Investing in Band Protocol (BAND) – Everything You Need to Know

What is Band Protocol?

Band Protocol 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 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.

Another advantage that Band Protocol has is its cross-chain functionalities. Considering that many DeFi protocols are now also built on other blockchains like Algorand, Solana, among others, Band Protocol's cross-chain oracle network is likely to find a lot of takers. But in its mission to empower scores of DeFi protocols with outside world data, it faces strong competition from its bigger rival Chainlink. 

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 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, 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. 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.”

The growing clout of decentralized applications is making it obvious that the demand for decentralized oracles will remain high in the future as well. That's the market that Band Protocol aims to capture with its decentralized cross-chain oracle network. The core vision of Band Protocol is to make real-world data easily available to decentralized applications. They ensure data integrity through economic means, specifically through its BAND tokens.

How Does Band Protocol Work?

We already know that Band Protocol 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. 

Band Protocol, on the other hand, has made the process simpler. Other solutions available today require dApps to run data query for data, whereas Band Protocol feeds data to multiple dApps from the same data sets as data is already available.

The Data Reliability Process at Band Protocol

In the Band Protocol 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.

Anyone who holds BAND tokens, the native token of Band Protocol, can become a data provider. All they have to do is feed data into a data source contract of Band Protocol. Then, they must deploy a minimum amount of tokens to qualify for becoming a data provider, which will act as collateral. This collateral ensures that the data provider remains honest and only provides intact data to the system. As for dApps, they can access the data through the data aggregator feeds of Band Protocol.

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.

There are multiple use cases of BAND tokens. The first use case is for becoming a validator on the Band Protocol network. Anyone who wishes to become a validator on Band Protocol has to deposit collateral or stake BAND tokens. The BAND tokens also power the economy of the Band Protocol ecosystem. Anyone who holds BAND tokens will also receive voting rights. They will have a say in any upgrades or changes that will occur in the Band Protocol.

How to Buy Band Protocol (BAND)

Band Protocol (BAND) is currently available for purchase on the following exchanges.

Uphold – This is one of the top exchanges for United States & UK residents that offers a wide range of cryptocurrencies. Germany & Netherlands are prohibited.

Kraken – Founded in 2011, Kraken is one of the most trusted names in the industry with over 9,000,000 users, and over $207 billion in quarterly trading volume.

WazirX – This exchange is part of the Binance Group, which ensures a high standard of quality.  It is the best exchange for residents of India.

Uphold Disclaimer: Terms Apply. Cryptoassets are highly volatile. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong..

How to Store Band Protocol (BAND)

If you seek to make a major investment in BAND or if you are planning on HODLing this crypto for long periods of time, a hardware wallet is the best option. Hardware wallets keep your crypto stored offline in “cold storage.” This strategy makes it impossible for online threats to access your holdings. The Ledger Nano S or the more advanced Ledger Nano X both support Band Protocol (BAND).

Band Protocol on its way to Become the Go-to Decentralized Oracle Provider

The world of decentralized finance is growing rapidly. Such is a growth that within one year, the total value locked (TVL) decentralized finance touched $40 billion. Yes, you read that right! In February 2020, the total TVL of decentralized applications stood at only $1 billion. Many experts also value the DeFi sector at $100 billion. 

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 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.