Decentralized finance (DeFi) Oracle Band Protocol is enhancing its interoperability within the Cosmos ecosystem.
As of July 22, 2021, the Band Oracle has reportedly been integrated into the Cosmos ecosystem, via Starport, in order to further “the realization of the Internet of Blockchains.”
As mentioned in a blog post, the versatility of Cosmos is increasing as blockchains within the ecosystem are “even more connected and interoperable than ever before.”
With this Band Protocol integration in Starport, the Cosmos blockchain development tool, newly created chains can “exchange feeds of varying types of data by using an oracle and the Cosmos interoperability standard: Inter-Blockchain Communication protocol (IBC).”
As explained in the announcement, any software developer who creates a chain using Starport may seamlessly add a data-query function from an Oracle. This is a prime example of the “adaptability and ever-expanding potential” of the IBC protocol.
The announcement also mentioned that this data-rich feature is “a great representation of the advantage that comes with building with Cosmos’ open-sourced technology.”
As noted in the update, one of the reasons that blockchain or DLT platforms have been able to gain such prominence in our world today is “because there is no technology that tracks what is happening within its network better than a blockchain.”
But if there is a service on-chain that requires access to data from outside the network, “a reliable method to verify that real-world data is required” and this data verification requirement is “where an oracle comes into play.”
As explained in the blog post:
“Oracles are middleware that feed data into blockchains. A decentralized oracle like Band Protocol works in the same way as a decentralized blockchain by distributing trust among many network participants. By using many different data sources and implementing an oracle system that isn’t controlled by a single entity, a decentralized oracle provides an increased level of security of information.”
After data has been verified by an Oracle’s “decentralized network of participants,” it can then be “used within the blockchain.”
The Cosmos blog post shared an example:
“Let’s say you wanted to use a service on a blockchain to make a purchase with cryptocurrency and you needed to access the price of a product as well as the exchange rate of a specific coin. In this case, you would use an oracle to take that real-world information, verify it, and use it to process the transaction within the blockchain application.”
At present, Band Protocol offers secure and decentralized data that are “crucial to the functions of various DeFi applications across all sectors such as lending and borrowing, synthetic assets, insurance, stablecoins, Decentralized exchanges, NFTs, etc.”
The announcement further noted Band Protocol is a Decentralized Cross-Chain Data Oracle that “aggregates and connects real-world data and APIs to smart contracts.” It is a “time-tested and secure oracle provider” with more than 7.4 million requests and partners including Terra, Mirror, Venus, C.R.E.A.M. Finance, Injective, and Alpha Finance.
While many chains have now been integrated with the Band Protocol Oracle, Band Protocol Oracle is reportedly the first to be adopted “as a standard into Starport, the most convenient way to build a blockchain on Cosmos.” This means that decentralized application (DApp) developers may conveniently access decentralized and secure data from Band Protocol “as they develop on Cosmos.” Until now, IBC was mainly used for making asset transfers.
As noted in the update:
“With the recent integration of the Band module onto the Starport framework, and Band Protocol being on the verge of enabling their IBC-connection to Cosmos, IBC is not only providing a new capability for existing chains, but is also providing incredible accessibility to new projects in development within the Cosmos space.”
As explained in the announcement, being able to source decentralized data is “key to building secure and widely-used blockchain applications.” With access to this data, blockchains in the network can now “utilize information to fit their own needs and innovate towards new capabilities.”
The update also noted that with IBC as a native protocol for apps developed with the Cosmos SDK, and Band Protocol’s flexible oracle design built into Starport, new chain developers “have access to all sorts of decentralized data, such as token information, real-world events, sports, weather, random number generation, and more.”
The IBC protocol is also “available to other chains outside of the Cosmos ecosystem to expand the outreach of the blockchain information exchange.”
As noted in the announcement:
“This growth-enabling integration of the Band Protocol Oracle opens up a wide range of possibilities, further developing use cases such as lending, staking, and NFT development. This will also allow Starport developers to connect their applications with traditional web APIs.”