A Smart Token™ is a new type of cryptocurrency invented by Bancor. Smart Tokens are built on smart contracts with "connectors" to another group of tokens. This allows them to be bought and sold for any tokens to which they are connected, at continuously calculated prices according to the Bancor Formula.
The Bancor Formula maintains a constant ratio between a Smart Token’s value and the value of the tokens it is connected to, adjusting prices to balance buy and sell volumes in real-time. Smart Tokens can be converted without needing to match two parties, eliminating counterparty risk and decoupling liquidity from trade volume and exchange listings.