypto tokens, but if you know, there are a lot of assets that are already, like, moving to the blockchain, like, It's tokenized on the blockchain. So there, you, there's a token that represent gold and token that represent dollars, and you can actually convert those tokens back to gold and back to dollar, uh, when, when you want. So, so real assets from the real world are already represented on the blockchain. So you can really say that this is an environment that can host everything. Uh, and, and we solved the problem of, of, uh, being able to convert one form of store value, currency, bond, whatever, whatever it is, a token One to another, which is what people use stock market today. And we provide like a different way that does not require traders bid and ask automatically finds the market rate according to some formula. It's a interesting stuff, but it's a alternative.

AI assessment note: “I'm talking about any kind of, uh, liquidity that works today with crypto tokens”

Q the top five holders, right, they make up over 60, well, over 55%, right, of the total kind of tokens held at almost, you know, forty-seven million, right? Is that kind of, that kind of power law, I mean, is that a risk Like, what if one of those holders gets, you know, bearish on it? I mean, can it, can it essentially crash your token with, with one sale?

A I think, um, this is something that you see a lot in the crypto space. And I think it's natural. Uh, it's, it's almost, uh, you know, like having some lead VC and, and, and, you know, some, some followings. So here is a, in very large number. Uh, and, um, from, from the experience that we've seen, uh, those people, even if they, you know, get bearish, they're not gonna just dump everything. They're gonna slowly liquidate, uh, if, if, if they wanna do that. But there's also, You know, um, especially among the, the whales, that's how they're called in, in our industry, those, you know, people who hold a lot of crypto because they got in there pretty early. Uh, you know, those, from my impression, are the biggest believers in the, in the future of the space, and they really do everything in order to promote it, and, and to strengthen it, and, and to make sure that, that this, um, whole thing will succeed, because what's, what's, what's, To build essentially a new financial ecosystem. That's a huge goal. This is like, you know, it's, it's bigger than the internet in, in terms of, you know, the implication that you can, that you can expect from that move. Uh, so, you know, you really see a lot of people that come with great kind of, uh, mission and, and, and sense of purpose. So I don't think that, that is a big risk that someone will just dump everything on the market. But, uh, I t…

AI assessment note: “I don't think that, that is a big risk that someone will just dump”

Q point. They took Four million bucks out, which is now literally in their BB&T or their Chase bank account. They left 20% in. I just, I give that example so that people can understand kind of how this works, right, you know, from the crypto asset all the way to money in a BB&T account that they can go use to pay salaries. Where do you fit in that ecosystem?

A So the whole model of the price that is changing, as you know, it used to be at 10 dollars, and today it's 200 dollars per ether, and the prices between all the currencies Between cryptocurrencies and regular currencies is always changing. And, and it's changing because there are market and people buying and selling and your ability to convert one to the other is called, is what I call liquidity. It's the ability to, to, to really, uh, you know, to change my shekels to dollars or Bitcoin to ether. What we're doing is providing an alternative. We believe a much better solution for liquidity relative to the solution that exists today. Today, the solution is Exchanges, like, like Coinbase. Coinbase has an exchange, it's CDAX, so that's their exchange, but there are many exchanges like Polonix, and, you know, MT Goffs used to be an exchange. Currencies between each other to exchanges, which is based on smart contracts. It's automated. It doesn't require any, any central service. So it's a very novel kind of concept of how to change between currencies.

AI assessment note: “What we're doing is providing an alternative. We believe a much better solution for liquidity”

Q Okay, and you raised, when you, when you, did you basically say we want to, you've said we want to raise a hundred fifty-three million, and then you figured out how many ether you'd have to sell to hit that mark, and then that's, that's how you did it, or like, how did it work?

A So, we, we did something which is more open. We said that for the first few hours, everyone can, that one invest will have the opportunity, and, and, According to that, everyone will get exactly the same rate. Uh, we also did something nice that, uh, that said that above, like, a specific amount, uh, we will not take any of the funds to ourselves, but we will put it in, like, a special smart contract that will offer to buy back the token at the original price. So it gave, like, nice, about more than a 100,000 Ether in that pool right now. It's a 100,000 Ether that people can go and sell the token back in the original price. So it provides the investors some kind of protections and, and, and security that, that the price is not going to drop so fast. There are a 100,000 Ether that are willing to buy back the token in the initial price.

AI assessment note: “we did something which is more open. We said that for the first few hours”