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band-protocol

What Is Band Protocol? How To Buy, Expectations And Predictions. Everything You Need To Know About BAND

Many blockchains run into the problem that they are not easy to use practically. For example, it must be possible to link them to the outside world, so that companies and organizations can benefit from them. Band Protocol (BAND) is a blockchain that has a solution for this. BAND’s blockchain can use real-world data in the blockchain. That creates many new opportunities.

What is Band Protocol (BAND)?

Band Protocol is a decentralized oracle platform that collects real world data and APIs and then links it to smart contracts. So in this respect it is very similar to Chainlink . The data from the blockchain is also referred to as on-chain data, while the data coming from the real world is referred to as off-chain data. There are only a few blockchains that are able to link these two different types of data together. A lot of people don’t know that there is a whole lot involved.
band protocol overview

We said it just now. Band Protocol is very similar to Chainlink, in other words it is an alternative to Chainlink. In fact, it was also developed as a competitor to Chainlink, with a number of differences that make Band Protocol a major competitor to Chainlink.

The main difference between Chainlink and Band Protocol is that Band Protocol v2 uses its own blockchain called BandChain, based on Tendermint, with a Delegated Proof of Stake (DPoS) consensus algorithm. It works in the Cosmos ecosystem. Chainlink, on the other hand, is not a blockchain, it is a kind of network of nodes that only work as oracles are solely focused on delivering data between entities. There is no proprietary blockchain, as it is all based on Ethereum . 

Band Protocol mainly focuses on serving the world of decentralized finance, which is more commonly known today as DeFI .

In fact, many DeFi dApps require price streams to work, and Band Protocol aims to provide robust and tamper-resistant streams. The flexible design of Band Protocol’s oracles allows developers to use any real-world data, including sports matches, weather, random numbers, and more. In fact, developers can create custom oracles with WebAssembly.

Band Protocol usage situation

This solves a whole lot of problems. Because this makes it a lot easier for organizations, companies and governments to use blockchain. Normally, it is very difficult for these organizations to implement blockchain. Everything is still on central systems, and it is extremely difficult to just switch to the blockchain.

But it can also provide additional user situations. Just think of insurance companies. When you as an insured have processed a policy in a smart contract , damage can be paid out without the actions of employees. The blockchain can then look at, for example, the weather and satellite images. This ensures that problems are solved much more objectively.

The founders of Band Protocol

In 2017, Band Protocol was developed by Soravis Srinawakoon, Paul Chonpimai and Sorawit Suriyakarn. In the past, Soravis was a software developer at Ericsson and a management consultant at The Boston Consulting Group. Paul Chonpimai used to be a web developer at Turfmapp and an engineer for Tripadvisor. Quora Sorawit was a software developer for Dropbox in the past.

The Band Protocol team currently consists of 20 employees, almost all of whom come from Asia. The blockchain and token of the same name are supported by, among others , Binance , Dunamu & † Partners, Spartan Group and Sequoia Capital.

band protocol team

BAND Token

This protocol also has its own token called BAND. BAND was launched on Binance in the form of an IEO (Initial Exchange Offering). At that time, only select Binance users could participate in the sale. The BAND token was listed at a price of $0.473 on Binance. 

A total of 27,370,000 BAND tokens were then sold. In total there are 100,000,000 BAND tokens, which is why 27.37% of the total number of tokens have already been sold at that time. The IEO has enabled the company to raise approximately USD 10.85 million.

BAND debuted on public crypto exchanges in September 2019 and cost about $0.6. At that time, only the first version of the BAND protocol, based on Ethereum, still existed, and until April 2020, the price of BAND remained fairly constant.

With the release of version 2 of the protocol, and especially the new blockchain called BandChain, the price started to rise. In July, it was already worth more than $4.5, while in August it was about $15.

On September 2, it briefly crossed $15 before falling back to $9. Then it went back to $6.5. Since the launch of BandChain, BAND’s price first rose by 2,400% in four months and then dropped by 55% in less than a month. 

How does BAND work?

Band Protocol thus provides a connection between the blockchain and the outside world. More specifically, the Band Protocol provides a decentralized data oracle by making data available for querying on the blockchain. It uses a Delegated Proof of Stake consensus algorithm to ensure data integrity. BAND aims to be the data infrastructure layer for Web 3.0 applications, passing decentralized off-chain data to the smart contract.

To better understand how the Band Protocol works, we first need to take a closer look at what exactly the problem is and why it has not yet been definitively solved.

data-problem-by-band protocol (1)

Problem of the dApps

As mentioned earlier, for many decentralized applications (dApps) it is essential that the smart contracts can obtain reliable data from the real world. For example, all major decentralized finance projects (DeFi) depend on an oracle to function and obtain accurate time-sensitive data.

dApps for betting and placing bets determine payouts based on a verifiable random number or an oracle’s real world event. To ensure complete decentralization, there must be a secure bridge between reliable off-chain data and dApps.

Although several attempts have been made to solve this problem, most projects are either insufficiently decentralized or difficult for developers to integrate. But it’s also common to lack the economic incentive to provide quality data for the blockchain.

The Band Protocol solution

Now that we understand the problem with current dApps, let’s explain how Band Protocol aims to solve this problem.

To access external off-chain data, dApps directly use those public smart contracts APIs from Band Protocol. So no use is made of the oracles that are located directly outside the blockchain. These data points are managed by BAND’s network and provide the framework for dApps users and developers. This way they can change, manage and check data sources themselves. The mechanism that BAND uses ensures that the data entering and leaving the blockchain is reliable. It is therefore not possible to manipulate this data. The consensus algorithm therefore also offers security for BAND, although it is done in a slightly different way than with most blockchains.

dapp band

 

How does Band Protocol ensure that the data is secured?

So the network can monitor and manage the data. This is done by means of the ‘Token Curate Data Sources’ (TCD) method. This method is suitable for compiling objective information from a large number of data sets, such as asset prices, blockchain transactions and real world events. For example, think of the weather, the results of the elections or the bank balance of a bank account.

Someone who wants to provide data to the blockchain can use BAND tokens for this. For this, he must register as a candidate by deploying tokens that meet the requirements, and also serve as collateral. These tokens can then also be used for other purposes. Think of decentralized lending, derivatives trading and making payments.

streamlined-interactions-between-band protocol

Rewards provide quality data

Users must therefore be encouraged to provide off-chain data to the blockchain. If this doesn’t happen, the entire blockchain is useless. Therefore, users get a reward when data is supplied to the blockchain. But the users in the network who voted for the data provider also receive a reward. For example, the blockchain wants to enable the network to provide data and check it. 

The network of the blockchain can thus vote for certain providers of data. They will then move up the rankings, making the data they provide reliable in the long run. That can increase potential (future) earnings, and increase the value of each BAND token holder.

This whole mechanism ensures that everyone involved in the creation of a dataset receives a coordinated economic reward. Due to the competition within datasets, the quality of the data is improving. After all, people always want to provide the best data in order to be chosen that way. So that is bearing fruit. The best part is that everyone benefits from this competition.

Band Protocol (BAND) vs. chain link (LINK)

Band Protocol is probably Chainlink’s biggest competitor. Since there are hardly any alternatives to decentralized oracles, these two projects are currently among the most important in this niche. Still, there are some key differences between the two protocols.

LINK is not a purely decentralized service, as the company behind it decides on partnerships and also partly on who provides the data. So, the users have to abide by the company’s decisions as the LINK rates also depend a lot on it. In terms of decentralization, we can say that Band Protocol is better than Chainlink.

The situation is different with the Band Protocol. This is an open, decentralized oracle protocol that empowers users to make decisions. Still, Chainlink has been around much earlier and has been able to forge large and important partnerships during that time. Band Protocol therefore lags behind Chainlink in that area.

In addition, LINK already has a market cap that is 20 times larger than BAND’s. Whether Band Protocol can reach the size of Chainlink is currently not clear. At the moment, DeFi is still in its infancy, which means that it still has great growth potential. So the future can go either way, and that is why there is little to say about it at the moment.

band protocol chain link

Top part is Band Protocol vs Chainlink (Bottom)

What is DeFi, and why is it growing so fast?

A concept that is very important at Band Protocol is DeFi. It stands for Decentralized Finance, and it is getting more and more popular every day. This is because we see that central systems are actually less and less suitable. Especially when it comes to financial central systems.

Just think of a sofa. When you want to transfer money, it often takes a day before the money is visible in the account of the recipient. Especially when you transfer money abroad. In some cases it is not even possible to transfer money to certain countries. If it is possible, you will in many cases pay high transaction costs.

These types of services could also be performed via the blockchain. There is then no intermediary, which reduces costs and time. For example, even notaries can be replaced by smart contracts. These are smart contracts that are on the blockchain. Appointments can be saved here. As soon as the parties involved have complied with the agreements, the contract will automatically execute itself. This clearly ensures that there is less need for distrust between the parties.

DeFi is getting bigger and bigger, and it is expected to change the future of financial services. Band Protocol clearly wants to play a major role in this! 

Band Protocol Course

Where can you buy Band Protocol (BAND)?

Band Protocol is currently for sale at various crypto exchanges. Since 2019, it has gone on sale on public exchanges. That is why you can now buy it from Binance, ByBit, Coinmerce and Bittrex, among others. Most of BAND is bought with Tether (USDT), Bitcoin (VAT), USD, EUR and GBP.

Often you can quickly find out on the website of the crypto exchange whether they sell BAND. You will notice that this is possible at almost all crypto exchanges.

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