- 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
-637351807388243992.png)
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Latest Crypto News & Analysis
Editors’ Picks
This hedge fund poured over $456 million into Ethereum in a week as ETH price dipped
While Ethereum price has risen significantly this year, the token has recently suffered several periods of volatility lately, reaching a swing low at $3,675. Ethereum fear and greed index is displaying a reading of 34, indicating fear which suggests that the token may be slightly oversold.
Polkadot Price Prediction: DOT stabilizes for a 20% rally
Polkadot price has tagged the $24.84 support floor twice, suggesting that the bulls are building up momentum. Investors can expect DOT to see a quick 20% run-up to $30.89 from its current position. If the altcoin sets up a swing low below $24.35, the bullish thesis will face invalidation.
US Senator Sherrod Brown warns stablecoin investors could end up losing all of their money
Brown stated in a Senate Banking Committee hearing that stablecoins are neither decentralized nor transparent. He further warned investors that they could lose all of their money in stablecoins.
Chainlink primed for a short squeeze that catapults LINK to $26
-637336005550289133_Small.jpg)
Chainlink price action, like the majority of the cryptocurrency market, has suffered some intense sell-offs and moves into possible bear market territory. Buyers have been able to stave off a clear bear market level within the Ichimoku system.
BTC might dive below $40,000
Bitcoin price is currently hovering around a crucial barrier as bulls and bears hash it out. This fight for control shows indecision among the participants and is often formed before a volatile move. Short-term investors need to be cautious about the next move, therefore, so as not to be caught off guard.