A smart token is a term popularised by the Bancor protocol, launched on Ethereum in 2017, for a token whose smart contract holds a reserve of one or more other tokens and will always buy or sell the smart token against that reserve. The price is set by a formula that depends on the size of the reserve and the token's supply, so buying mints new tokens and raises the price, while selling burns tokens and lowers it. This let tokens be traded without waiting for a matching buyer or seller on an exchange, an early form of the automated market maker and related to the bonding curve. Bancor's 2017 token sale was one of the largest of that year. The term is used loosely by other projects for any token with built-in programmable features, so its meaning depends on context. Also see liquidity pool.
Last updated 13 Nov 2026