The Fantom Foundation announced a strategic partnership with Band Protocol back in March, and Band Oracles are now available on the Fantom mainnet (FTM) today, the platform's official website said.
Compared to other blockchains, transaction fees at Fantom are very low, allowing for faster and more numerous oracle requests. In other words, Fantom DeFi provides higher accuracy of the price feed, which is a must for user experience.
The Band Protocol will provide mission-critical data streams for the Fantom DeFi suite, including stablecoin minting, lending / borrowing and synthetic asset trading.
As Fantom DeFi grows, the partnership will expand to other features. This will allow all developers on the Fantom Opera mainnet to access Band Protocol oracle data for their dApps.
What is Band Oracles?
An oracle is an "agent" that verifies real-world data and transfers it to the blockchain for use in smart contracts.
The Band Protocol (BAND) is a cross-chain decentralized oracle platform that brings together and delivers secure and tamper-proof data in real time.
DeFi uses smart contracts built on blockchains to eliminate middlemen and reduce the need for trust. Centralized data sources are susceptible to attacks and can destabilize the system by eroding trust at a single point of failure. Decentralized oracles offer a game theory solution to transfer proven external data feeds to DeFi.
Smart contracts gain new functionality by accessing accurate data inside and outside the network.
For example, oracles can provide data on the prices of cryptocurrencies or other assets like gold or stocks that DeFi protocols can integrate.
Why Fantom chose Band Protocol
Band Protocol is a scalable, low-cost oracle platform that meets all the requirements for Fantom Finance.
Scalability: Computing is done on BandChain, a high-performance blockchain based on the Cosmos SDK.
Independence and cost-effective: costs do not depend on the cost of gas on Ethereum. Correct data will be delivered on time, even under heavy network congestion.
Ease of Integration: Compatibility with the Cosmos SDK allows developers to effortlessly implement pricing oracles. Plus, Oracle's predefined scripts make it easy for anyone to get started.
Customizability: Developers can create custom oracles that suit their needs, independently configuring characteristics such as external data sources, aggregation methods, and security settings.
Decentralized: BandChain is decentralized and virtually eliminates any risk of attack using 65 validator nodes.
How Fantom Finance integrates Band Oracles
Fantom Finance is a fully featured DeFi suite that the Fantom team has been developing since January. Users can lock tokens (first FTM and then other tokens) to mint fUSD, a stablecoin pegged to the US dollar. FUSD can then be used to trade, borrow and lend 176 synthetic assets like fBTC and fETH.
It all happens in one intuitive interface and runs on top of the fast, scalable and secure BFT consensus engine.
When minting fUSD, the protocol needs to know the price of the FTM in order to determine the debt limit. Users can mint no more than 50% of the dollar value of their FTM in fUSD. This is where the Band oracles come in. The oracles set a price benchmark for minting fUSD (and repaying future debt) so that the system is well secured and secure.
Band Protocol is an important building block of fMint, the gateway to Fantom Finance.
In addition to using Band oracles in DeFi, the customizable Band Protocol design allows Fantom developers to also access a variety of real-world data related to events, sports, weather, random numbers and more.
As the Fantom ecosystem develops, Band oracles will provide additional data streams for new features in the future.