August 20, 2020
Binance Smart Chain’s integrating Band Protocol has opened a new door for the DeFi industry. In an interview, the Band Protocol CEO, Soravis Srinawakoon, said that this would allow a new system of dApps to be built on the Binance Smart Chain, bringing both Binance and Band Protocol at the forefront of DeFi.
Binance Smart Chain integrates Band Protocol oracle
The DeFi industry, a small function in the broader crypto space just a year ago, has now resolved into an enormous market with a capitalization of over $15 billion. Such quick development, while eventually optimistic for the industry, does come with its inadequacies, with the biggest one being the instability of the oracles that power it.
Some major blockchain platforms have an increasing need for ascendable and consistent oracle solutions to funnel real-world data to their smart contracts. Binance Smart Chain, a smart contract blockchain platform running equal to Binance Chain, has joined Band Protocol to solve this issue.
The Sequoia-backed cross-chain data oracle has gotten enormous growth this year, noting a 348% growth for only the month of July. Band Protocol offers cross-chain data oracles constructed on the Cosmos Network, allowing creators to attach real-world data such as market prices to their smart contracts. In a press release, the company said that including Band Protocol’s oracles to Binance Smart Chain will allow developers to build groundbreaking regionalized applications in the Binance ecosystem.
“By introducing Band Protocol’s data oracles, Binance Smart Chain allows the global developers to focus on building DeFi products using on-chain and off-chain data retrieved by the oracle system, which will accelerate the growth of the DeFi industry and drive the sustainable development of the blockchain industry.” Changpeng Zhao, the founder, and CEO of Binance, said.
Maintainable expansion, according to Band Protocol’s co-founder and CEO Soravis Srinawakoon, is a critical factor that will enable DeFi to compete with more established, centralized finance (CeFi) platforms.
Binance Smart Chain enriching Smart Contract Functionality
Binance Smart Chain brings much-needed smart-contract functionality to the entire Binance ecosystem. Overwhelmed with restricted functionality, Binance Chain wasn’t developer-friendly and couldn’t sustain the formation of a DeFi organization on top of it. Binance’s Smart Chain, on the contrary, has a much more extensive capacity, he explained.
Srinawakoon answered when asked what distinguishes Band Protocol from its competitors, such as Chainlink, that it was the fact that Band isn’t based on Ethereum. Band Protocol was built on the Cosmos SDK and designed to alleviate the scalability issues of more common built-in blockchain or Ethereum-based oracles. This is what allows Band to be much cheaper and much more climbable than any layer one blockchain like Ethereum, which is infamous for its mobbing issues.
Aside from the suppleness, Band Protocol carries full regionalization to Binance Smart Chain—all of Band Protocol’s data benefactors are required to stick BAND tokens to perform work. With skin in the game and having their work openly confirmable on-chain, these data providers make Band one of the well-organized oracles on the market, Srinawakoon said.
Oracle Business Profitable into the Future
Long-term sustainability is one of the reasons why Band Protocol distinguishes itself from the competition. Srinawakoon said that most of it would be pretty short-lived due to excessive sponsored feeds or inadequately decentralized mechanisms. While this is common across the whole startup ecosystem, where companies need to sponsor their users to bootstrap their network heavily, Band doesn’t need to subsidize their users.
The protocol works by leveraging a self-regulating blockchain protected by delegated-proof-of-stake and constructed on the Cosmos-SDK. Band’s oracle network works by having validators who source and collected data for the smart agreements on the protocol.
To guarantee that all of these validators are accountable and incentivize their participation in the network, the protocol obliges them to stake BAND tokens. All BAND token holders, including the Band Foundation, can represent on behalf of validators to receive inflationary block prizes and a percentage of the collected data request fees. Just like ETH is used on the Ethereum network, BAND is used to pay the deal and data request fees on BandChain.
“This means the higher usage of Band oracles, the higher the revenue generated through the network, which ultimately rewards all ecosystem stakeholders who secure the oracle network for decentralized applications.”
With this kind of business model, Band Protocol is capable of attaining financial sustainability through oracle network usage and fees—creating its profitability independent of price rumor.
This integration will be a key milestone when it comes to driving recurring data requests. The data requests ultimately secure regionalized applications while creating a self-sustaining system and income model – both for Band Protocol and for Binance Smart Chain.
Srinawakoon seemed overwhelmingly positive when it came to the company’s plans, both the immediate and the far-off ones. He expected to see a significant rise in on-chain revenue by the end of this year from the many DeFi protocols, and dApps Band Protocol is currently in the process of integrating with. An increase in income will make Band Protocol’s data providers maintainable in the long run, even without any price conjecture around BAND token.
In line with its goal to hasten the development of the DeFi industry, the corporation has also announced the Band Protocol Ecosystem Fund’s unveiling. The fund will bring together projects that structure innovative decentralized applications using Band Protocol’s oracle and apply it for funding.