Hello, professor @allbert, I am humbled to be one of your students in the lecture about Blockchain Oracle and I present to you my homework post for the task that you provided to your students in the Steemit Crypto Academy.

Introduction

Smart contract applications such as DeFi applications need data outside of the blockchain, for example, price feeds to know the conduct of the smart contract code. Take decentralized protocols, for example, they need access to accurate exchange rates of collateral assets to determine the amount of tokens users can borrow and make sure the loans stay solvent. Without any access to external data, the applications wouldn’t be able to exist. In the case of stable coins protocols, the exchange rates of the collateral assets are necessary for issuing new stable coins in maintaining its peg.

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This is where oracles come in to connect smart contracts to external data sources allowing them to function and operate reliably in a trustless manner. The blockchain oracle’s role is to ensure the role of the blockchain oracle is ensuring that information is accurate and provided as it is needed in a timely manner.

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History and Description of Band Protocol.

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Band protocol is a cross-chain decentralized oracle that provides smart contracts the tools to connect and aggregate any external source or API data without any central points of failure. BandChain, an independent blockchain formed on the cosmos SDK is used by Band Protocol particularly for oracle arithmetic such as pulling data from multiple high-quality sources, aggregating them to filter and packaging them into a format that is very easy to use and verify efficiently across any other blockchain including ethereum for decentralized applications to utilize.

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The Band Protocol was founded in 2017 and the team has some impressive credentials right from the CEO and Co-founder Soravis Srinawakoon who has a Masters degree in Computer Science from Stanford University worked for Boston Consulting Group and is in Forbes’ 30 under 30, the CTO, and Co-founder Sorawit Suriyakarn has a Masters’ in Engineering from Massachusetts Institute of Technology and has worked from Quora and Dropbox, the CPO and Co-founder Paul Nattapatsiri has worked at Tripadvisor and he is a creator of crypto games with 800,000+ users since 2013 as referenced from their Linkedin profiles here.

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The Band protocol is backed by impressive names like Sequoia Capital which is one of the heavy investors in Silicon Valley, they also have investors from Binance and a number of other approved startup investors, for example, Spartan Group, Woodstock, Aphain Venture, among others which show new investors reliance from institutional capital.

The Band Token.

The Band Protocol has a native token in the name of BAND currently at $8.22 each with a total circulation supply of 35,191,821 tokens, a marketcap of $289,062,895, and currently ranked number 160 on coinmarketcap.

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As the smart contract industry continues to grow, decentralized finance itself has grown to be a 4 Billion dollar industry and it is critically important that oracles powering blockchain applications are fully decentralized. The oracle network is appended through delegated proof of stake using the Band Native Token. The Band Token is staked by the validators who aggregate and fount which is a requirement to guarantee full liability and economically inspire them to confirm the security of the decentralized oracle network.

Band Token holders can stake or stake for the chosen validators to profit increased income as well as a wedge of the data request fees accumulated. Anyone can engage and contribute to the BandChain decentralized oracle network.

Likewise in the ethereum network, Band Token is utilized to reimburse transaction fees on BandChain which means the more they use the Band oracle, the higher the fees produced through the network which in the end recompense Band Token holders and validators who perform their job of appending the oracle network for decentralized application to use.

Band Token is also used for the protocol governance process so that token holders have a direct say in any upgrade as BandChain decentralized oracles continue to secure the multi-Billions of dollars locked up in smart contracts across all blockchain networks and industries.

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Functionalities and real-life applications.

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Band protocol dispenses substantial refinement in both costs and response time which accredit decentralized applications that count on high-frequency data to materialize. This is because BandChain is created particularly for oracle arithmetic with the propensity to circumvent inflated transaction fees, crowded networks, and continue giving real-time data when it is needed.

With BandChain, developers can come up with custom oracle scripts that attach their smart contracts to any external data source. The custom oracle scripts specify the data they need, all the data sources, the number of validators required to report such data, and how to aggregate this data into the final result.

When a decentralized application creates a data request to BandChain, they create a small fee to the network. BandChain validators are then chosen randomly for the algorithm to acknowledge the request and pull data from the sources designated in the oracle script. The validation reports are then aggregated into a single result that is permanently stored into the BandChain blockchain step and once stored, this oracle data can be relayed to any other blockchain with proof signed by validators to verify the integrity of the oracle data. Requests on the oracle network take less than 6 seconds to finalize a transaction.

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Pros and Cons.

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Pros.

Decentralization.

BandChain blockchain is operated by a worldwide pool of validators whose accomplishments and activities can be easily monitored by anyone around the world. These validators fetch the results of the request that was made which can be taken from different multi-data sources.

Flexibility.

There is maximum freedom as to the data that can be requested as well as the computations that can be made on that data, that is to say, it is super flexible right from the set of data sources, how you aggregate the data, oracle script that is made with multi different programming languages and can be easily integrated.

Scalability.

The average block time in the BandChain is just 3 to 6 seconds as compared to Ethereum’s 10 to 15 and Bitcoin’s 10 minutes thus making the BanChain very fast in carrying out transactions.

Low cost.

The transaction cost in the blockchain is very low because they allow data requests to be charged on a per request basis rather than on the whole data set.

Cons.

The validators are mostly motivated by the token, that is to say, the oracle network can’t be of success without its native token Band.

The oracle network is growing every day and gaining a number of partners yet the validators are not efficient enough and thus will lead to the inefficiency of the oracle network.

Users’ data can be greatly compromised in case of any system hack.

Band Protocol breaches the values of decentralization since there is the involvement of a third party in the network.

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Future developments and new projects.

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Band Protocol does need to mature further but it seems super promising, the fact that it has a solid project with decent fundamentals and I am confident that it will definitely play a substantial role in the oracle space.

Google is making its name known in the crypto markets partnering with Oracle project Band Protocol, that is to say, it integrates Band Protocol for real-time crypto price data. This is really big news that Google cloud has decided to go with Band protocol which is on the COSMOS network as opposed to chainlink on the Ethereum network.

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Band protocol will also integrate with CronosChain which will extend into creating a custom oracle script for Cronos price feeds. It will prepare the integration to ease access to over 230+ price oracles for Cronos developers.

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Band Protocol has patterned with the DeFi platform Fantom, that is to say, it has deployed a validator node on the opera Mainnet which has by far rallied 1.46 Million Fantom tokens in the delegation from the Fantom community. This will bring new products in the Fantom ecosystem with verifiable random functions in the future.

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In conclusion.

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There is no doubt that there is a pressing need for a secure, decentralized, and most importantly interruptible oracle solution. There are a number of blockchains that could benefit from the DeFi revolution just as long as they are able to secure reliable off-chain data. Not only does the underlying COSMOS SDK give the Band Protocol the ability to supply data to numerous blockchains but also gives the ability to easily scale. Therefore I would like to thank professor @allbert for search an awesome class which has greatly improved my understanding of blockchain oracle.