Aragon hopes this partnership will help complement the absolute economic abstraction for Aragon organizations by giving even organizations with smaller market capitalization true liquidity.
Aragon, the first DAO whose goal is to act as a digital jurisdiction that makes it easy for organizations to manage themselves has partnered with the Bancor Protocol; to help organizations on Aragon realize their value whenever needed, while helping the communities built on Bancor by giving them the tools to easily disintermediate the creation and maintenance of their communities.
The Bancor protocol enables built-in price discovery and a liquidity mechanism for tokens on smart contract blockchains. The first demo of the Bancor platform was released this week.
Community Head at Aragon Tatu Kärki said:
“WHILE ARAGON ENABLES THE CREATION OF VALUE AND LETS YOU MANAGE ENTIRE ORGANIZATIONS MAKING THEM MORE EFFICIENT THAN THEIR TRADITIONAL COUNTERPARTIES, THERE HAS REMAINED THE ISSUE THAT WHAT IF YOUR ORGANIZATION HAS VALUE, BUT DUE TO THE LAWS OF SUPPLY AND DEMAND, YOU WOULDN’T BE ABLE TO REALIZE THIS VALUE?”
“IN ORDER TO MAKE THESE TOKENS OF THE ORGANIZATIONS HAVE ACTUAL, REAL VALUE, THEY WILL NEED LIQUIDITY, BUT THE SUPPLY AND DEMAND MIGHT NOT ALWAYS MEET THE NEEDS OF THE TOKEN HOLDERS.
TO SOLVE THIS, WE HAVE PARTNERED WITH THE BANCOR PROTOCOL.”
What does this mean for organizations using Aragon?
By partnering with Bancor, Aragon will give every organization using the Aragon Company Registry the ability to have the sort of liquidity that has never been possible before. For organizations using the Company Registry, smart tokens can be created for the organization’s tokens that normally couldn’t achieve similar level of liquidity because their token’s trading volume is too low or belongs to a small niche of users.
With Bancor, all an Aragon organization needs to do is create the smart token in their account and deposit Ether to that account, making the smart token instantly tradeable. Smart tokens built using the Bancor Protocol form an interconnected monetary network that instantly facilitates any request to convert between tokens in the network. The available liquidity will be spread between the different available exchanges, making market depth more shallow, and price volatility higher, in each one.
How will this benefit Bancor users?
Bancor will offer it’s users the option to use Aragon for the governance of their communities that will be created with the Bancor protocol. These communities will gain all the benefits of running an Aragon organization; border-less, permission-less creation of value without borders or intermediaries, managing their entire decentralized communities using the Ethereum blockchain.
This is the second partnership for Aragon this week, as the project announced a few days ago partnership with 0x to allow Aragon organizations to accept and operate with any token.