Summary

Band Protocol (BAND) is a data oracle platform that provides services for multiple projects across different blockchains. It uses a delegated proof-of-stake consensus mechanism, in which delegators, validators, and nodes participate by staking the native token BAND.

Requests for off-chain information are collected by the verifier, submitted to the chain, and then issued to the DApp that made the request.

Introduction

In ten years, blockchain and decentralized finance (DeFi) have changed the status quo of the global financial system. However, one of the major obstacles facing decentralized application (DApp) developers is the difficulty in accessing reliable, accurate real-world data. These data sources are external to the blockchain and must be integrated on-chain. In an effort to solve this problem, oracles such as Band Protocol have become the norm in the cryptocurrency ecosystem.

What is Band Protocol?

Band Protocol (BAND) is a cross-chain data oracle platform that aggregates real-world data and connects it to APIs and smart contracts. Founded in 2017, Band Protocol supports the exchange of information between DApp on-chain and off-chain data sources. Initially built on the Ethereum (ETH) blockchain, the protocol was moved to the Cosmos network in June 2020 in order to reduce gas fees and optimize costs.

As an oracle network, Band Protocol is the intermediary between the real world, off-chain data and the blockchain. Through its services, smart contracts can be executed based on actual off-chain events and information. Without reliable oracles, it is difficult for DApps to operate in a trustworthy, decentralized manner with transparent information sources.

How does Band Protocol work?

Band protocol uses the independent BandChain blockchain built with the Cosmos SDK. Developers can use BandChain to develop customized oracle scripts to provide off-chain real data for DApps and smart contracts. The custom oracle script includes: the data, the data source, the number of validators required to report the data, and a method for aggregating the data.

The process of executing the oracle script is as follows:

1.DApp requests data according to its customized oracle script.

2. This request is received by a random set of validators, who respond by pulling data from the specified data source.

3. According to the custom oracle script, data reports from different validators will be aggregated.

4. The final summary data is permanently stored in BandChain, and the oracle data proof is generated.

5. The verified oracle data will be transmitted to the requesting DApp or blockchain.

What consensus mechanism does Band Protocol use?

Band Protocol uses its native BAND token and Delegated Proof of Stake consensus mechanism to secure the oracle network. Currently, there are more than 90 professional and community node operators active in the BandChain blockchain. Each node operator must stake BAND tokens in the network in order to inhibit malicious behavior. As a reward for successfully processing data requests, validators share the query fees and block rewards.

As a BAND token holder, there are two ways to participate in the network: as a validator or as a delegator. Verifiers in BandChain also need to stake BAND tokens to ensure data credibility.

Token holders can pledge or delegate their tokens to validators to obtain staking rewards, and collected of data request fees. Additionally, BAND tokens can be used in the protocol’s governance mechanism.

What is the main goal of Band Protocol?

Band Protocol’s main highlight stems from the transition from Ethereum to Cosmos. The project was created with three major design goals:

1.Speed and scalability - with minimal Delayed processing of large data requests.

2.Cross-chain compatibility - Using a variety of blockchains, it can be used by most public Available blockchain services.

3.Data Flexibility - Supports different methods of retrieving and aggregating data in a common system.

How does Band Protocol achieve these goals?

The Cosmos network’s unique IBC (Inter-Blockchain Communication) protocol provides fast interoperability and autonomy. Through this feature, Band Protocol can serve and cooperate with projects built in different networks, including Ethereum, Fantom, Avalanche, and more.

Band Standard Dataset includes more than 80 data feedback collections from a growing number of data sources. These decentralized data feeds enable DApp developers to be creative, agile and flexible when developing and deploying in blockchain networks.

Summary

Band Protocol is a growing provider of oracle solutions focused on enabling Web3. It aims to provide fast, scalable, customizable and interoperable services, which is very attractive to developers who want to integrate into the Web3 ecosystem.