What is Mbank and how it works
There was a lot of talks about Mbank. Today, after a week of it's alfa-release everybody can use it and buy/sell BIP or custom tokens. So lets look how it works.
First, lets figure out what is Mbank and why does it so unique and useful. Mbank is a liquidity provider and it's main goal is to give an easy opportunity to buy BIP fast and secure. In fact, Mbank is not a bank in standard meaning of this word. It is a guarantor that the buyer will buy with established price, not higher; and the seller will sell with desired price and there will not be any fraud in that deal for both of them.
There is only one method of buying BIP and tokens - with BTC, but soon there will be more opportunities, for example to buy with fiat money.
Buying BIP
Okay, let's now talk about how to buy BIP using Mbank. When we go to bip.dev (the temporary address for Mbank) we can see this sign first:
It is a warning, that using this alfa test version could bring some risks of loosing your funds. So be careful and always check what are you doing.
Next, clicking "OK" button we can see such a screen:
Here we can see two choices on the upper side: BUY BIP & Sell Bip&Coins. The Buy Bip screen is opened by the default. To Buy BIP we have to input our Minter Wallet address and our email and click "Generate Bitcoin address". Also on that screen we may see a chart of price's changing and actual BIP price that is calculating and changing every 30 minutes. After clicking the button an address to send BTC will be generated and you will be able to buy BIPs.
Now let's make a step aside and realize how does the Mbank works and the price calculates. The price we can see is an average price between all the orders in the Mbank. Here is an example of how does your buying order is filled.
Imagine, that there are three selling orders are active:
- 1000 Bip for $0.08
- 2000 Bip for $0.1
- 5000 Bip for $0.12
Average price we can see is $0.1 for 1 BIP. We send BTC in equivalent of $100 and expecting to receive 1000 BIP. But there are orders above this price and Mbank's engine works in the kind of way like it will fulfill the lowest orders first. So as a result you will get 1000 Bip for $0.08 and 200 Bip for $0.1 - 1200 Bip for $100. Sweet bonus, isn't it?
Of course the scheme of calculating the average price might be some different but the basic principle is the same. Important moment is that you will not buy Bip with the price higher than you see when sending BTC (of course if your BTC will not go too much time and price will change). And if your order is too high and after filling all selling orders below that price all the remaining BTC will be sent back. In the future system will changed and remaining amount will be filled from the funds of DAO.
Here is how the real deal looks like. We've gathered all the remaining garbage from the Binance, sold it for BTC and sent it to the Mbank 0.00620974 BTC. After the first confirmation we saw such a sign, that said we will get 580,72 Bip after the second confirmation of bitcoin transaction.
But as a result we've got 805,74 Bip! So the real price was $0.08 - 30% discount from the average price, sweet bonus for us )). Also after the deal is closed we've received and email with the details of the deal:
Here is a link of Bip transaction and here is a BTC address generated for us.
Selling BIP and tokens.
On one hand it's all easier, but on the other there are some moments to remember. When we buying BIP the deal comes from the pool of orders. But when we sell Bip we establish the Bip price manually. The lower we set a price the faster we'll sell. And if our price will be higher than the average we will have to wait for more time. If our order will not be fulfilled in a week our Bips will be returned to our wallet. To speed up the process we may use our order's direct link to share it in special communities like OTC groups or anywhere else where it is not restricted. The link appears when you create an order.
To buy custom tokens through Mbank we will be able to do it ONLY by using the direct link, so we'll have to give this link to potential buyers. This feature is useful for those who have their own projects and tokens. Custom token's price could be between $0.01 and $1000.
Two maim important things to remember are:
- We can buy any volume of BIPs but we can sell ONLY 1000 Bips or higher, and custom tokens in equivalent of 1000 Bips and higher! DO NOT SEND LOWER AMOUNT! Otherwise you'll loose your Bips !
- Always check what are you going to sell! If you want to sell Bip but input the name, for example "Beep" the system will wait for "Beep" and your BIPs will be lost!
There was the main principles of Mbank's work. We hope this article will be useful and will help you to avoid mistakes in using Mbank.
Mbank gives you an easy way of converting BTC to BIP and back. The system will be upgraded in time and will become better and with more functions. One of the main features will be an opportunity to buy BIP directly from the credit cards.
That's all. Thanks for reading this article!
Best wishes