Band Protocol: A Comprehensive Guide to Real-World Data

Most people in the crypto industry are familiar with the concept of decentralized oracles. Originally introduced by Chainlink (LINK), a decentralized oracle network delivers external data to the blockchain. It offers precise real-time data by connecting APIs to smart contracts, decentralized applications, and other products and services. They use various exchanges, data banks, and other sources of trustworthy information as their data source.

However, while Chainlink created the first successful decentralized oracle network, it’s no longer the only one that offers it. Its biggest rival in the crypto industry is a project called Band Protocol (BAND). This guide intends to look deep into Band Protocol and its Band token, and see what they have to offer. With that being said, if you are interested in the project, keep reading to learn everything about it.

What Is Band Protocol?

Band Protocol is a cross-chain data oracle platform. Its primary purpose is to supply real-world data, or external data, to on-chain decentralized applications. Band Protocol was initially launched on the Ethereum blockchain as an ERC-20 token. However, the project migrated to the Cosmos network less than a year after its initial launch. 

During this time, we also saw the launch of Band Protocol 2.0. The update was built on BandChain, and uses Cosmos SDK. Meanwhile, its nodes do not only transfer external data, but they also contribute to block validation and production. As such, they feature a dual role, making them increasingly valuable to the Cosmos’ ecosystem.

The project was founded in 2017 by three co-founders. Those include Sorawit Suriyakarn, Soravis Srinawakoon, and Paul Chonpimal. It was originally launched on the Ethereum network in September 2019. However, as mentioned above, It switched to Cosmos the follwing year, in June 2020. 

Sorawit Suriyakarn, a former software engineer at Dropbox and Quora, now serves as Band Protocol’s CTO. Soravis Srinawakoon, formerly a software engineer at Ericsson and management consultant at The Boston Consulting Group, is Band’s CEO. Meanwhile, Paul Chonpimai serves as the project’s CPO, who was an engineer at Tripadvisor and a web developer at Turfmapp prior to this.

Band Protocol’s Goals

Band protocol intends to become the fastest and most efficient cross-chain data oracle platform in the industry. It is also the most compatible decentralized oracle network, as it works with most blockchains and smart contract development frameworks. This allows it to provide the most reliable data.

Band Protocol has three primary goals. One is to achieve maximum speed and scalability. That way, it can serve a maximum number of data requests with minimal delays.

The second goal would be to establish cross-chain compatibility. Being tied to a single blockchain is a thing of the past. Most projects are seeking to become blockchain-agnostic. In order to become truly competitive, Band Protocol had to do the same. Of course, this was not the only reason why it left the Ethereum blockchain. Ethereum’s network was interfering with its first goal of achieving true scalability. So, after realizing its mistake in choosing Ethereum, Band switched to a faster, more scalable chain.

The third primary goal of the project is to ensure data flexibility. Band protocol achieves this by providing multiple methods of retrieving and aggregating data.

Band Protocol’s Consensus Mechanism

Band Protocolecosystem uses Proof Of Stake as its consensus mechanism. This contributes to the security of its oracle network. The project’s BandChain features more than 90 community and professional node operators, all of which ensure that its network runs smoothly and without disruptions. 

Each node operator had to stake their BAND tokens, doing so discourages any malicious behavior. In return, they get to earn rewards for processing data requests successfully. These rewards come from query fees and rewards issued by the network for creating new blocks.

Becoming a BAND token holder allows users to participate in running the network in two different ways. They can opt to be either validators or delegators. Those who choose to become validators would have to stake their tokens, as mentioned earlier. This ensures data accountability. 

Others can become delegators by either staking or delegating tokens to validators. In doing so, they become eligible to earn staking rewards and collect fees from data requests. There is a third use case for BAND tokens, and that is contributing to the network’s governance. In other words, by holding BAND, users get to vote on various decisions made within the network. That means posting proposals or voting on the ones posted by other community members.

BandChain and Its Features

BandChain is described as a data oracle public blockchain, which exists on Cosmos SDK. It acts as a medium between smart contract platforms and any data source used by Band. In other words, it aggregates and connects real-world data to smart contracts.

The blockchain has over 90 validators at this point. Their purpose is to ensure that the network remains decentralized. Furthermore, it also relies on Tendermint BFT consensus to ensure immediate block finality. BandChain is very customizable, decentralized, cost-effective, and highly scalable. 

BandChain’s Main Features

We mentioned decentralization earlier as one of BandChain’s primary features. BandChain actually uses two separate layers of decentralization by design. That way, it ensures maximum redundancy. Its data oracle is operated by a pool of validators from all over the world. Furthermore, their performance is fully transparent, so it can be monitored with ease. It also uses the DPoS mechanism, which ensures that validators remain incentivized to do their jobs properly.

Another feature that makes Band stand out is the impressive scalability of its network. In fact, this is one of the reasons why it left Ethereum, which was not able to scale. BandChain was built specifically to compute and request data oracle, making it more efficient than competitors. The average block validation time is only 3 seconds, compared to Bitcoin’s 10 minutes or Ethereum’s 10-15 seconds.

BandChain also features data flexibility. Its oracle scripts can be customized in numerous programming languages. This makes them flexible, allowing users to curate the data feed they require. Meanwhile, validators can freely determine where to source their data.

It is also worth noting that BandChain uses something called the Pay-Per-Request model. Essentially, this means that users who require data only have to pay the associated fees. These fees are based on the requests themselves. This makes Band Protocol very economical when it comes to the cost of data requests. For example, users who do not require an entire set of assets do not have to obtain it. Therefore, they don’t have to pay for it.

Details about Band Token (BAND) 

Band token, known as BAND, was launched on September 9th, 2019. The token’s total supply is capped at 132.62m BAND. As for its circulating supply, it currently sits at 123.74 million BAND tokens.

BAND Tokenomics

Band Protocol’s team explained that the project relies on query fees to cover the cost of data providers. This also incentivizes honest data curation. When smart contracts issue a data query function call, this action comes with a fee. The fee is paid with the blockchain’s native currency (ATOM).

Band Protocol utilizes decentralized exchange protocols like Uniswap to convert the currency to BAND. This BAND is then converted into dataset tokens. That way, even though dApps pay in the chain’s native currency, token stakers and data providers are still paid in BAND.

Distribution

During its token sale, BAND managed to raise a total of $10.8 million. Out of its total supply, which is 132,622,690 BAND, 16.87% (22,370,000) was offered for sale. 5% of the token went to advisors, while 12.37% was sold during the launchpad sale. 5% was sold in a private sale, and 10% was used in seed round. The project used 25.63% for its ecosystem, while 22% was kept by the Foundation. Finally, the project’s team got 22% as well.

Use Cases

As mentioned previously, BAND has several use cases in the Band Protocolecosystem. These include governance, serving as a validator, or being a delegator. In addition to that, BAND can also be used in trading, investing, and making payments. According to the project’s whitepaper, Band provides liquidity to data governance groups, and guarantees token values. Band also has dataset tokens, allowing users to store the value of all datasets. 

Lastly, those interested in buying Band can store it in the best Band Protocol wallet, which is MathWallet. This is a Multichain Wallet for Web3 that allows token storage of over 100 chains. Apart from BAND, users can store BTC, ETH, dOT, SOL, BSC, ATOM, and more. The wallet supports cross-chain token bridges, as well as a multi-chain dApp store. 

Band Protocol’s Roadmap 2023

In January 2023, Band Protocol published its 2022 recap and 2023 roadmap. In the blog post, the project said that 2023 has a lot in store for the project and its community.

The project stressed that it intends to focus on five areas — Security, Interoperability, Scalability, Decentralization, and Adoption. Stressing that security is paramount to the developers, it will remain the number #1 priority. As for interoperability, the project said that it plans to roll out three new products in 2023.

Speaking of scalability, Band mentioned that its chain recently experienced an upgrade. However, Band Protocol will continue to work on scalability and improve it with more scalability solutions. The idea is to enable the oracle network to handle the even larger volume of data requests.

Band then spoke of decentralization, stating that it intends to increase it in collaboration with the community. Its intention is to onboard even more validators and oracle node operators, which should help with that goal. Finally, speaking of adoption, Band said that there are several ways in which they plan to boost adoption. One of them is to collaborate with companies in different industries concerning multiple products. As for others, those include increasing utility, which would also boost the intrinsic value of the project’s network.

Finally, the project said that it would split its activities this year into 2 key categories. These two categories include existing product strengthening and new product roll-outs. Together, they will ensure that Band protocols goals are achieved.

Does Band Protocol Have a Future?

Band Protocol is one of the best decentralized oracle networks in the crypto industry. It aggregates and connects real-world data to smart contracts. While it launched on Ethereum and moved to Cosmos, it is considered a blockchain-agnostic and cross-chain protocol. The project features its native token, BAND, which plays multiple roles in the Band Protocolecosystem. 

While many compare Band to Chainlink and question which one is better, the fact is that it doesn’t matter. Many have already pointed out that the crypto industry is an ever growing industry. As a result, there is more than enough room for both projects. 

With all that said, Band Protocol definitely has a future in the crypto industry. Whether it will surpass Chainlink remains to be seen. Nonetheless, Band is still an excellent project. Its oracle network is efficient and worth using, and its token has potential and numerous major use cases.

FAQs

What Does Band Protocol Do?

Band Protocol offers a decentralized oracle network that delivers data from APIs to smart contracts. In doing so, the project helps run smart contracts, dApps, metaverse projects, and more. They all depend on accurate data, which often originates off-chain, and Band helps deliver it.

Is Band Protocol Better Than Chainlink?

At this time, Chainlink is older, more established, and it offers more services than Band Protocol. With that being the case, Chainlink runs on Ethereum, so its network limitations limit Chainlink, as well. Chainlink can offer greater security and data stability, while Band has efficiency, cost savings, and scalability.

Is Band Protocol on Ethereum?

Band Protocol originally launched on Ethereum in 2019. However, in June 2020, the project migrated to Cosmos’ blockchain. As a result, Band Protocol is no longer an Ethereum-based project.