As altcoin season presses on, it’s starting to look quite a bit like 2017 once more.
Of course, issues are a lot completely different now: the ‘wild west’ days of crypto are (virtually) certifiably over. Nowadays, there are extra rules, higher neighborhood requirements, and an investing public that is a lot savvier and fewer keen to throw cash at initiatives which have merely tacked ‘blockchain’ onto the finish of their names.
The Most Diverse Audience to Date at FMLS 2020 – Where Finance Meets Innovation
Still, although, the sorts of beneficial properties which have taken place in the costs of a lot of altcoins over the previous a number of weeks and months haven’t been seen on such a widespread scale since the golden days of practically three years in the past.
For weeks, a lot of the token worth hype appeared to be centered round LINK, the native asset of the Chainlink cross-chain oracle community.
More not too long ago, nonetheless, the public eye appears to have turned to a different cross-chain oracle community token: BAND, of the aptly named Band Protocol.
BAND’s market cap has elevated greater than 7000% to this point this yr
Indeed, the BAND token worth sat quietly between roughly $0.20 and $1.20 from September of 2019 till July of 2020, when issues actually began to take off: by July 31st, BAND was value roughly $3.99. On August 10th, the worth peaked round $15.70; at press time, it had fallen to $13.70.
Even with the latest correction, nonetheless, BAND’s returns are vital: since the starting of the yr, BAND rose from $0.22 to $13.43, a rise of over 6100%. BAND’s enhance from the month of July till now, from $1.10 to $13.71, represents a rise of over 1100%.
BAND’s relative worth progress to this point this yr even surpassed LINK’s, which has seen a 659.551% enhance since January 1st.
The market cap of each of those initiatives has risen considerably since the starting of this yr, albeit on fairly a unique scale.
Chainlink’s $623 million market cap at the starting of the yr grew to $4.7 billion at press time, a rise of over 7,400 p.c; the Band Protocol’s market cap began off the yr at $3.5 million, and had grown to $275 million, a rise of roughly 7760%, by press time.
In different phrases, the Band Protocol’s market cap is solely a fraction of the measurement of its competitor’s; nonetheless, comparatively talking, the challenge appears to be rising at a quicker fee than Chainlink.
This massive valuation hole can partially be defined by the indisputable fact that Chainlink is absolutely operational with a big future integration pipeline.
But is BAND undervalued, overvalued, or pretty priced? pic.twitter.com/ZTKuRfCNGY
— Messari (@MessariCrypto) August 10, 2020
The Band Protocol’s operate and objective
Indeed, final week, Chainlink rose over 300% over a matter of a number of days.
This most up-to-date push seems to have taken place as the results of a collection of bulletins concerning new listings and integrations throughout a number of necessary platforms. For instance, on August 9, BAND was listed on Houbi. Several days previous to that, BAND had been listed on Coinbase.
Additionally, final week, the Band Protocol introduced that it had entered right into a partnership with Ubik Capital, which has been described as the ICON community’s “fourth-largest public representative.”
Blockchain analytics agency Messari famous on Twitter that “BAND has recently taken a page straight out of the LINK handbook with a slew of partnership and integration announcements, including a Coinbase Pro listing.”
Up over 32x on the yr, its relative valuation play and anchor to LINK has labored to this point. pic.twitter.com/oC3cGaHRu0
— Messari (@MessariCrypto) August 10, 2020
7 Pharma Stocks from EuropeFX You Need to Know for a Covid-19 VaccineGo to article >>
But what does the Band Protocol truly do?
According to its web site, the Band Protocol “aggregates and connects real-world data and APIs to smart contracts”: in different phrases, it acts as some extent of entry to dependable knowledge sources that exists outdoors of the blockchain world. The Band Protocol is decentralized, so there aren’t any central factors of failure.
So, for instance, the Band Protocol might be used to offer knowledge (together with sports activities outcomes, lottery numbers, and so on) to a betting dApp that was constructed on the Ethereum blockchain; it is also used to offer token worth knowledge to a decentralized buying and selling dApp.
The challenge has been backed by Binance, Sequoia Capital, and lots of others, and the community is at present being actively developed-with and used.
The BAND token performs a number of roles on the Band Protocol: first, the token is the native token of Band Protocol’s public blockchain, the ‘BandChain’. The token is used to stake collateral for every dataSet token, which helps to safe every dataSet constructed on the Band Protocol. BAND is additionally used for voting in on-chain governance.
Are DeFi tokens overvalued at the second?
As many DeFi-based tokens have continued to extend in worth over the previous a number of weeks and months, it has been argued that a few of these tokens, together with BAND, are considerably overvalued.
In different phrases, some analysts imagine that a few of these DeFi tokens are growing in worth primarily based on hypothesis from exterior traders, moderately than primarily based on elevated inside utilization from token holders that truly participate in the ecosystem.
Indeed, Deniz Omer, head of ecosystem progress at Kyber Network, instructed Finance Magnates in a latest interview that at present, “the ratio of speculative value is increasing compared to the fundamental value” in the DeFi ecosystem.
“It’s not that these products are not amazing–they are super amazing…but when I see a several-thousand-dollar valuation for some kind of governance token, I’m not sure the capture mechanism allows for so much value to go up.”
In different phrases, “I think it’s short-term, basically,” Deniz continued. “…There should be a rebalancing and a correction at some point, especially if more people join in.”
Therefore, it may be argued that in the quick time period, BAND is the newest instance of a token in the DeFi area taking off “to the moon” primarily based on traders that exist outdoors of a challenge’s community; in different phrases, token holders who don’t truly use the protocols that their tokens belong to in a sensible manner.
Still, although, the basic worth of the platform appears to be rising with every extra partnership, integration, and itemizing it beneficial properties.
Blockchain oracle knowledge suppliers are in the highlight in 2020
Some of BAND’s worth rise, in addition to LINK’s, may even have been fueled by an elevated quantity of consideration on the blockchain oracle area as an entire.
Indeed, Messari famous in a tweet that “In addition to BAND’s momentum, oracle tokens in general have already been assigned the highest market caps of any cryptoasset sector and are some of the top-performing assets this year.”
In addition to BAND’s momentum, oracle tokens on the whole have already been assigned the highest market caps of any cryptoasset sector and are a few of the high performing property this yr. pic.twitter.com/G2M5prokBX
— Messari (@MessariCrypto) August 10, 2020
The elevated deal with blockchain oracies might be a run-off impact from the enlargement of the DeFi ecosystem as an entire.
After all, 2020 has been an enormous yr for DeFi: a lot of new merchandise, platforms, and ideas are both already dwell or are being developed on decentralized networks like Ethereum. These embody stablecoins, yield farming, ‘synthetic’ bitcoin (WBTC), decentralized trade (DEX) platforms, and extra.
However, to ensure that any of those platforms to operate appropriately, they should fetch market knowledge from varied web sites and blockchain networks. This is why oracles like the Band Protocol and Chainlink are so necessary: sensible contracts use them to acquire the knowledge essential to run DeFi platforms.
Therefore, as the DeFi sector continues to increase, blockchain oracles play an more and more necessary position.
And there is loads of proof to counsel that DeFi is rising: along with the new merchandise and platforms, the quantity of capital that’s ‘locked’ in the DeFi ecosystem as an entire has grown exponentially since the starting of this yr.
Specifically, knowledge from DeFi Pulse reveals that on January 1st, 2020, the amount of cash in DeFi platforms was $680 million. Today, that determine has elevated to $4.61 billion.
Do you assume that the DeFi ecosystem is poised to proceed its progress? Will tokens like BAND and LINK proceed to develop alongside it? Let us know in the feedback beneath.