5 Promising Decentralized Oracles in 2022
Although equipped with different benefits, Blockchain technology is limited in its abilities as it cannot interact with data from the real world. Smart contracts which give power to the blockchain only get executed when certain conditions are met, but how does it get the information as to when a condition has been completed?
Oracles are likened to be the powerhouse of decentralized finance as they are the middlemen between the real world and blockchain. Oracles are external entities that feed information from the real world to smart contracts to enable them to execute the conditions as agreed. Smart contracts on their own have no power to interact with the real world; oracles are what make that possible.
Despite the enormous benefits oracles offer, there seems to be an oracle challenge. The blockchain aims to foster decentralization and remove power from a central authority. If a single oracle monopolizes the opportunity of feeding the blockchain with information, that defeats the essence of the blockchain as that single oracle can provide wrong information to the blockchain, and the smart contracts get to act on that information. A simple reminder that the transactions on the blockchain are irreversible, and a mistake cannot be reversed once executed.
Blockchain oracles can either be centralized or decentralized. While centralized oracles are powered by a single body and information is gotten from a single source, decentralized oracles, on the other hand, use multiple and independent data sources. This is ideal for the preservation of the aim of blockchain technology.
The current designs of oracles have loopholes that have led to the huge exploitation of tokens from different DeFi protocols. The lack of accountability, transparency, price delay, and deviation also contributes to most DeFi protocols’ issues.
Here are 5 decentralized blockchains that proffer solutions to these raging challenges.
1. QED
QED is a decentralized Oracle protocol that connects multiple blockchains, smart contract platforms, and off-chain data sources. Its hard external collateral and economic incentive model optimizes collateral returns to maintain a healthy system and decentralize. It naturally weeds out poorly performing oracles by skewing fee allocations towards historically accurate participants. For QED, oracle capital efficiency is directly related to data accuracy in real-time, thus generating a survival bias for reliable oracles. The core QED smart contracts run on the UX Network, a blockchain capable of handling over 20k transactions per second.
The QED Oracle software has been operating for over two years as DelphiOracle. Its battle test was ‘Black Thursday’- which happened in March 2020, where it functioned at total capacity despite the market state. It is also important to note that QED is designed so that any Oracle software can ultimately plug into the economic model as users or Oracles prefer.
2. SupraOracles
SupraOracles specializes in providing cross-chain interoperability, 3–5 second finality, and cutting edge cryptography — all backed by thousands of hours of R&D and simulations. Its mission is to build the highest-performing blockchain infrastructure to power the world’s value exchange.
SupraOracles prides itself in its decentralized nature as nodes pull data from multiple sources and the incorporation of incentives for nodes, scalability as singular nodes exist in multiple Distributed Key Generation configurations in parallel, organized in randomized network topologies, ultrafast and secure nature as its architecture allows parallel processing through powerful cryptographic primitives, quick finality. It is much faster, offering 3–5 second on-chain refresh rates and cross-chain & interoperability, and is compatible with many blockchains such as Ethereum, Solana, Polygon, etc.
The SupraOracles team has received sizable grants, credits, and awards of over $1,000,000.
3. Razor Network
Razor Network is a robust and economically secure decentralized oracle focused on providing data to smart contracts using a network of stakers. Its core features include complete decentralization, high security, scalability, proof of stake, and fast nature. Razor Network comprises end-to-end decentralized oracles with no centralized bottlenecks.
It is resistant to collusion, bribery, and censorship attacks. It can be deployed on a scalable network and is blockchain. It is secured by an efficient Proof of Stake network with strict penalties for misconduct. It has an automated process to fetch data without compromising security.
4. Band Protocol
Band Protocol is a cross-chain data oracle platform that aggregates and connects real-world data and APIs to smart contracts.
Its flexible oracle design allows developers to use any data. It also allows them to create custom-made oracles using WebAssembly to connect smart contracts with traditional web APIs within minutes.
It consists of BandChain, which is designed to be compatible with all smart contract platforms and blockchain development frameworks. BandChain can pull data from external sources, aggregating and packaging them into an easy-to-use cryptographically verified format across multiple blockchains.
5. Dot Oracle
Dot Oracle is a decentralized Oracle and Cross-chain liquidity network that aims to provide real-time data to blur the boundary between the Polkadot Ecosystem and the Off-Dot world.
Aside from the data supply, DotOracle also aims to create a liquidity network layer that transfers digital assets back and forth between Polkadot and other smart contract platforms, especially Ethereum.
DotOracle is the first decentralized, non-custodial liquidity bridge network that aims to transfer digital assets back and forth between MoonBeam Polkadot and Ethereum in a fast, decentralized, secure way.
Its core features include a non-custodial decentralized bridge, bonded network with slashing, real-time off-Dot data provider, Byzantine fault tolerance consensus, high availability network, and complete decentralization.
With DotOracle, Users have complete control of their assets during the transfer of their assets from/Dot to/from other blockchain networks. To establish a bonded network, all DotOracle nodes will have to deposit an amount of DTO token to the DotOracle smart contracts. In cases of violation of the protocol, the deposited token of the node is burned. To allow the push-off-Data to MoonBeam quickly, DotOracle combines PBFT and the Elliptic Curve (EC) Multisignature scheme. DotOracle can provide service as long as 2/3 of the network nodes are online.
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