Crypto Academy / Season 3 / Week 7 - Homework Post for Crypto Professor @allbert.
Hi Steemians, this is my homework post for Professor @allbert on Blockchain Oracle.
I must confess that before now, I have not heard of Blockchain Oracle. However, it was well explained by the professor and I have learn a lot already.
History and Description. Does it have any token or cryptocurrency associated? Explain.
The Band Protocol Oracle is a decentralized platform that gathers real world data and communicate it to smart contracts on the blockchains like Ethereum and Cosmos. It represents a channel to bring external data securely into the one chain environment.
It makes use of public blockchain called BandChain, which enables entities to request information from APIs ( Application Programming Interface) and or from websites
Band protocol was launched in in the year 2019 as ERC-20 project on the Ethereum platform. But on June 2020, it transitioned to Cosmos platform with the release of the band protocol 2.0.
BandChain using Cosmos SDK is now it's new protocol
With Soravis Srinawakoon as a co-founder.
BAND Tokenomics:
on the coinmarketcap Band token is currently ranked #155, price at $8.61, market capitalization at $302,982,644. Volume is at $98,756,523 and circulating supply at 35,191,821.00 Band.
Also, 84 million bonded among 67 active validating nodes and the annual inflation rate is about 7 to 20% and it's adjusted to target around 66% of the total supply of BAND token stake. Also, 27% was sold in Binance launch pad, seed round and private sales.
Functionalities and real-life applications.
Band Protocol offers speed, scalability, cross chain, data flexibility and compatibility. It aims to offer quick and reliable data to varieties of public blockchains in 3 seconds, with this it is able to adequately support the data demands of requesting smart contracts.
There is this challenge of cross chain communication as a result of the individual blockchain protocol.
The band protocol (a Cosmo based project) is very much capable of communicating it's data results with other blockchains via Cosmo IBC (inter blockchain communication)
Though, band protocol also supports blockchains that are not supported by IBC through custom one way bridges.
Band protocol uses Tendermint Core Consensus Method, which is based on the Cosmos ecosystem.
This means that it is more optimized and it has improvement on the Practical Byzantine Fault Tolerance Algorithm (TBFT).
The benefit of this is that it is more faster than Proof of Work or Proof of Stake and data can be fed into these smart contracts much quickly and efficiently.
Band Protocol Use
Token holders can become validators. They can delegate their holdings to other validators to earn a portion of the collective fees and rewards.
Token holders can also participate on the chains governance.
Validators can set a fee for processing transactions which act as a reward for performing your duty and helping the network operate properly.
Pros and Cons.
Pros.
1. Decentralization:
Band Protocol blockchain (BandChain)
is run by a global pool of validators whose performance/actions can be monitored by anyone easily.
2. Flexibility:
There is really maximum freedom as to the data that can be requested, as well as computation that can be made on the data. It is super flexible, the set of data sources, how you aggregate the data, the oracle script is made with multiple different programming languages.
3. Scalability:
The average block time in this BandChain is just 3 seconds as compared to Ethereum's 10 to 15 seconds and Bitcoins 10 minutes.
BandChain runs data requests in the average of 6 seconds.
4. Low Cost:
The cost is also low because, they allow data requests to be charged on par request basis, rather than on the whole data set.
Cons:
It is not as popular and recognized as Chain link.
It has not made much progress with large DeFi apps.
It makes use of random selection for the data oracle nodes.
Future developments and new projects.
Let me start with some necessary recaps so that we can appreciate it's progress.
The Band Protocol was launched in 2019 based on the Ethereum blockchain. It quickly gained momentum in popularity in many cryptocurrency projects.
Before now, it was aimed at the creation of unbiased and transparent data platform that is governed by a decentralized protocol.
In the few months of 2019,the developers were more concerned on the security and scalability aspects of the platform. This created an acceptable standard for managing and processing information on the blockchain.
Band tokens were listed on Binance in September 2019, as a leader in it's space after the launch of the main network.
At the same year, Band Protocol management team started collaborating with top data providers in blockchain.
Example: Woodstock Fund, CoinGecko, DeSquare among many others.
Band Protocol 2.0
Having migrated to Cosmos platform in June 2020. Band Protocol launched it's long awaited Band 2.0.
In October 2020, Band Protocol launched it's fully decentralized platform of data oracle, of which enabled the validators to stake tokens and receive rewards.
At the end of the year 2020, the Band Protocol has integrated with more than 50 decentralized projects and also the first blockchain network to join OpenAPI Internet Initiative alongside top giants like; IBM, Google and Microsoft.
In February 2021, the management team announced that the BandChain would stop Proof of Authority operations and join Minnet along with the blockchain oracles. However, the shutdown took effect on the 2nd of March 2021.
Maimnet has over 72 reliable validators which provides enhanced security and decentralization.
2021 Vision and Roadmap
Band Protocol management team has already kick started the process to launch it's BandChain phase2, which is aimed around enterprise and institutional integration to unlock the entire information/data on the open internet for blockchain and also for decentralized applications to utilize.
Band Protocol whitepaper
Summery
One has to agree that the current hype around Band Protocol is reasonably justified.
The obvious need for a decentralized data oracle for DApps can not be overemphasized and the demand for it will likely be more in future.
However, the market is still very young and it is impossible to see how large it will become in future, so therefore, there is a great potential for BAND.