Bancor Closer Look - Surprise

  I was extited about Bancor Project when reading their white paper, however my exitement was short and after going deeper into the subject there is a lot of red flags that were right into my eyes. I did not participate in ICO and now I’m still looking at Bancor and deciding to stay on the side line because of couple of things, that I would like to share with you now.

  1  Bancor project raised ~$150M.  let’s look at the contract of the actual crowdsale

Bancor team pubished the sale terms, including the following:

 · The sale would run for no more than 14 days.
· There would be a “hidden cap” for the amount of funds to be allowed in, which would be revealed when raising 80% of the cap.
· During the first hour, called the “minimum time”, all funds would be allowed in, even if above the “hidden cap”. If the sale goes over the “hidden cap” during the first hour, it would stop immediately at the end of this first hour. Otherwise, it will continue until reaching the “hidden cap”.

As the first hour was approaching its end, about $70M worth of transactions were confirmed by the network, with tens of millions more sitting in the backlog, waiting to be confirmed.
In order to comply with the terms the project published before, they had to stop the “cap-less first hour” at that point, and reveal the “hidden cap” very soon after, once $80M was reached, which was ~80% of the hidden cap.
Instead, they released this update:
We have decided to extend the minimum time to THREE HOURS in order to allow the Ethereum network to process all PENDING transactions and allow everyone who’s transactions have failed to RETRY. Our intention remains to include all early contributors.
Many were surprised by this. Some investors were grateful, as they weren’t able to get in during the first hour due to a high load on the network. Yet others were furious — probably the ones that already managed to get in — they were promised that the cap will be enforced after 1 hour, but now that the “minimum time” was expanded to 3 hours, they were effectively being diluted.

 2 Even more strange

 BancorCrowdsale contract allows its owners for:
- All transactions using the BNT token can be disabled by the team at any time for any reason.

- The team can issue new tokens at any time. (for some reason, the team has the ability to create new tokens arbitrarily, for whatever reason they choose.)


 - Bancor team can DESTROY any tokens FROM ANY ACCOUNT, at any time. (the team has the power to pick any account’s tokens and destroy any amount of them, at any time, for any reason.)

3.  The contracts are fully centralized !!!
For anyone who’s been in crypto long enough, this is a big no-no.

 Ethereum Foundation’s member Nick Johnson wrote in his own report:
Participants should note that the contracts as authored for the crowdsale are not trustless, and depend on the good behaviour of Bancor. Bancor have stated that this is intentional, intended to allow them to respond to and remedy any issues that come up during the crowdsale and in early operation, and that manual oversight will be exchanged for more automated operation once they are confident the system is working as intended. Martin Holst Swende, Security Lead at Ethereum, wrote in his report:
The Bancor protocol implementation has a security model based on centralized trust: the owner of the contracts have (sic), to a large degree, full control over assets traded over the platform… Since the bancor protocol is fairly a complex scheme … it makes sense to have a centralized model, at least initially.

 People in this space expect the control over tokens to be fully decentralized, and if for some rason they’re not, this should be made very clear.

  I would like to see Bancor restructure the contracts to remove the team’s capability to freeze, issue, or destroy assets arbitrarily.   

comment what you think....