What is Band Protocol?
Band Protocol (BAND) is a decentralized blockchain oracle provider. Decentralized applications or dApps can leverage Band Protocol to access outside world data for feeding it to their smart contracts through Band Protocol APIs. Smart contracts are all the rage these days, and so are the blockchain oracle projects that play a crucial role in the successful implementation of smart contracts in real-world projects.
Many DeFi protocols employ smart contracts for the automatic execution of transactions. Without real-world data, smart contracts cannot execute the transactions. That’s where projects like Band Protocol (BAND) make a difference. Band Protocol aggregates outside world data and feeds it to smart contracts via APIs. It is quite interesting that the blockchain oracles of Band Protocol have a dual-use. Not only does Band Protocol’s blockchain oracles transmit data, but it is also involved in block validation.
The History of Band Protocol
Founded in 2017 by Paul Chonpimai, Sorawit Suriyakarn, and Soravis Srinawakoon, they launched an ERC-20 token in September 2019. That changed in 2020 with the launch of Band Protocol (BAND) 2.0, as that’s when Band Protocol moved to Cosmos Network. The founders of Band Protocol are all talented people with impressive backgrounds. Soravis Srinawakoon, for example, is a software engineer and has also worked as a management consultant. Currently, he is heading Band Protocol as its CEO. Before founding Band Protocol, he was working with Ericsson and Boston Consulting Group.
Sorawit Suriyakarn is a software engineer and is currently heading Band Protocol as its CTO. He has worked with reputed companies like Quora and Dropbox. Paul Chonpimai, the third founder of Band Protocol, is currently the CPO of Band Protocol. He was working as a web developer and engineer before he joined Sorawit and Paul to launch Band Protocol. He has worked with the likes of Tripadvisor.
As for the backers of Band Protocol (BAND), the company has raised $7.9 million so far from 10 investors. Band Protocol has gone through 4 funding rounds, and their last funding round was in 2019. Their investors are Binance Labs, Sequoia Capital India, Binance Labs, ZBS Capital, Yield Ventures, Woodstock, The Spartan Group, Iconium, Dunamu & Partners, SeaX Ventures.
What Problem Does Band Protocol Aim to Solve?
There are a lot of data providers in the market. But there’s no way of guaranteeing the authenticity of data. Real-world data is crucial for the success of many DeFi protocols, but trusting a centralized data provider can prove to be counter-effective for smart contracts.
To ensure true decentralization of DeFi protocols, they can access truly decentralized oracles such as Band Protocol (BAND). Considering their decentralized nature of operations, decentralized oracles are better for feeding real-world data to their smart contracts compared to the centralized oracles. On their website, Band Protocol sums up quite perfectly what they do:
“Band Protocol resolves the centralizing effect of the oracle problem by providing a robust, secure and performant way for smart contracts to interact with any off-chain information – maintained by community governed data providers.”
How Does Band Protocol Work?
We already know that Band Protocol (BAND) feeds off-chain data to smart contracts via APIs. So, what does this exactly mean? It means that Band Protocol serves blockchain queries with off-chain data, which it feeds to the smart contracts through its decentralized data oracles. Data integrity is crucial for smart contracts, and Band Protocol utilizes proof of data integrity to ensure the data that its decentralized oracles feed into smart contracts is not compromised.
Here’s an interesting thing about Band Protocol. The decentralized applications or dApps do not rely on oracles that exist outside the blockchain. Instead, the dApps tap into the community-managed smart contract data points of Band Protocol. The developers and dApp users follow a specific framework to manage and operate the data sources. This framework ensures that the data is accurate and reliable.
It would be fitting to explain how Band Protocol is different from Chainlink, the biggest name in the blockchain oracle space. Any smart contract that interacts with Chainlink will have to remain in asynchronous interaction with the data layers. There are some drawbacks to the way smart contracts interact with Chainlink. The most prominent drawback is the delay in transactions as it involves sequential execution and confirmation of transactions.
The Data Reliability Process at Band Protocol
In the Band Protocol (BAND) ecosystem, the collective process of curating, controlling, and managing data is known as Token Curate Data Sources (TCD). It is perfect for collecting objective data like blockchain transactions, stock prices, and more. It leverages multiple data sets to collect such extensive data.
It is important to note that Band Protocol does not have a say or have any control over the way the data will be treated. Band Protocol is only acting as a platform of sorts where its community makes decisions on data curation & treatment.
BAND Tokens
In 2019, Band Protocol conducted an initial coin offering for its BAND tokens, generating $5.85 million in the process. Band Protocol’s ICO took place on Binance Launchpad. At the time of the ICO of its BAND tokens, the supply of BAND tokens was 100 million. They had also sold $2 million worth of BAND tokens through a private sale.
As per sources, more than 12 million BAND tokens were sold during the ICO of BAND tokens. The early investors of Band Protocol received 27% of the BAND token supply. Their development team received 22% of BAND tokens for the development of Band Protocol, whereas 25% of BAND’s supply was kept aside for the Band Protocol ecosystem.
Bottom Line
Considering that the traditional financial market is expected to reach a market size of $26.5 trillion by 2022, we can say that the DeFi space has even barely scratched the surface. There is a long way ahead. During DeFi’s journey to reach a market size of a trillion-dollar or more, decentralized oracle providers like Band Protocol (BAND) will play a crucial role. Without uninterrupted access to real-world data, decentralized applications cannot achieve their true potential. That is why Band Protocol is here to stay and make a considerable impact in the DeFi space.
