Introducing Bluzelle Oracles

Enhance DeFi Project Security and Price Reliability

Since the start of the year, we’ve had an idea of how an oracle can benefit from using Bluzelle DB. With the explosive growth of defi. We saw a problem in that blockchain oracles are either “fast and not secure” or “slow and secure”.

Why does speed matter?

Defi applications capitalize on market opportunities. Acting quickly is critical and they need access to readily available, up-to-date information. This can be the difference between a successful Defi application that empowers its users and one that is minutes behind on updates with few advantages to traders.

Why does security matter?

Defi applications present information that leads to financial decisions being made, so the accuracy of this information cannot be over-emphasized. Security in terms of procuring, storing, and presenting this information is vital.

Seeing this trade-off between speed and security, we saw that by combining oracles with a decentralized database, like Bluzelle DB, you can be FAST and SECURE. And since we have a network of validator nodes that are providing storage and securing the network, we can give further incentive by turning them into Defi price oracles. With that we present Bluzelle Oracles.

Bluzelle Oracles is an Extension of Bluzelle DB

Bluzelle Oracles provides high demand price feeds for defi applications. It has three components that allow it to be a superior oracle service:

1. Fast pricing intervals. Bluzelle Oracles fetches data in short intervals and has it stored on Bluzelle DB. Every node has the same price stored that was validated by the whole network. That means defi applications can grab them quickly and aren’t constrained by congestion issues such as on Ethereum.
2. High-quality price data. Bluzelle Oracles uses a 5 step process that votes in and out data from reputable places and runs them against prior prices. This ensures accuracy and validity to arrive at a blended value that can be trusted and stored.
3. Advanced security triggers. Bluzelle Oracles has an on-demand historical price index. That enables applications to run statistical analysis that will generate warnings when a price point appears out of the norm. For example, a bad actor changing the price to create a flash loan attack.

Bluzelle is able to do the above because it has a decentralized database at its core and it is powered by Cosmos/Tendermint, making it interoperable across chains.

How do Bluzelle Oracles Work?

Bluzelle has hundreds of validator nodes powering the network. In addition to providing storage, each validator also runs a data feeder. The data feeder “seeks” out which data points are required for ingestion, gets these values from off-chain URLs, and “feeds” these values back into the blockchain. Each feeder retrieves the price from multiple sources which sets off our chain of determining the right price.

These data points are whitelisted on Bluzelle in a publicly viewable namespace along with the selection of approved off-chain URLs (the price sources) from which these data points can be retrieved. This whitelist is governed by Bluzelle’s own internal governance protocol, and will ultimately be governed by our network’s validators and delegators.

Bluzelle Oracles uses a 5-step method to produce the cleanest price data point:

1. Validator Voting Power. Each oracle vote is weighted based on network contribution.
2. Standard Deviation Filtering. Apply an upper and lower math tolerance limit. Any value from step 1 outside the limit is rejected and validator slashed.
3. Recalculate Voting Power. The new value is calculated with any outliers from step 2 eliminated.
4. Source Weighting. Sources that are considered a stronger authority garner more weight than those that do not. More intelligent filtering.
5. Delta Banding. Lookup the prior time interval price point and apply a delta band around it. If the new value from step 4 is within the band it remains. If out the range, the value is rejected along with the voting period.

How Bluzelle Oracles Benefits BLZ

As our March to Mainnet campaign pushes forward, Bluzelle Oracles gives further ways to increase value in the network. In addition to providing storage, validators will at the same time become instant price oracles.

Demand increases for the data stored on the network and customers use BLZ to pay the fees to grab the price data.

Validators are encouraged to stake more BLZ as it increases their voting power to earn the higher fees.

This push and pull of BLZ leads to higher network value for everyone.

What’s Next

Our tech team is building our first PoC of the Bluzelle Oracles to be launched on the testnet. Meanwhile, we will start onboarding new Defi partners who will utilize Bluzelle Oracles for high-quality data feeds. There will be ongoing refinements and new features based on the feedback from our early partners.

With the ultimate production mainnet launch, we believe that our oracles service will be able to roll out for commercial use, which will greatly improve the utility and value of BLZ.

Stay tuned on our Telegram channel to be the first to hear more information. Defi projects that want to become an early participant can sign up here.