What is BAND?
BAND is the native token of BandChain. Originally created as an ERC-20 token, BAND is now additionally available as a native token on the BandChain. Band Protocol is a decentralized cross-chain data oracle platform that aggregates and connects real-world data and APIs to smart contracts. The BAND token is used to secure and power the decentralized oracle network.
BandChain is an independent Delegated Proof-of-Stake (DPoS) blockchain built using the Cosmos SDK. It is custom-built for oracle computations including settlement, data sourcing, and aggregation. Validators stake the network's native token, BAND, to secure the network and earn a portion of the fees generated by the protocol.
Band Protocol was created to solve the problem of smart contract applications lacking access to real-world data. It also intends to provide reliable transaction speed and scalability, cross-chain compatibility, and data flexibility. Originally released on the Ethereum blockchain in 2019, Band Protocol eventually built its own blockchain using the Cosmos SDK to relay data across different blockchains.
BAND has a fixed supply of 100,000,000 units with burning capabilities. Note that Wealthsimple only supports the ERC-20 BAND token on the Ethereum network, and not the native BandChain mainnet coin.
How does BAND compare to Bitcoin?
BAND differs from Bitcoin in a few important ways.
First, Bitcoin is a “coin” and BAND is a “token.” That is because Bitcoin powers the Bitcoin blockchain, and it is mined by a decentralized network of computers that solve complicated maths puzzles to verify transactions. By contrast, BAND is a token that runs on the Ethereum blockchain. On Ethereum, ETH is the only coin that can be mined and miners mine ETH to process BAND transactions. It is what is known as an ERC-20 token, the name applied to the generic token standard for the Ethereum blockchain.
Being an ERC-20 token has perks. Blockchains aren’t great at speaking to each other—you can’t get an Ethereum contract to work with a Bitcoin smart contract without some complicated engineering. However, it’s very easy for ERC-20 tokens to speak to one another, which means that BAND can be used in most other decentralized finance applications.
In addition, unlike Bitcoin, BAND is a utility token. While, like Bitcoin, BAND can be used as a means of payment or a store of value, its market price may be very volatile and so it may not be useful for payments or storing value.
Finally, BAND’s market capitalization is smaller than Bitcoin’s. As of June 2022, BAND’s market capitalization was estimated to be $84 million, as compared to Bitcoin’s market capitalization of $576 billion.
Before trading any crypto assets it is important to understand the risks. This overview is a starting point for you to perform your own research prior to investing in a crypto asset. First and foremost:
No Canadian securities regulatory authority has expressed an opinion about BAND, including an opinion that BAND is not itself a security and/or derivative.
Wealthsimple has performed a legal assessment of BAND prior to making it available on Wealthsimple Crypto and has concluded that BAND is not and is unlikely to be deemed a security or derivative. However, there is a risk that this conclusion could change in the future and the impact of this on an asset’s value is outlined in our Product Disclosure.
We evaluated BAND based on publicly available information, including (but not limited to):
- The creation, governance, usage and design of BAND, including the source code, security and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that first created BAND;
- The supply, demand, maturity, utility and liquidity of BAND;
- Material technical risks associated with BAND, including any code defects, security breaches and other threats concerning BAND and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them; and
- Legal and regulatory risks associated with BAND, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of BAND.
Like all other crypto assets, there are some general risks to investing in BAND. These include short history risk, volatility risk, liquidity risk, demand risk, forking risk, cryptography risk, regulatory risk, concentration risk, electronic trading risk and cyber security risk. Each of these risks are described in more detail in our in-app Product Disclosure.
Further to these general risks, BandChain, the BAND development team and other affiliated entities are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of BAND have no recourse to the BandChain, the BAND Development team or Wealthsimple if BAND declines in value for any reason.
Wealthsimple Digital Assets Inc. (WDA) has prepared this Crypto Asset Statement based on publicly available information. Although WDA has taken steps to obtain information from apparently reliable sources, information contained in this Crypto Asset Statement may be inaccurate, incomplete or out-of-date. WDA emphasizes that this Crypto Asset Statement is not exhaustive of all risks associated with trading or staking SOL. Investors should perform their own assessment to determine the appropriate level of risk for their personal circumstances.
WDA is offering Crypto Contracts in reliance on a prospectus exemption contained in the exemptive relief decision Re Wealthsimple Digital Assets Inc. dated June 18, 2021. Please be aware that the statutory rights of action for damages and the right of rescission in the securities legislation of each province and territory of Canada would not apply to a misrepresentation in this Statement.
Last updated: June 30, 2022
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