Crypto Band vs Chainlink Protocol – Which is Better?

What are the differences between crypto Band and Chainlink protocol? Every crypto blockchain project relies on reliable input and output of data for smart contracts and the Chainlink protocol is considered to be the first major and most widely used one to ensure that.

However, it is not the only one. There are hundreds of blockchain projects that also use Band protocol, the second-largest protocol used in the decentralized space, including crypto.

Both these protocols ensure tamperproof and high quality data input that guarantees the authenticity and safety while making crypto transactions using smart contracts.

Both these protocols check the data before passing them onto any smart contract.

This is a very important part because a large number of cryptocurrencies are managed by these smart contracts and it needs reliable data input to function properly.

Using Chainlink or Band Protocol can be quite profitable because you can earn LINK or BAND respectively as tokens for providing your services to the network.

These coins have value and you can swap them easily for regular fiat money or other cryptocurrencies.

You will need either of these two protocols to connect and aggregate real-world data to the smart contracts.

However, which is more useful today is a subject for debate and needs a clear understanding of the two including the differences between them.

This is one article that will help you in a great way in that matter. You will also find the ‘Which is better’ section of this article quite helpful in making your choice.

Therefore, read on without skipping any part of the content.

Crypto Band vs Chainlink Protocol – The Differences

Crypto Band vs Chainlink Protocol 

Both these protocols help to bridge blockchain networks and have achieved great success individually, though Chainlink got a head start since the version 1.0 of the Band protocol was not launched when it was founded in 2017 but was done later in September 2019.

In addition to the above, there are lots of other aspects that differentiate the Chainlink and Band protocols.

Knowing these differences will help you to make a proper comparative analysis between the two and find out how each stacks up against the other. Here they are.

Built on

One of the most significant differences between the two protocols is that Chainlink is built on the Ethereum blockchain.

On the other hand, the Band Protocol was originally built on the Ethereum blockchain but later on, it moved on to Cosmos which enables it to keep the cost of sending and receiving data significantly low.

Data Quality

The Band protocol initially supports only free APIs of low quality. This means that the paid APIs that are protected by a password cannot be used as desired.

This will need the data providers to change the entire business model in order to accept crypto payments on-chain. This limits the availability of data to the users drastically.

In contrast, the Chainlink protocol allows connecting to any live data source natively.

This includes free and open APIs, paid and authenticated APIs, as well as proprietary and private APIs and is made available through the modular external adapters.

These adapters can be produced and hosted by any user without needing any additional support from the data providers or the team behind the Chainlink protocol.

Dependence on Randomness

In the Band protocol, randomness is the core component that helps in choosing the nodes. However, it is not efficient enough to provide adequate support to the users and limits data accessibility severely.

Therefore, it affects the security of the blockchain network as such. This is because every node within the network may not have access to the same data and they may not even trust each other.

On the other hand, the Chainlink protocol is far better since it does not depend on randomness.

This enables the users to have much better control and quality mechanisms along with superior levels of flexibility while choosing the nodes and during data connection.

It is the Verifiable Randomness Function or VRF of Chainlink that creates a source of randomness on-chain which not only helps in crypto transactions but also NFT, dApps and blockchain gaming.

Acceptance Metrics

The Band protocol has minimal usage on the mainnet due to fewer acceptances of both Band v1 and Band v2.

Read Also:  11 Differences Between eToro and Kraken

It lacks the core features desired by the users and fails to create a notable effect on the network. It is also not able to secure large value that is locked in the DeFi economy.

In comparison, the Chainlink protocol can secure a large amount of value, adding up to tens of billions of dollars on mainnet for some of the major DeFi projects using its various live Price Reference Feeds.

Resource Competence and Network Blueprint

Since the Band protocol has a network design constructed on its own blockchain, the resource efficiency depends on how well the node performs its secondary function as validators and block producers.

This means that the protocol as such does not have much to do in terms of data delivery. It also increases the cost of operation as well as the sync time due to additional activities performed on the blockchain.

The Chainlink protocol, on the other hand, is, and never will be, a blockchain. Therefore, the nodes in this network mainly work on data delivery instead of validation or block production.

This keeps the nodes quite free and exceptionally lightweight allowing them to be used instantly without requiring any synchronization or processing.

Team

The team behind the Band protocol is not only small but also lacks experience in creating distributed systems.

With a low amount of original academic research, the team and the protocol fail to secure in-production real value. The original design has been abandoned by the team several times to create new ones.

On the other hand, the team behind the Chainlink protocol is reasonably big, comprising more than 40 members who have a lot of experience working in this field since 2014.

Some of the top advisors in their team include Tom Gonser, Ari Juels, Evan Cheng, Andrew Miller, Jake Brukhman, Hudson Jameson, and Brain Lio.

The protocol maintains the original design and has made a lot of development and expansions on it to provide a better user experience.

Throughput

The decentralization factor results in some differences in the throughput of the two protocols.

As for the Band protocol, all data queries and responses are typically processed through one specific blockchain called the BandChain.

This affects the maximum throughput, reducing it significantly just as the upper limitation of 100 nodes which is caused by the restricted scalability of the Tendermint BFT consensus.

On the other hand, in the Chainlink protocol, all data queries can run in parallel and natively on any available blockchain, layer 2 solution or Distributed Ledger Technology or DLT.

This does not need decentralizing the data queries and responses or funneling them through a single blockchain. This reduces the time taken to process them.

Also, there is no upper bound on the nodes while dealing with the threshold signatures that are coming and the aggregation upgrades off-chain.

Multiple Chain Support

The Band protocol is not effective in providing multiple chain support because it typically relies on the Cosmos IBC or Inter Blockchain Communication that is yet to be released.

To bridge data natively to other blockchain networks with such limitations, this protocol supports only those clients who need third parties not belonging to the protocol to deliver data.

These third parties typically have unknown penalties or incentives for their performance.

In comparison, the Chainlink protocol supports all of the major blockchain networks natively. This is done through the external initiators, modular external adapters, token bridging, and core contract deployments.

All the nodes participating in the network normally deliver their data timely and easily to all those requesting contracts on any given blockchain. This minimizes hops and time taken to deliver the data.

Economic Security

The Band Protocol rewards the validators with BAND but their stakes get slashed if they are inefficient block producers. The parameters that determine it are unresponsiveness, downtime, double signing and more.

However, being a malicious or poor oracle producing manipulated data, or causing collusion or oracle network attacks does not fetch any such penalties or stake slashing.

Therefore, it is quite evident that the validators within the blockchain will be more focused to be a good block producer instead of a good oracle to prevent their stakes from being slashed.

This, and the fact that retail staking on Band protocol does not have any real value makes it very weak and poses a significant threat to quality control, security for large contracts, and due diligence.

On the other hand, the Chainlink protocol has a staking mechanism that is designed to be much more generalized and robust. It focuses more on the security and integrity of the process of retail validator staking much unlike the Band protocol.

Read Also:  Crypto Hardware Wallet vs USB Stick

It has implemented binding Service Agreements. These agreements are actually smart contracts between the node operator and the requesting application.

Both these parties sign this Service Agreement cryptographically and are well aware of the terms and conditions of the services provided by the node operators in the network along with the penalties that may be charged if, in case, they do not uphold those particular terms.

Development Approach

The team behind the Chainlink protocol follow a philosophy of ‘measure twice and cut once’ to stay on top of the others in terms of innovations and offering the best user experience with cutting-edge technologies.

This immaculate approach and their well-thought-out designs mitigate attack vectors, no matter how complex they are, well ahead of time.

On the other hand, the approach or philosophy followed by the team behind the Band protocol is different from that of Chainlink. They typically follow a ‘move fast and break things’ philosophy.

It is more like throwing spaghetti on the wall and choosing the ones that stick. This approach hardly solves any problems in the blockchain industry as it may in some other industries because here absolute security is mandatory.

This is because in the blockchain industry real value is pretty vulnerable to manipulation and if it happens it is impossible to reverse it.

Some Other Differences

Your knowledge regarding Chainlink and Band protocol will be much more comprehensive if you know the seemingly minor differences between them as well.

The Band protocol, in comparison to the Chainlink protocol, is much faster, easier to use and a bit cheaper.

The Chainlink protocol is much more blockchain agnostic and therefore can scale much more in comparison to the Band Protocol.

The Chainlink protocol can offer indefinite horizontal scalability than the Band protocol since the nodes and data requests can run concurrently being entirely independent of one another.

The original Band v1 protocol failed to achieve adoption on mainnet and it also failed to grow the interest among people and was eventually abandoned in less than a year after its launch to adopt Band v2, referred to as BandChain. In comparison, the Chainlink protocol was never dumped but got modified to be better.

Which is Better – Crypto Band or Chainlink Protocol?

As you can see from the different aspects mentioned above, both these protocols differ from one another by so much that you may naturally think that the Chainlink protocol is much better than the Band protocol, and you are true.

First and foremost, the Chainlink protocol is more widely used than the Band protocol because the design of the latter has undergone several changes due to its low performance.

Typically, the Band v1 version of this protocol was dumped within a year for Band v2.

Typically, this Band v2 of Band protocol has two versions but both are named Guanyu. The first protocol is based on the Proof of Authority network.

It has 7 nodes belonging to selected private validators and Band Foundation. The second protocol is based on the Delegated Proof of Stake network.

Secondly, the Chainlink protocol is blockchain agnostic in every aspect because it is not a blockchain.

Instead, it is an abstraction layer that has the ability to run simultaneously on any given blockchain network.

Some of the major blockchain networks that are supported by the Chainlink platform are:

  • Bitcoin
  • Ethereum
  • Polkadot
  • NEAR
  • Ava
  • Kava
  • BSN
  • IRIS
  • Tezos
  • Harmony
  • Zilliqa
  • Klaytn
  • CasperLabs
  • Ontology
  • Kadena
  • Solana
  • HDAC
  • Hedera Hashgraph
  • Matic
  • ICON
  • Conflux

It also supports Binance Smart Chain, Substrate based chains, EVM based chains, and many more are integrated into this protocol as of now.

The good thing about this protocol is that though it was launched initially on the Ethereum blockchain, the system of its contracts is being rewritten.

This allows it to run on several different blockchain networks natively using the LINK token which is wrapped through a cross-chain bridge.

As a consequence of this change, each of the chains in the network will not only be related to the output but also to the security assumptions of that specific chain the network is running on.

Thirdly, you will have a knowledgeable and experienced team when you choose Chainlink instead of Band protocol.

The team members have excelled in different fields and have a sea of knowledge about the blockchain industry.

This diverse combination brings in the best opinions and designs that produce better results through their agile development practice.

Read Also:  7 Differences Between Crypto Holding and Trading

Fourthly, when you compare the two protocols you will see that the monolithic consensus used in the Band protocol does not really solve any problem in a blockchain-based activity.

This is because it standardizes the nodes and imposes upper limits to decentralization.

This model is also considered to be very rigid which is why it is not scalable enough to support password-protected APIs.

This is because the nodes fail to support approved data within their framework if the entire data industry is not redesigned from the ground up, which is nearly impossible and is extremely expensive.

It is, for this reason, the original design and development of the Band protocol has been discarded and new ones have been developed but the features in them are still theoretical, more or less entirely.

These are therefore unproven, very vague, and fail to protect real monetary value.

Therefore, it is good to go with the Chainlink protocol which is designed to solve the blockchain problems to a significant extent by separating them from the oracle problems. The other good reasons to go with are:

  • It is an extremely modular protocol
  • It supports a free-market framework
  • It supports an unlimited number of parallel networks
  • It has a much better consensus mechanism
  • It can maintain the security of individual networks
  • It provides the right to use high levels of customization
  • It has an efficient team that can handle a large and increasing ecosystem of DeFi schemes on miannet
  • It has the ability to secure large funds of the users over and above 4 billion dollars
  • It provides support on different aspects such as data types, node selection, security approaches, privacy, collateral staked, and more.

Most importantly, the Chainlink protocol supports multiple networks where several users are able to contribute to the same price feed which lowers the cost of operation of each user.

However, it is required that you do your own due diligence and examine the mechanism behind the protocol that best suits your needs before you make your final choice.

Remember, compatibility is very important especially when you are dealing with a large amount of funds in crypto.

Also, it is important to keep in mind that the smart contract economy and crypto industry will develop and scale to great heights in the near future and it will see more and more involvement of traditional institutions.

This will always need a better and safer mechanism because these traditional institutions usually have a higher risk appetite and demand for more quality control and flexibility.

A ‘good enough’ approach and mindset in such scenarios is not good enough because there is a higher chance of getting hacked and losing your money.

This is as good as using an unaudited smart contract that will expose the system to huge and unknown security risks that can bankrupt the users and cause the demise of a project completely.

At the same time, if you choose a non-generalized way out, it may serve a particular role in the short term but it will soon prove to be inefficient by the generalized standard, which is a common occurrence in the tech industries.

It is for all these reasons it is believed that the Chainlink protocol is a much better and more effective solution in comparison to the Band protocol when it comes to scalability, ensuring the security of the network, and preserving the value of the smart contracts.

To wrap up, it can be put simply that the Chainlink protocol will ensure accurate and high quality data along with honest block production.

Since it is a blockchain first and then an oracle mechanism, it is a highly flexible framework that ensures using it bi-directionally to deliver data to any given type of blockchain.

Conclusion

Truly, the Chainlink protocol is more popular than the Band protocol mainly when it comes to crypto blockchain. However, knowing the difference between them will allow you to know why it is so. Well, that was the basic idea of this article.