- The audit requested by Band Protocol came out earlier and identified an issue with the oracle network.
- According to the report, the data from the oracles 'must be implicitly trusted.'
Band Protocol had a colossal bull rally since March 12, increasing in value by more than 9,000% in just six months. Like most coins, BAND is currently under consolidation after a notable market crash; however, the digital asset is at risk of falling further due to an unfavorable audit report.
Major issues with Band Protocol could drive the price down significantly
There are several issues found in the audit. The report has five suggestions for BAND to improve. One of the suggestion synopsis states:
The BandChain Protocol will record validators that do not report data when requested and reward validators based upon their previous activity. In an instance that a MissReport function is called on a validator, they are then marked as inactive and unable to get a portion of the oracle reward. While this provides incentive for data availability, which is stated to be the main goal of this phase of the BandChain oracle, it does not provide any guarantees on data correctness.
$BAND commissioned an audit. Biggest issue identified is the "oracle" network has no mechanisms to ensure data validity & no clear path to do so considering the underlying Tendermint system.
— $run the juels (@nullpackets) September 7, 2020
Is "data (that) must be implicitly trusted" really decentralized?@bandprotocol #CTO pic.twitter.com/MTZfRwhoc6
Most critics are now saying that BAND can't be called an oracle anymore. Furthermore, it seems that the team of Band might not be able to fix all the issues due to the intrinsic design of the protocol itself.
BAND/USD 12-hour chart
Considering the significant selling pressure from the entire market, this new report could have a devastating effect on BAND's price in the short-term. There are practically no support levels on the 12-hour chart beside the 50-MA and a low at $3 established on August 2, which coincides with a psychological level. If the current market momentum continues, BAND could slip towards $3 as the 50-MA would probably not be enough to hold the price. The RSI would become overextended, however, if the downward move is propelled by the audit, the technical indicator loses strength.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
Polygon joins forces with WSPN to expand stablecoin adoption
WSPN, a stablecoin infrastructure company based in Singapore, has teamed up with Polygon Labs to make its stablecoin, WUSD, more useful in payment and decentralized finance.
Coinbase envisages listing of more meme coins amid regulatory optimism
Donald Trump's expected return to the White House creates excitement in the cryptocurrency sector, especially at Coinbase, the largest US-based crypto exchange. The platform is optimistic that the new administration will focus on regulatory clarity, which could lead to more token listings, including popular meme coins.
Cardano's ADA leaps to 2.5-year high of 90 cents as whale holdings exceed $12B
As Bitcoin (BTC) gets closer to the $100,000 mark for the first time — it crossed $99,000 earlier Friday — capital is rotating into alternative cryptocurrencies, creating a buzz in the broader crypto market.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: Rally expected to continue as BTC nears $100K
Bitcoin (BTC) reached a new all-time high of $99,419, just inches away from the $100K milestone and has rallied over 9% so far this week. This bullish momentum was supported by the rising Bitcoin spot Exchange Traded Funds (ETF), which accounted for over $2.8 billion inflow until Thursday. BlackRock and Grayscale’s recent launch of the Bitcoin ETF options also fueled the rally this week.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.