Band Protocol, the second-biggest blockchain data provider after market leader Chainlink, has gone live with its next version, dubbed “BandChain 2.”
So-called blockchain oracles, such as Band Protocol, Chainlink and others, pipe external information into digital smart contracts, to power areas like decentralized finance (DeFi), the vast majority of which is attached to the Ethereum public ledger.
Band Protocol, back in 2017, chose to build using Cosmos blockchain software, a system focused on helping chains talk to each other and exchange assets seamlessly, looking beyond DeFi’s home on Ethereum.
As the current version of Ethereum has gradually become rather crowded and expensive to complete transactions on, faster and more nimble options have sprung up, supporting Band Protocol CEO Soravis Srinawakoon’s interoperability thesis.
“We wanted to be cross-chain compatible from the early days, in the belief that there will be a bunch of blockchains with different designs and trade-offs,” Srinawakoon said in an interview, adding:
“You can see this play out with big players like Solana, Cosmos, Polkadot, BSC [Binance Smart Chain] and Terra. So we positioned ourselves to address the needs of these faster, cheaper and more scalable blockchains.”
A key part of Band Protocol’s move to phase two is to allow data providers to run nodes themselves, rather than having intermediaries acquire the data. It’s a shift that will make the system more transparent and decentralized, an approach chosen by some other data services such as API3, another data oracle provider.
Srinawakoon says this should eventually bring more traditional players onto the network, providing what he called “premium APIs,” with which these firms can monetize that data directly. While Band Protocol is at least an order of magnitude smaller than Chainlink at the moment, the number two network has made great strides when it comes to soliciting data partners, being the first blockchain project to join the OpenAPI Initiative.
As a result, Band Protocol has formed working relationships with the likes of Google, Microsoft and financial data giant Bloomberg, although Srinawakoon pointed out these potential partnerships are still “a work in progress.”
In terms of getting traditional players to adopt his vision of a more transparent and decentralized option, Srinawakoon said the main obstacle is, How do you get these firms to actually use your solution?
“That’s a big hurdle,” he said. “Because it’s actually quite difficult to convince a firm like Bloomberg to run your infrastructure. So we try to make sure it’s as seamless as possible and these players can use existing infrastructure and make it easier to onboard them.”