【Blockchain in Korea】Band Protocol CEO&Co-Founder Soravis Srinawakoon：What is the Most Promising Track in the Defi Market?
Coinin is the Korean blockchain media headquartered in Seoul, South Korea, it relies on industry head resources and community advantages to form a huge influence on the media. It is known as an upgraded version of the blockchain field 36Kr.
Coinin recently launched the "Blockchain in Korea" series in South Korea, visiting the top blockchain practitioners in South Korea and promoting exchanges and cooperation between China and South Korea. In the new phase of "Blockchain in Korea", Coinin invited Soravis Srinawakoon, CEO & Co-Founder of Band Protocol to talk about "What is the Most Promising Track in the Defi Market?".
The 56th phase of the "Blockchain in Korea" invited Soravis Srinawakoon, CEO&Co-Founder of Band Protocol to talk about "What is the Most Promising Track in the Defi Market?".
CEO&Co-Founder of Band Protocol
Band Protocol - First Thai startups to be funded by Sequoia Capital, first Thai project on Binance Launchpad
Stanford B.S. in computer science and M.S. in management
Forbes 30 under 30
Boston Consulting Group Consultant
Bady: You are currently the CEO&Co-Founder of Band Protocol. How did you connect with the blockchain industry? Since you engaged in the blockchain industry, what is your biggest gain?
Soravis: I’ve always been moved by the ethos of blockchain - I first connected with the movement of decentralization, putting the power back into the people’s hands in 2013. I studied computer science at Stanford and after I was exposed to cryptography, I was very intrigued with both the technology and the liberal ideology behind Bitcoin.
We began with a simple Bitcoin faucet app which essentially allows people to earn free Bitcoin by completing a certain task. This was original back then and we garnered over 700,000 users within a year. We were ranked in top charts in both US and Europe. Once Ethereum came out, we began to experiment more starting with a betting dApp with big hopes of disrupting the casino industry which was around $400 billion in market size at the time. What we realised was it was really difficult to securely connect smart contracts with external data outside of the blockchain network. This leads to, I guess, an ‘aha!’ moment where it was in fact a common problem across all blockchain applications, if we wanted to push blockchain towards mass adoption, there needs to be this trusted data layer that connects real world data to smart contract reliably.
Band Protocol is that data layer that provides reliable and secure data to all these blockchain applications. That being said, I’ve gained the most by knowing that all the hard work I’m putting in is on a project that is designed to grow the entire blockchain ecosystem in a sustainable, secure and noble manner as we take one step closer to mass adoption.
Bady: Please introduce the Band Protocol and its main businesses. What is the current progress of Band Protocol?
Soravis: Band Protocol aims to be the go-to data infrastructure layer for Web 3.0 applications by bridging the gap between decentralized applications and real-world data through decentralized oracles that ensure data is accurate and trustworthy through economic incentives.
Last year at the end of September we launched the first iteration of Band Protocol onto the Ethereum mainnet. Six months later, after rigorous feedback and technical development we are on route to launching our own independent blockchain built on the Cosmos-SDK.
By doing so:
We are moving away from the limitations of Ethereum such as the network congestion issue that prevent Chainlink & MKR price feeds from updated for hours on March 12th.
We are more blockchain agnostic, being able to plug into other layer-1 blockchains a lot easier through bridge contracts right now and via IBC when it releases.
We can enable cross-chain payments for permissioned oracle data such as private and commercial APIs.
The second iteration of Band Protocol marks a huge step towards the advancement of oracles and the security of decentralized applications. We have begun to (publicly) integrate our oracle into leading defi project such as bZx, Kava, Fantom, and many more. We have also been working with private integration with a lot of projects which will be announced once ready.
Bady: What kind of industry pain points does Band try to solve by establishing a standard data framework? How does it solve these pain points?
Soravis: At a ground level, there’s the data availability problem where blockchains aren’t able to communicate outside their own network. This makes smart contract very limited in use case. Think of how to build Uber if you are not able to use Google Map data or leverage user log in data from Facebook. Oracles such as Band Protocol step in and become that bridge to the data outside of blockchain. However, what differs between each oracle solution, is the technical design which can heavily influence two major pain points such as security and speed.
Band Protocol’s framework offers flexibility and high level of customization allows data requesters, such as developers or dapps, specify how the data they need is sourced and subsequently aggregated. As such, we’re able to ensure the security of data by connecting our partners with an array of reputable data sources while also enabling the treatment and aggregation of data. For example, we have collaborated with DeFi margin lending/borrowing platform bZx to provide price data that is aggregated and weighted against time.
Remember, oracles are the ones that determine the logic of smart contracts and thus, the underlying behaviour of any decentralized application such as exchange rates and which positions get liquidated. Current solutions require data providers to individually send a transaction on a target blockchain which is inefficient and costly in terms of transaction fees and time. Band Protocol’s solution conducts all the expensive computational requirements (including sourcing and aggregating) off-chain, leaving only the final aggregated value to be submitted to the target blockchain and thereby, ensuring that the data request process is as streamlined as possible.
Bady: The Band Protocol uses DPoS to ensure data integrity. Why choose DPoS as Band’s consensus mechanism? Someone says that DPoS weakens the degree of decentralization to a certain extent, and there is a certain degree of centralized control. What do you think of this view?
Soravis: We use a DPoS-like consensus to be able to pick validators to source and aggregate the data for decentralized applications. This economically incentivises validators to have skin in the game by staking their BAND tokens to earn a block reward while also ensuring that they do not act maliciously such as sourcing invalid data or double signing through token slashing.
DPOS has higher throughput and the degree of decentralization depends on the number of validators / consensus participant. Band Chain aims to support 100+ validators, similar to Cosmos / Kava and etc, not just in the order of 10s that are imposed by EOS.
As our technology progresses, our system will support more and more validators hence making it more decentralized. Without the throughput from DPOS-like consensus, we won’t be able to serve data quickly to public blockchains. Therefore, I believe DPOS-like consensus can be used effectively given that distribution is fair to leverage its scalable aspects.
Bady: DeFi is known as one of the fastest growing areas in the cryptocurrency industry. Stablecoin, lending, and decentralized exchanges are three major tracks of Defi, which one are you more optimistic about and why?
Soravis: I’m personally a big fan of stablecoins because they enable expansive use-cases from lending/borrowing, instantaneous money transfer and in particular, their ability to bank the unbanked.
Celo, who our team met at Devcon 5 Osaka, is a noble project. I’ve been following and to be honest, quite a fan of. What they do is enable financial tools and services to anyone that has a mobile phone starting through their stablecoin, cUSD. Their focus is on countries without financial systems or with hyperinflated currencies. Coming from a social impact standpoint, Celo makes me highly optimistic about the power of stablecoins. Same with Terra in Korea，pretty big fan of Do, the CTO. I have been friend with him for 10 years.
I’m also quite optimistic about synthetic tokens where one can create token which mirrors real world asset (stablecoin is just one example as it mirrors real world currency). If we are able to create reliable system that allows anyone to trade global stock, commodities, bond and more, we will be able to create a truly open finance platform.
Bady: Recently, DeFi encountered a crisis of trust because of its own security issues. What is the biggest problem that DeFi faces now?
Soravis: In the last several weeks, we’ve seen a huge stress test on DeFi with liquidation attacks, oracle exploits and failed oracle price feeds. This has left the question of how can we still trust in DeFi protocols that we have handled almost $1.2 billion in funds at one point.
The answer lies in all DeFi protocols, blockchain projects and applications alike to take no chances, take no risks when it comes to protocol security. Whether this is implementing multiple oracles to cover different surface areas of risk or diversifying your data sources to get an accurate data feed - the big problem and question DeFi faces now is “How can we absolutely ensure the safety and security of our protocols?”. I believe it’s a matter of time before we iterate enough to prevent all attack surfaces and become more immune. Oracle problem will be solved and trust will happen over time. This is similar to Ethereum own development where it faces many problems including DAO hack, Parity hack, etc. Now it has been battle-tested so it becomes more bullet proof, not 100% yet but we are getting there.
Bady: Within a day on March 12, the stock markets of 8 countries including the United States, Canada, Thailand, and South Korea melted down. As the global economic panic spread, Bitcoin's halving market experienced a step-down plunge. Bitcoin is considered to have no hedging properties. Do you agree the opinion that Bitcoin is a purely high-risk asset?
Soravis: While I’m not sure the notion that Bitcoin is purely a high-risk asset stands correct, I am sure that it is a risk-on asset right now that is finding its store of value narrative. As volatile as Bitcoin is, it’s important to remember the reason why it was created during the last global financial crisis - a trustless cash system to remove the third party intermediaries that society has become so dependent on.
Bitcoin to some degree reflects the trust the people have in our traditional financial system and how it plays out in 2 years, 5 years, 10 years, 20 years may just be the most interesting chain of events we witness as the passage of time passes.
In the current risk-off environment, all assets are down including gold. Bitcoin narrative of being store of value will have to be tested over a much longer period of time, as opposed to a one week or several weeks sell off. If you notice also, in recent day, Dow Jones and other indexes continue to fall whereas Bitcoin has been holding its ground fairly well. In fact I think BTC has rebounded much faster than equity at the moment, and will continue to lead when covid situation is better.
Bady: What is the latest activities and future plan of Band Protocol? In what ways does Band Protocol hope to cooperate with projects or institutions in China and South Korea?
Soravis: Right now our focus has two parts: one is on the development of Band Chain which we plan to roll out in four phases starting from token mechanics to public data query to private data query. Most importantly, we are working with onboarding validators, wallets, exchanges and of course, DApp plus layer-1 integrations of Band Protocol. This means we are also looking to plug into such ecosystems in China and South Korea. We have been in active discussion with many of the reputable ones and we will announce once those are ready.
Another one is on driving adoption and integration. This means working with both DApps and traditional corporations in China and South Korea as well. For example, we have been working with some Defi projects originated from China and Korea, they will be using Band Oracle to source reliable price feed as well as random number generators for gaming and gambling apps. We have been in active discussion with traditional enterprises too in using Band Protocol to connect their data to blockchain.
Bady: As a well-known person of the Thailand blockchain, you may know a lot of outstanding practitioners in the blockchain industry. "Blockchain in Korea" interview program is launched by [Coinin], is dedicated to exploring high-quality blockchain projects and practitioners. Could you recommend three honored guests to our program?
Soravis: Firstly, I introduce SCB Bank Thailand(Siam Commercial Bank). One of the largest banks in Thailand, about to issue their own stablecoin and also has invested in Ripple back in 2016.
Secondly, I introduce the CP, biggest conglomerate in Thailand. One of the chairmans is interested in crypto and has made numerous investments into blockchain space. He is coming up with his own cross-border crypto payment solution.
The last one is Sorawit Suriyakarn. Our very own CTO. While I am able to comment on general business, he is much more qualified to comment on technical development of the industry, not just Oracle. This includes DeFi technical attack vector, oracle problem, privacy problem, etc. He was first ranked in Thailand in computer science competition, got a Gold Medal in international competition and Vitalik got a Bronze (although different year).
Q1: How do you consider about Cefi?
Soravis: I think centralized finance will continue to play a big role for sure but they serve different purpose. A lot of Cefi serves big businesses e.g. current crypto loans in Cefi serve exchanges, mining pools, etc. whereas Defi mostly serves regular users.