Binance partners with Band Protocol – Competition for Chainlink?

  • Binance has partnered with Band Protocol (BAND).
  • As part of this partnership, Binance provides the project with its live price data.

Binance has announced today a new partnership with Band Protocol (BAND). In mid-September, Binance promoted the project by selling BAND tokens as part of Binance Launchpad. Following the successful sale, Binance is now supporting the data Oracle platform by providing its live price data, which includes over 600 cryptocurrency pairs.

The Band Protocol project sees itself as a decentralized Oracle service, a third-party provider that offers external and decentralized data feeds for delivery to other blockchains. This service is necessary because blockchains cannot access external data.

This would contradict the idea of decentralized consensus if a blockchain would obtain data from a central data supplier. However, since decentralized applications depend on external data, oracles and providers, such as the Band Protocol, are required to collect and verify the data.

More than ever, smart contracts need access to high-quality information to support their logic and continue to improve the traditional Web 2.0 systems we know today. Changpeng Zhao, CEO of Binance, explains in this context in the official announcement:

Binance is committed to growing the blockchain ecosystem, including the ongoing development of Decentralized Finance, an important part of the ecosystem. Binance works with many blockchain projects, including Band Protocol, to bring freedom of money everywhere, and through the help of Binance data and Band Protocol’s solutions, we can help accelerate the growth of DeFi.

The CEO of Band Protocol, Soravis Srinawakoon, considers the integration as a stepping stone to promote the growth of the decentralized financial sector:

We are excited to work with Binance to make the promise of DeFi a reality through our OpenAPI. This enables anyone to create decentralised applications that can use Binance’s 600+ crypto data which is a great source of price discovery. What’s most exciting is that this will open doors for more finance and enterprise use cases to come as our platform can connect to any available API online.

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Competition for Chainlink (LINK)?

Exactly one month ago, Binance announced a partnership with Chainlink (LINK) that will also drive the expansion of the Decentralized Finance (DeFi) market through the use of Chainlink’s data Oracles. This raises the question of what makes the Band Protocol different or better than Chainlink.

Band Protocol CEO Soravis Srinawakoon explained in this regard that Chainlink is designed to be “very flexible”. This requires decentralized applications to specify which data provider they want to choose and which data they should receive from those providers.

The difference to the Band Protocol, says Srinawakoon, is that the distributed applications do not have to perform this process. The data is only provided by a “top staker” for a problem. This one is supposed to be trustworthy because the person raises funds as security to report the data.

In summary, Binance explains:

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That being said, decentralized oracle projects such as Band Protocol and Chainlink, will become the staple of interoperability between both smart contracts on-chain and to the real world.

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About Author

Jake Simmons has been a crypto enthusiast since 2016, and since hearing about Bitcoin and blockchain technology, he's been involved with the subject every day. Beyond cryptocurrencies, Jake studied computer science and worked for 2 years for a startup in the blockchain sector. At CNF he is responsible for technical issues. His goal is to make the world aware of cryptocurrencies in a simple and understandable way.

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