Band Protocol is about to give Chainlink a run for its money on Ethereum.
Band is one of Chianlink’s main competitors in the oracle space that is based on Cosmos technology. In a recent Cointelegraph interview, Soravis Srinawakoon, the CEO of Band Protocol, said:
“If you look at Chainlink, one data request right now can take almost $450 because someone needs to submit the request data to ask for the data. Let’s say 20 data providers need to receive that, respond to that with 20 transactions, and then the aggregation contract to do all the computation before returning the final result, all of these require a lot of gas.”
Srinawakoon also provided a link to Chainlink’s Ethereum (ETH) contract to support his claim. If we examine a more recent interaction with the same contract, the cost appears to be even higher — $563.74. We asked Chainlink to respond to these claims, their spokesperson told Cointelegraph:
The links do not reference a request from a user that is trying to access a feed. These are the overall costs for multiple oracle nodes making a feed update that is shared by many users, during an extremely high gas fee period that is unique and atypical.
They also added that this demonstrates that Chainlink is able to operate successfully “even in times of high gas costs and high gas fee spikes” and “we are currently completing <...> implementation of Threshold signatures. This solution reduces certain costs for securely running an oracle network by as much as 1500X.”
Srinawakoon believes that low fees is only one of the advantages that Band holds over its main competitor, additionally noting greater interoperability (he mentioned that Band oracles are already available on Waves, TRON (TRX) and ICON) and decentralization.
Srinawakoon said that decentralized incentives are built into Band at the protocol layer. Data providers have to stake Band tokens (they are currently staking $500-600 million worth of tokens according to him), which also implies that if they misbehave, they could be punished financially. This is similar to the way oracles built by EMURGO and ERGO for the Cardano ecosystem function.
Srinawakoon admitted that up until now, Chainlink has been dominating the Ethereruem ecosystem, but said that this is about to change:
“And if you look at Band before, we actually were quite weak in the Ethereum ecosystem because Chainlink has been dominating in that space. <...> I think this is going to mark the beginning of us really going into the Ethereum ecosystem, and we’ve been working with a lot of these major DeFi
on top of Ethereum as well.”
A Chainlink spokesperson told Cointelegraph that there are profound reasons for why Band has not enjoyed a similar level of success on the Ethereum network:
In comparison to Band, it is also important to note that their instance on Ethereum had up to 5 days without a price data update, meaning that the data was dangerously out of sync with reality. This is one of the multiple reasons why while they were on Ethereum, there wasn’t a single live user that was willing to tie their security to Band’s oracles on the Ethereum network.
The DeFi space has grown by leaps and bounds this year, pushing the price of Ether and creating demand for oracalized data providers like Chainlink and Band. Yet, as Ethereum gas prices rise, the competition between oracle providers is heating up as well.
