Band Protocol Collaborates with bZx to Implement Price Feed Oracles for Lending and Margin Trading

Kevin Lu
Kevin Lu
Mar 10 · 3 min read
Image for post
Image for post

Over the past month, the Band Protocol team has been working closely with bZx Team to create a robust price feed for lending and margin trading. The updated price feed will detect anomalies while also accounts for slippage and liquidity through time-weighted price information.

Kyle & Tom from bZx has been extremely responsive in prioritizing the security and safety of user funds. Since the incident, bZx and Band Protocol team have gone through multiple technical discussions to mitigate the bZx oracle vulnerability and define a new oracle design for decentralized finance protocols to use reliably and securely in the near future.

“We understand that no source is infallible and that there is value in diversifying the risk across multiple oracle providers rather than relying on one.”

Kyle Kistner — CVO & Operations Lead at bZx

The blockchain and therefore, oracle space, is still an emerging area with few incidents where there have been failures due to human errors, malicious attacks or code bugs.

Hence, our solution involves migrating away from bZx’s previous DEX price feed and utilizing Band Protocol + Chainlink oracles to cover an extensive surface area of risk to optimize protocol security and prioritize user safety. This will be implemented in phase 1 as outlined in bZx’s full public release here:

How Band Protocol Oracles Will Be Used

Image for post
Image for post

With Band Protocol’s new data oracle script, we have enabled the flexibility for bZx to fine-tune the oracle and data aggregation method to suit the respective needs. Thus, Band Protocol will feed time-weighted price information that takes into account slippage and liquidity while also geographically diversifying bZx’s oracle risk through data providers across the globe.

If there is a deviation between the quoted rates, Band’s price, and Chainlink’s price, the transaction will revert — everything stops. Hence, if the quoted rates have been manipulated or an oracle fails/becomes malicious, there’s a circuit breaker to halt further trades and avoid jeopardizing user funds. This oracle design is expected to be featured in the full re-release of the bZx protocol.

Driving a Secure DeFi Ecosystem

We have always outlined the importance of oracle design and remain committed to our mission to advocate for the security of decentralized finance by working with multiple other DeFi projects to integrate Band Protocol. We are here to support the bZx team and security of the emerging DeFi ecosystem in the long term

We would be very happy to help any project integrate our secure and decentralized oracle on any blockchain — please reach out to connect@bandprotocol.com if you’re working on #DeFi!

Let’s prevent oracle exploits from ever happening again.

Going Forward

We’re grateful to be able to help bZx recover stronger than ever as the first truly decentralized financial protocol and drive the development of the entire #DeFi ecosystem using the events of last month as stepping stones.

Decentralized finance is only emerging and we are committed to collaborating with other DeFi projects and oracle solutions to ensure the healthy growth of the overall ecosystem.

Onwards!

About Band Protocol
Band Protocol is a decentralized oracle framework for Web3.0 applications. Band Protocol connects smart contracts with trusted off-chain information, provided through community-curated oracle data providers. Blockchains are enabled to connect to any web API with assured data integrity through dPoS economic incentives through one simple function call. Developers using Band Protocol will be able to easily build and manage off-chain oracles, reputation scores, identity management systems and much more.

Website | Whitepaper | Telegram | Medium | Twitter | Reddit | Github

Band Protocol

Secure, Scalable, Cross-chain Decentralized Oracle for Web 3.0

Medium is an open platform where 170 million readers come to find insightful and dynamic thinking. Here, expert and undiscovered voices alike dive into the heart of any topic and bring new ideas to the surface. Learn more

Follow the writers, publications, and topics that matter to you, and you’ll see them on your homepage and in your inbox. Explore

If you have a story to tell, knowledge to share, or a perspective to offer — welcome home. It’s easy and free to post your thinking on any topic. Write on Medium

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store