Decentralized projects are the ones that I believe stand to make significant gains and provide very interesting passive income opportunities over the coming years. All Decentralized Finance applications need price feeds on token swap and loan collateralization process. They all need Oracles and this is what makes them so precious.
What Are Oracles?
Like Chainlink (LINK), Band Protocol, as well as Tellor, are decentralized Oracles. Oracles are bringing real-world information to smart contracts. They are acting as an intermediary between blockchain smart contracts and traditional non-blockchain applications such as website APIs, databases, and payment processing systems. Information can also be returned from the smart contract.
Blockchains don’t have access to information that is not on-chain. When it comes to Decentralized Finance this typically means price data that is used by smart contracts to control key aspects of their lending protocols. All Decentralized Finance applications need Oracles and this is exactly what makes them so precious.
So in fact, there are several notable projects that are working on connecting off-chain data and systems with the decentralized world. In this post, I focus on the most promising new projects Tellor and Band Protocol.
Tellor
Tellor deals with decentralized oracles focused on price feeds. It provides decentralized finance applications with secure and reliable access to trusted data. The product is already live and the smart contracts are on the ethereum blockchain since August 2019.
Tellor uses the Proof of Work mechanism. Data requests are made to Tellor together with an amount of tokens. This happens every ten minutes. Then Tellor chooses the ones with the most funds and sends them to the miner.
Tellor has been invested in by some big names like Binance Finance Labs, Maker DAO, and Consensus.
Tellor wants to create a system that is truly decentralized, censorship-resistant, transparent, and easy in use.
Simple: Quick and easy to implement into your smart contracts.
Decentralized: For developers who want a trustless solution and to not rely on third-party oracle solutions.
Secure: We use a Staked Proof of Work protocol to validate our data.
Tributes (TRB) is an ERC20 token built on the Ethereum Blockchain. TRB is the native token that powers the Tellor Oracle Network.TRB incentivizes miners to provide data, keeps the oracles secure, and allows Dapps to request on-chain data.
TRB Tokens are mined with every successful Tellor data point and the company takes a 10% dev share to support the development of the ecosystem. Miners must stake 1000 Tributes in order to participate.
TRB`s price today is $6.98 and it is currently located on market cap rank #276. It has a circulating supply of 1.3 Million coins and a max supply of 1.36 Million coins.
HotBit is the current most active market trading TRB. It is also traded on several other exchanges like Uniswap.
Since TRB is an ERC20 token, it is supported by all cryptocurrency wallets that support ERC20 tokens. I recommend Atomic Wallet to store your TRB.
Band Protocol
Band Protocol is a cross-chain data oracle platform. Like Tellor, Band Protocol provides decentralized finance applications with secure and reliable access to trusted data. Band Protocol does it by connecting smart contracts with trusted off-chain data and ensuring its integrity using a delegated proof of stake and token economic incentives.
Band Protocol also claims to be fast, decentralized, scalable, and easy to implement. Also, Band Protocol has been invested in by some big names like Sequoia Capital, Dumamu & Partners, and Binance Labs. In March 2020, KAVA announced that it would use Band Protocol’s decentralized oracle to support the cross-chain usage.
The Band Protocol Token (BAND) is an ERC20 token built on the Ethereum Blockchain. It will migrate to the BandChain blockchain as its own native cryptocurrency soon.
BAND is the native token of Band Protocol. BAND is also used for governance and staking.
Band Protocol`s price today is $1.12. It is currently located on market cap rank #167. It has a circulating supply of 20 Million coins and a max supply of 100 Million coins. Binance is the current most active market trading BAND.
Since BAND is an ERC20 token right now, it is supported by all cryptocurrency wallets that support ERC20 tokens. I recommend using your Atomic Wallet to store and stake your BAND easily.
If you like to know more about BAND, I recommend reading the post "Top Things You Should Know About Band Protocol (BAND)" by @MuyAsk.
Final Thoughts
I am still a huge fan of Chainlink and I have it also in my highly diversified portfolio but Tellor and Band Protocol could make much bigger gains because of their current small market caps. Both Oracles come at an appropriate time for the market, just as decentralized finance applications are gaining more traction.
If you like Chainlink (LINK) then Tellor (TRB) and Band Protocol (BAND) are two exciting projects for you to look into. Both projects have only small differences like the types of models to secure their protocol.
But if you think that Chainlink is all we need and it will do anything in oracles then ask yourself this: Why have so many big names all invested in Tellor and Band Protocol if Chainlink is the end-all and be-all of all oracle services?
Nothing in my post is sponsored, it really reflects my own opinion. I am really excited about the potential of both projects, Tellor and Band Protocol since I have started my research on these projects.
Nevertheless, please keep in mind that my intention in this post is not to replace your own research. Always #DYOR. 👌
I hope I could provide you with some interesting and useful information about decentralized oracles.
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