WTF in BAND Protocol
Decentralized Finance (DeFi) has become the new talk in the crypto space. Generally speaking, each project in this field is presently experiencing huge demand. This is especially true for various lending services, oracles, decentralized exchanges (DEX), and yield farming protocols.
In the recent past, some of the winners have reached more than 1000%. Apart from Aave (LEND), yearn. Finance (YFI), Orion (ORN), Band Protocol (BAND) is also included. And apart from being of utmost significance, Oracle protocol BAND can also gain from the strong demand for Chainlink and even position itself in this integral niche.
Because of this, this article focuses on giving you a deeper insight into Band Protocol and ultimately explain to you how you could earn passive income with BAND by staking and voting.
Not only will this make you understand what exactly is Band Protocol, but it will also show you how it functions, what makes it exciting, its team, funding, and how you may best use it for yourself. This post will also try as much as possible to avoid technical terms, and generally avoid going deep into technical details. In doing so, it will make it even easier for even a beginner to have a clear understanding of Band Protocol.
What Is the Band Protocol?
In general, this is a decentralized blockchain oracle provider. Typically, decentralized applications (or simply dApps) may leverage Band Protocol and get access to outside global information and apply it in their smart contracts via Band Protocol APIs. All the rage nowadays goes to smart contracts. However, this is also the case with blockchain oracle projects that have a significant role in the successful adoption of smart contracts when it comes to real-world projects.
Most DeFi protocols implement smart contracts when it comes to the automatic execution of transactions. Smart contracts can’t execute transactions without real-world data. This is where projects such as Band Protocol come in. Band Protocol usually collects outside world information and then applies it in smart contracts through APIs. The interesting part is that the Band Protocol’s blockchain oracles consist of a dual-use. And apart from transmitting data, Band Protocol’s blockchain oracles also have a vital role in regards to block validation.
The cross-chain functionalities are also another primary benefit that Band Protocol offers. Given that most DeFi protocols are currently also developed on other blockchains such as Solana, Algorand, and so on, the cross-chain oracle network of Band Protocol has a higher likelihood of finding a lot of takers. However, in its objective to support scores of DeFi protocols with external outside world information, it experiences strong competition when it comes to its larger rival Chainlink.
What Makes Band Protocol Exciting?
Some oracles are only tied to Ethereum. And this makes sense since it is the driving power behind most dApps. With that said, Band Protocol also partners with various blockchains. This offers a fundamental piece of infrastructure for decentralized applications built elsewhere.
As makers of decentralized applications opt for alternative blockchains because of reduced costs and quicker transactions, Band Protocol might be a fundamental tool that allows a broader decentralized applications ecosystem beyond Ethereum.
Apart from other partnerships, this network has become part of the OpenAPI Initiative together with other tech giants like Microsoft and Google to help establish a standard for APIs. This is what Band Protocol utilizes to acquire information from off-chain sources and then pass it over to blockchains.
The Band Protocol Token & Governance Model
The Band Protocol network usually depends on its native BAND token to respond to data requests, participate in consensus, and incentivize validators to create new blocks. BAND itself is quite different in that it comprises both a newly introduced Band Protocol mainnet form - as well as an Ethereum-based ERC-20 token iteration - which is the remnant of the earlier stages of the protocol as an Ethereum-centric platform. These two can actually be interchanged at a 1:1 ratio. However, only the newly introduced mainnet coin may be staked.
As a result, the top network participants consisting of the most BAND-staked tend to be the BandChain’s validators. For individuals who do not have enough staked to be a validator themselves, they can opt to be a delegator instead by delegating their stake to their preferable validator.
As a result, delegators receive block rewards in accordance with their delegated contribution of BAND proportionate to the overall amount of BAND that the validator has staked. More so, 2% of block rewards are directed to a community funding pool in order to promote community growth as well as ecosystem development.
Just like you would expect with Proof-of-Stake (PoS) systems, any misbehaving validator or those with too much downtime on the platform might get their stake slashed. When it comes to Band Protocol specifically, validators might also be slashed for their unresponsiveness to data requests.
BAND Protocol implements an inflationary supply model that helps incentivize users and stake their BAND coins on the platform instead of simply holding or trading them. The thought is that a particular person’s BAND holdings will also have to increase to avoid being devalued over a prolonged period against an inflationary supply. And the most effective method of doing this is by participating in network activities and ultimately earn rewards. The annual inflation rate at BAND fluctuates from 7%-20%, with routine adjustments in order to maintain 66% of the overall coin supply staked.
What’s more, BAND coins enable holders to actively participate in protocol governance. The voting power of a network participant is usually proportional to the actual BAND amount they have staked. Mostly, delegators are incentivized to participate in governance. In case they decide not to participate, then their voting power will be automatically allocated to the validators that they have delegated to. Similarly, in case a delegator decides to vote, then they will override the allocated votes of their respective validators, which offers a balanced power dynamic between delegators and validators.
Who Is On the Band Protocol Team?
CEO Soravis Srinawakoon with a Stanford’s Master’s degree in Computer Science is a member of the Band’s core development team. You can also find Srinawakoon on the Forbes’ 30 under-30 Top Young Entrepreneurs list. The team also consists of CTO Sorawit Suriyakran who was worked at Dropbox and Quora and also holds an MS from MIT. CPO Nattapatsiri is also part of the team - he is a proficient crypto game developer and has also previously worked at Turfmapp and Tripadvisor.
The Band Protocol is also supported by Sequoia Capital, which is one of the most well-recognized VC investors in Silicon Valley. It is also backed by the Spartan Group, as well as a few other active start-up investors. More so, the project has had one IEO and two ICOs, raising lots of millions in total in the process.
What Funds Band Protocol?
At this time of writing, Band Protocol has managed to raise a combined total of $7.9M in funding with 4+ rounds. Sep 17, 2019 marks when their recent funding was raised from a Seed round. The network is usually funded by 10 investors. ZBS CAPITAL and Binance Labs are the most recent investors.
Below is a breakdown of some of the funds that Band Protocol has received from investors over time. This is not the whole list though.
- From Binance Research (On September 2019)
- Receives support from Sequoia India (2019)
- Backed by Woodstock (On August 2020)
- Has support from Twitter (On September 2020). Binance backs Band, Serum (through 3commas Cap), and FTX (also known as SBF Alameda, or the new sushi controller).
- Receives investment on August 2020 from Alphain Ventures, SeaX, Spartan, and Dunamu & Partners.
- In October 2020, Harmony integrated Band Protocol and even assigned a percentage of the $7M Grants Program to the platform.
How to Participate in the Band Protocol Network
BAND is accessible from different cryptocurrency exchanges, even centralized ones such as Binance.US, Huobi, Binance, Coinbase, and even decentralized exchanges like Kyber Network and Uniswap.
Keep reading for an explanation of how you could buy BAND from an exchange, by using Binance.US. You can simply find BAND on the supported token’s exchange list and then you could decide whether to purchase or sell it. You could even exchange other cryptocurrencies that you might be holding on the platform.
First things first, you will input a buying amount of $20 from a bank account. This was equivalent to 2.49 BAND, considering the cost at the time of purchase and minus the $0.10 transaction fee.
By simply clicking confirm the purchase, the transaction will complete in a short time and show up with your wallet on the exchange. In case you need to stake BAND, you could consider transferring it to a wallet app like Atomic Wallet.
In short, it’s safe to say that the current hype surrounding Band Protocol is justifiable. As of now, the demand for decentralized data Oracles for dApps is vital and will continue to be. By simply staking the BAND tokens, you can generate a passive income through long-term investment in the project. Nonetheless, there are still some risks that shouldn’t be ignored.
1/ 👉 @Google has joined the cohort of leading companies and projects integrating $BAND oracles which are live on @GoogleCloud BigQuery.— Band Protocol (@BandProtocol) April 15, 2021
The integration and use-case of $BAND enables reliable price discovery mechanisms - crucial to all capital markets.https://t.co/nEqPqgSqQd