Thank you, @allbert, for your lecture this week on blockchain oracles. Great to learn that blockchain oracles offer an information bridging service to other blockchains.
Today, I will be talking about the Band Protocol, a blockchain oracle that serves in Ethereum blockchain, Cosmos ecosystem, and Polkadot ecosystem.
To make this piece in an orderly presentation, let me list out what I will be covering as sub-titles below.
1.History and Description of Band Protocol
2.Functionalities and real-life applications of Band Protocol
3.Pros and Cons of Band Protocol
4.Future developments and new projects in Band Protocol
A brief history shows that the Band Protocol was launched in September 2019. It was first launched as an ERC-20 project on the Ethereum blockchain before being transitioned to the Cosmos ecosystem in June 2020.
This was followed by a release of the Band Protocol 2.0 and currently, the Band protocol is built on BandChain but uses Cosmos SDK.
The Band Protocol serves as a decentralized cross-chain data oracle platform, that bridges the gap and relays data between real-world data and APIs to smart contracts.
The BandChain, on which the protocol is run, is an independent Delegated Proof-of-Stake (DPoS) blockchain built on Cosmos SDK. It should be noted that the BandChain algorithm is a customized consensus that performs oracle computations, such as settlements, aggregation, and data sourcing.
The release of the BandChain mainnet was done in four phases as follows:
Phase 0: the foundational version to enable BAND token transfer and staking for validators, launched in June 2020.
Phase 1: The support permissionless creation of data scripts that can be customized and query public and permissionless data sources. It was launched on October 15, 2020.
Phase 2: This phase aims to enable API providers to commercialize the data on-chain in a way that is trustless and get their revenue on-chain.
Phase 3: this phase supports oracle scripts that are private/identity-based. It also supports more payment options in the ecosystem, thus allowing developers to pay with a token of their choice or subscription model. This is the completion of the BandChain decentralized network that brings the data bridge between smart contracts and traditional business enterprises.
BandChain is designed to be compatible with most smart contracts and blockchain developmental frameworks. Its work is to pull out data from external sources, aggregate it and package it in a format that can be used and verified across many blockchains.
Token information
BAND is the native token of the Band Protocol. It has a total supply of 100,000,000 BAND, a circulating supply of 35,191,821 BAND, a market capitalization of $264,164,679, and a current price of $7.50642 at the time of this research.
One may ask what is the need for BandProtocol?. In this section, we are going to answer this by looking at the functions and real-life applications of this protocol.
The band protocol acts as the middle layer of the information domain, which carries out various operations between smart contracts or decentralized applications and other data sources. It works by collating data coming from DAPPs, query the data through corresponding data sources, and report the results back to the application.
The Band Protocol stands out from other blockchain oracles by offering its services in the following four ways:
Decentralization
The oracle infrastructure is built in such a way that it maximizes redundancy in two layers. On the first layer, the blockchain is made to be accessible by a globally distributed pool of validators. Their performance and actions can be monitored and verified by anyone around the world.
On the second layer, the validator performance and entire data flow are available for verification and audit by anyone.
Flexibility
The protocol is completely flexible. This is achieved because it is built to allow absolute freedom in terms of data requests, computations, and mutations that can be done on the data.
Data sources form the fundamentals in BandChain. This specifies the primary sources from which BandChain’s validators get or retrieve data.
The data is regarded as data scripts and comes in form of nodes, which specifies two things: first the set of data sources that validators will use as a reference to query data from, and second, the method through which to aggregate the result from the data sources into final results.
Scalability
BandCahin performs request and computation of data, as clearly stated in its functions. It has an average block time of 3 seconds. This is far more scalable than Ethereum’s 10-15 seconds and Bitcoin’s 10 minutes. The transactions are very fast.
In addition, the computations of data from the point of request to submission on-chain are quite efficient.
Cost
The protocol allows users to pay per request, thus removing the extra cost of paying in bulk for data that may not be delivered. This also serves the cost of paying for a whole set of information for a group of assets, when in reality you needed data for just one asset.
Pros
1.BAND is readily available to be traded globally on exchanges with trading pairs with major assets like USDT, BTC, and ETH. Investors are confident with the project.
2.Band protocol has a list of amazing products such as BandChain Node - BandChain Explorer - IBC Bridge - Oracle Scripts - Technical Specifications.
3.It has a strong capital base with growing market capitalization.
Cons
1.It offers similar services to other blockchain oracles, thus the risk of competition.
2.No information about founders and team members.
1.Strengthening Band Oracle Infrastructure for Layer-1 and Layer-2: There is a plan to expand the engineering crew in a way of ensuring that any abnormality in the protocol is fixed in a 24/7 period. This is their 2021 plan.
The current price feed infrastructure will also be improved to become a more streamlined set-service for new token symbols and new projects in terms of chain support and oracle scripts.
To further strengthen the decentralization of the system, new validators will be added to the already existing 72.
2.Adding Cosmos IBC Compatibility to BandChain Phase 1: The engineers of the Bandchain have begun work to bring IBC compatibility to BandChain. This will make it possible to natively utilize Bandchain oracle by using the Cosmos-based blockchain. Also, the integration to other blockchains will become seamless.
3.Developing On-chain Verifiable Random Function: The initial implementation of this is ongoing and the team is working with researchers, industry-leading academics, and dAPPs which will test the design before releasing it to the public.
4.Releasing BandChain Phase 2: Commercialization of On-chain Data: The team is working with institutional-grade data providers like Brave New Coin and CoinGecko and others to develop on-chain revenue generation through BandChain.
When this is in full stream, it will enable data providers to monetize their paywalled APIs to DAPPs with great transparency.
5.Improving Developer Experience: This will strengthen third-party developers to make use of more utility products from Band Protocol Oracle infrastructure without waiting for assistance from Band Foundation.
This will make it easy to onboard new dAPPs in a permissionless and self-service manner, thus raising the level of decentralization higher.
The Band Protocol is a long-standing blockchain oracle that has commanded trust in the area of bridging the gap between smart contracts and the real world. Great emphasis is laid on their scalability, among other functions that enable it to perform data collation and computation effectively and on time.
Thank you for reading.
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