The Orcfax Oracle Vision

6 min readFeb 10, 2024

Oracles are a critical piece of blockchain infrastructure that provide data about the real world as smart contract inputs. These trigger on-chain business logic which often transfer significant sums of financial payments. The risk of oracles being compromised and feeding blockchain smart contracts with false information is called the “oracle problem”.

Since Cardano is a permissionless, public network, any software or service can add data to a Cardano transaction and call themselves an oracle. However, we at Orcfax believe that this name should be reserved for those data feed services that are intentionally designed to solve the “oracle problem”.

Orcfax believes strongly that solving the oracle problem should include decentralized data collection from multiple different primary sources by multiple data validators. We’d like to give you a short introduction to these and some other criteria that we believe makes Orcfax a reliable and trustworthy oracle service.

🔺 Triangulation of data points vs single source data points

To avoid single points of failure or attack, Orcfax uses the mathematical principle of triangulation; all Orcfax nodes are required to query a min of 3+ primary sources as a validation check. If one source fails, gets hacked, or contributes outlier data, then there are still two or more reliable sources to derive authentic values from.

🕸️ Decentralized & permissionless pool of validators vs off-chain kyc-ed validators

Requiring data validators to go through KYC and have people sign contracts goes against the type of decentralization ethos that Orcfax is championing. True decentralized networks are permissionless; meaning participants are only required to meet minimal technical requirements to add their own node and participate. We don’t want to rely on trusted third party oracle companies to be the gatekeepers for a community resource.

ℹ️ Aggregated & validated by Orcfax vs Aggregated and validated by dApp

dApps reduce their risk of hacks and fraud significantly when their input data comes from a decentralized validator pool, run by independent operators. Orcfax helps dApps focus on their core services by doing the data gathering, aggregation, and validation work which would otherwise unnecessarily slow down smart contract execution, increase transaction costs, and introduce new attack vectors for their dApps. Moreover, when dApps and protocols only use their own internal data or do their own external data gathering, they create serious attack vectors and justifiable mistrust amongst the users of their DeFi products.

📣 Heartbeat & on-demand feeds vs heartbeat feeds only

There are many different oracle use cases; each with different time interval needs. Orcfax supports the ability to make our feeds available at regular heartbeats (e.g. every 5 minutes, once per hour, etc.). We also include a deviation formula for our heartbeat feeds (e.g. publish immediately before the next heartbeat if price changes by x%). More importantly, we offer the option for dApps to request data collection, validation and publication on-demand, for their immediate use in the next Cardano block.

🔎 Auditable feeds via user friendly explorer vs difficult to audit on-chain data

Every user, including non-developers, should be able to follow a detailed path that recounts the steps taken to arrive at the oracle values which are published on-chain. Orcfax creates human and machine-readable audit trails of the data collection, formatting. validation and publishing workflows. We use standards-compliant record-keeping practices to ensure that the links between all these on-chain and off-chain components are immutable, inextricable and trustworthy. We provide a user-friendly Explorer app to investigate these audit trails so that users of Orcfax feeds can “Trust But Verify”. Unlike other oracle solutions, this does not require expert knowledge of Cardano eUTXO architecture and a complicated forensic process to follow on-chain transactions.

🗄️ Standards-based interoperable audit trails vs feed only available on-chain

Orcfax believes that there is significant secondary value for real-world data that has gone through vigorous authenticity and accuracy checks, like the information that Orcfax publishes to the Cardano blockchain. Therefore, our audit trail packages are marked up using a number of key industry standards including IPLD, JSON-LD, Schema.org and IETF Bagit. These use identifier links back to the on-chain Cardano transactions containing Orcfax datum. This provides a blockchain-based anchor trust for fact statements that are now highly interoperable and re-usable beyond Web3 (e.g. training AI models on validated real-world facts). Orcfax is continuing its R&D into how to leverage this “data lake of validated facts” for new value-added services and products.

💰 Cost-effective eUTXO model vs cost-intensive eUTXO model

Cardano was designed to off-load as much transaction processing as possible to off-chain components to minimize the amount of on-chain compute and thereby transaction costs. It has accomplished this without security compromises. The Orcfax oracle architecture was intentionally designed to follow these same principles. We have managed to reduce our on-chain interaction to a single certified data publication event while providing standards-based security guarantees for their linkeages back to the supporting off-chain information (available permissionlessly on decentralized storage). Other oracle protocols require lots of NFT handling and a complicated series of inter-dependent on-chain transactions to support their workflow, each adding transaction fees along the way. Instead Orcfax has minimal transaction fees making it the most cost-effective and long-term sustainable oracle platform on Cardano.

🗳️ DAO governance & treasury vs Centralized company

The Orcfax project is currently incorporated as a company in the British Virgin Islands. The sole purpose of this company is to develop and launch the Orcfax oracle network and perform custodial duties for the $FACT token. As soon as specific implementation targets are reached, Orcfax Ltd will dissolve itself and initiate the transfer of Orcfax network operations to the Orcfax Foundation (which will operate as a DAO). 5% of the $FACT supply is reserved to fund the operations of the Orcfax Foundation. After Orcfax Ltd has delivered the full roadmap and desolves itself, the DAO will also become the recipient of the network share of $FACT data feed fees. The DAO will be run via staked-based voting using $FACT to decide on housekeeping matters, such as which contractor to hire to monitor daily network operations, which developers to hire to add new features, and decisions on network parameters like transaction fee percentages and whether or not to add or remove certain feeds. Current Orcfax activities are funded via our $FACT token launch. Many other oracle providers have been funded by VCs who are averse to any type of DAO/community based governance that will affect their ability to get a return on their investment (e.g. pull value out of the oracle project).

👐 Open source vs Closed source

The Orcfax team believes in the ethos of open-source software which allows anyone to copy, inspect and alter software source code for their own benefit. Another key benefit is the concept of “more eyes on the code”, meaning that it’s more likely that developers outside the core team are able to spot and help fix any bugs in the software. Our project itself leans heavily on other free and open-source software components and we share a sense of duty to pay it forward. At the core of the Orcfax oracle network is the Cardano Open Oracle Protocol (COOP) which we’ve already released under the Apache 2 open-source license. This allows other projects to adopt COOP code to implement their own oracle products or features. We’ll continue to open-source more Orcfax components as these are being rolled-out into production in the near future.