What is Band Protocol?
Updated: Sep 8, 2021
Band Protocol is a cross-chain oracle. It is mainly used in decentralized apps that utilize it to pull in data from web-based APIs.
Moreover, Band Protocol works well with different blockchain networks such as Ethereum, Cosmos, and more.
Originally, Band Protocol came into existence in October 2019 on the Ethereum blockchain network, but after some time, it moved to Cosmos and was relaunched in June 2020 with various extra features and a changed and simplified structure.
Furthermore, Band Protocol’s most common use case is for financial dApps (decentralised apps), and many well-known data providers such as Binance and CoinGecko are using Band as an oracle provider.
However, the system has other uses as well, like sports scores, weather, esports data, and certifiable random number generation - useful for lottery based selection processes such as initial exchange offerings.
How does Band Protocol work?
Band Protocol is a connective tissue between a dApp’s smart contract and real-world data usually situated outside of the blockchain network like other Oracle-based networks (such as Chainlink).
Many dApps depend on such information to operate and serve others, and they need accurate data to work as planned.
Band Protocol also has its own blockchain - BandChain.
The BandChain blockchain network is used to fill the gap between smart contract and off-chain data sources, and encrypted and a decentralized network of validators do this by creating blocks to verify those transactions.
What’s so unique about Band Protocol?
Some oracles work with Ethereum, but that’s not the case with Band Protocol, and this makes it special and attracts the majority of dApps.
However, Band Protocol is compatible with almost all popular blockchain networks, offering a simple infrastructure for dApps developers across the whole blockchain economy.
Taking into account that almost all dApps makers are searching for a viable alternative to Ethereum's blockchain to deliver faster transaction processing with reduced costs, Band Protocol can be an ideal tool to enable a comprehensive dApps ecosystem much better than Ethereum.
It's popularity as a multichain oracle is unrivaled, and Band Protocol has many partnerships with tech giants like Google and Microsoft to set a standard for APIs.
What can you do with Band Protocol?
As mentioned earlier that Band Protocol is a handy program for dApps that allows them access to real-world data away from the blockchain on which they are based.
For the average user, the incentive to own Band Protocol comes in the form of a BAND token.
BAND is utilized to pay for blockchain transactions, its governance, and a reward to validators that generate new blocks.
BAND uses an inflationary model on tokens and is designed to reduce their overall value but gradually. This encourages and motivates the users to participate in network staking and allows them to earn more tokens via staking rewards.
Does Utopia Digital Asset Management's DeFi Infrastructure fund invest in Band Protocol's BAND token?
As the premier cryptocurrecny fund focussed on DeFi and the surrounding infrastructure, it would be remiss of us not to invest in BAND token.
As DeFi protocols develop on blockchains outside of Ethereum, we see the use case for Band Protocol growing exponentially. As such, we invested 5% of the DeFI infrastructure Fund strategy into BAND token when we launched on ICONOMI on 28th July 2021.