Band Protocol is a cross-chain compatible decentralized data oracle that plans to enable smart contracts to connect and aggregate off-chain data and APIs without relying on a single point of failure. On April 20th, CEO Soravis Srinawakoon and CTO Sorawit Suriyakarn of Band Protocol joined us to answer our Band Protocol questions.
Band is an open protocol that facilitates the governance of data used in decentralized blockchain systems. While many decentralized applications rely on centralized data providers, Band Protocol plans to leverage existing internet data as a secure and scalable decentralized oracle. Band Protocol is backed by a large network of stakeholders including Sequoia Capital as well as Binance.
The oracle problem stems from the fact that blockchains mostly work as deterministic state machines. The current state of a blockchain and an input, like a transaction, produces the next state. This leaves no room for real world data, like the current price of bitcoin, to enter the blockchain ecosystem in a trustless way.
Band Protocol plans to solve this problem by building a network of data providers who have “skin in the game’ through a proof of stake consensus. This will allow developers and end users to have a higher degree of confidence in the quality of data entering the blockchain ecosystem.
Band Protocol was originally built on Ethereum, but the team is currently working on a new protocol called BandChain, which is being built on Tendermint and Cosmos SDK. The decision was made because the team sees Cosmos as a scaling solution, while giving them more flexibility. Current ERC-20 BAND tokens will be migrated to BandChain.
BandChain plans to launch with 100 validators in their active set. There is no requirement to be in the active set as long as you are in the top 100 by total amount staked. Initially, validators will not be required to provide oracle data, but that will eventually change. Validators who fail to provide data for a significant amount of time will be jailed.
The risks/rewards will be similar to Cosmos at launch (i.e. 21 day unbonding period, 5% double-sign slash, 0.01% slash for ~18 hours of downtime, 7% inflationary rewards).
There will be no slashing for providing “bad quality” data since this is subjective and difficult to determine. That said, Band is researching ways to disincentivize malicious behavior through the use of reputation scores and community-wide voting through Cosmos SDK’s governance module. Regardless, end users will be able to protect themselves through the creation of data filters and having the ability to freely aggregate data.
“That said though, as an end user on BandChain, you can freely define how your data is aggregated from raw data points from the data providers. For instance, you can choose to filter out outliers or use medians to compute the final result. Thus, you are safe from non-majority malicious data providers trying to tamper with the data.”
Sorawit Suriyakarn CTO, Band Protocol
Because of its blockchain design, the data BandChain will be able to provide is quite flexible. Their focus for phase one will be in providing public web data that is necessary for DeFi applications, prediction markets, insurance markets, as well as sports data for gambling applications. Their future focus will be on providing permissioned web data.
Outside of being used for staking, the BAND token will be used to pay for data access. Once IBC is enabled, any tokens within the Cosmos ecosystem can be used for payments on BandChain. Band Protocol is also planning on releasing a BAND backed stablecoin on BandChain for payments. Band protocol also sees DeFi as a use case for the stablecoin, since it is similar, at a high level, to Dai.
Band Protocol has been busy integrating its oracle with over 15+ projects including well known DeFi networks like Kava. In addition, Band Protocol has been steadily growing their validator community on its path to mainnet launch. Its testnet has been successful citing no critical vulnerabilities or downtime. We can expect mainnet launch dates to be released some time this month.
Thank you Soravis and Sorawit for spending an hour with us!
Thank you Gavin for co-hosting and thanks to our Staking Hub community for all of your wonderful questions.
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