Band is one of Chianlink's main competitors in the oracle room, which is based on Cosmos technology. In a recent Cointelegraph interview, Soravis Srinawakoon, the CEO of Band Protocol said:
“If you look at Chainlink, a data request can cost nearly $ 450 right now because someone has to send the request data to ask for the data. Let's say 20 data providers need to receive this, respond to it with 20 transactions, and then enter into the aggregation contract to do the entire calculation before returning the final result. All of this requires a lot of gas. "
Srinawakoon also provided a link to Chainlink's Ethereum (ETH) contract to support his claim. When we examine a newer interaction with the same contract, the cost appears to be even higher – $ 563.74. We asked Chainlink to respond to those allegations, their spokesman told Cointelegraph:
The links do not point to a request from a user trying to access a feed. This is the total cost of having multiple Oracle Nodes performing a feed update shared by many users during a period of extremely high gas charges that is unique and atypical.
They added that this shows that Chainlink "can operate successfully even in times of high gas costs and high gas charge peaks" and that "we are just done" <...> Implementation of threshold signatures. This solution reduces certain costs for the secure operation of an Oracle network by 1500 times. "
Srinawakoon believes that low fees are just one of the advantages Band has over its main competitor, and notes better interoperability (he mentioned that Band oracles are already available on Waves, TRON (TRX), and ICON) and decentralization.
Srinawakoon said decentralized incentives are built into tape at the protocol level. Data providers are required to deploy band tokens (they are currently deploying tokens valued at $ 500-600 million), which also implies that they could face financial penalties for misbehaving. This is similar to the way oracles were built by EMURGO and ERGO for the Cardano ecosystem to function.
Srinawakoon admitted that Chainlink has dominated the Ethereruem ecosystem until now, but said this will soon change:
“And if you look at Band beforehand, we were actually pretty weak in the Ethereum ecosystem because Chainlink dominated that area. <...> I think this will be the beginning of where we really look into the Ethereum ecosystem, and we have worked with a lot of these big DeFi companies
A Chainlink spokesperson told Cointelegraph that there are profound reasons why Band hasn't achieved similar success on the Ethereum network:
Compared to Band, it's also important to note that their instance on Ethereum had up to 5 days with no price data updated, meaning the data was dangerously out of sync with reality. This is one of the many reasons why, during their time at Ethereum, there wasn't a single live user willing to tie their security to bands oracles on the Ethereum network.
The DeFi area has grown by leaps and bounds this year, driving up the price of Ether and increasing the demand for oracalized data providers like Chainlink and Band. However, as Ethereum gas prices rise, competition between oracle providers is also intensifying.