Ontology Partners with Chainlink to Bring Data-Driven Smart Contracts to Backend Business Models
Ontology is proud to announce a new and exciting collaboration with our US ecosystem partners, Chainlink. With Chainlink being the world’s premier solution for building data-driven smart contracts with high end-to-end security, we are excited to further cooperate to improve the future of the Ontology network.
The Oracle Problem
In order to better understand the benefits of our collaboration, it is important to define the problem being solved. Enter the “oracle problem.”
What is an oracle?
Blockchains are self-contained ecosystems that can only perform computation on data already stored within it (on-chain). An oracle is a gateway to the external world (off-chain). An oracle allows off-chain data inputs to come into the smart contract and output data to be pushed out on to external systems. In this regard, oracles provide answers to questions a smart contract may have about external events, such as “Did the goods arrive on time to the retailer?” Oracles also allow smart contracts to use this information to trigger changes in the real world, such as triggering a payment on an existing payment system upon the arrival of goods.
What is the problem?
Think of a smart contract as a person surfing the Internet and an oracle as the Internet Service Provider (ISP). When a person browses online, the ISP enables them to seamlessly connect on the backend to all their favorite websites, but unfortunately, the ISP is also able to control what you see. This gives the ISP a huge amount of power over the user as it can effectively shape their thoughts and actions.
An oracle works similarly; it enables a backend connection between two disparate systems but has control over the connection. Not only does the oracle control what the smart contract can see (input), but it controls how the smart contract responds to what it sees (output). Therefore, the oracle problem is centered around creating the same level of tamper-proof security for the off-chain connection that currently exists on the underlying blockchain. The reason being that a compromised oracle almost certainly means its connected smart contracts are equally compromised. As a result, a centralized oracle model can put the security of a smart contract in jeopardy because it negates the benefits of end-to-end decentralization.
How does Ontology address it?
By teaming up with Chainlink, Ontology will effectively address the oracle problem. Our partnership provides a new option to the Ontology ecosystem with regards to creating externally connected smart contracts, which has massive benefits for our ecosystem developers. With this collaboration in effect, we want to invite more developers to join us and make use of the great tools Chainlink provides.
Chainlink is a decentralized oracle network that gives smart contracts secure and reliable access to data providers, web APIs, enterprise systems, cloud providers, IoT devices, payment systems, other blockchains and much more. It has the following features:
- A robust market of independent oracles providing a range of data and connections
- Flexibility to customize an oracle connection including the number of oracles, types and number of data sources, aggregation strategies, staking deposits, trusted execution environments, Mixicles, and more
- A reputation framework for evaluating oracles based on on-chain metrics
It’s an all-in-one network for users to customize how their contract communicates with anything off-chain using varying levels of decentralization, data aggregation, and oracle selection.
Most of its functions revolve around translation, transportation, quality control, and premium options. Translation involves using the Chainlink Core software and external adapters to make two different systems compatible for data exchange. Chainlink nodes engage in transportation by retrieving data for the smart contract and sending data out to other systems. The network leverages service agreements and pluggable aggregation strategies for quality control of data. Finally, optional features are available to developers that want to increase the functionality or security of an oracle, such as trusted execution environments that preserve privacy, confidentiality, and integrity of data.
We’re excited about the vast amount of use cases that will now be available to developers in the Ontology ecosystem thanks to secure off-chain connection via Chainlink.