Oracles, what they are and what they do. (In crypto)
“Apollo, Apollo — but he is my lord. I will keep silence. He is wise forever, though his oracle spoke brutal words. We are bound to acquiesce. And you must do now as Fate and Zeus ordain.”
― Euripides, Electra
Way, way back at the dawn of civilization oracles appeared in many forms and traditions providing answers often used to predict the future or settle disputes. The Greeks had the “Oracle of Delphi,” ancient China had its hermits and sages, and Norse mythology had the three crones tending the tree of life.
One thing the oracles all had in common was that no one questioned the veracity of their answers. In other words, they were “trusted”.
So, what does random world history have to do with crypto today?
That part boils down to the meaning, a provider of answers, and the trusted status. Trust in the crypto space is a big no-no. Many people have lost money in exchange hacks, exit scams, and Ponzi schemes due to excessive trust.
This means that oracles or indeed any centralized services in the crypto space need to go to exceedingly painful lengths to make the services they provide verifiable and transparent. Shining examples of that are Gemini’s Deloitte audits of USDC, so users can feel comfortable about backing. Another example is ChainLink and them publishing their code as open-source so no one can claim their data is easily manipulated.
Why is this degree of transparency and veracity important?
To understand that fully, let’s look at what may happen when it is lacking.
In a case like Gemini’s USDC you will never have a situation where a user is unable to withdraw his USDC as USD from Gemini due to a lack of reserves. Other, less transparent stable-coins do not offer that same level of security.
Let’s say we have a BTC-ETH or ETH-BTC swap-dapp/contract running on a dex. The contract/dapp says it will always use Coin Marketcap rates to exchange against. If this data was coming directly from a single API stream from a centralized server, it would be relatively easy to hijack that feed and send bad data, consequently ripping off whatever side of the deal is being targeted. ChainLink openly publishing their code and operating a distributed network make such an attack close to impossible to carry off.
“Trust only what is verifiable!” is a solid rule of thumb in the crypto space.
What does all that have to do with Zel?
- Flux is a naturally decentralized network leaving an attacker with no central point to attack to manipulate a data stream. Think potentially close to 900 points to attack vs one for a regular API feed.
- Varying types of oracles can fit easily on Flux ranging from very basic (not important enough to need serious trust) ones providing, for example, local fiat currency rates for pricing displays in wallets or on websites, etc. To high end open-sourced (yes, the docker images can be open-sourced) feed aggregators good enough to base trades or settlements on.
- DibiFetch is running now on Flux as a proof of concept for a medium-high trust oracle service aggregating data from at least two different feeds for each covered market.
You can have a look at the early proof of concept here on https://markets.dibifetch.com
What does this mean for me as a Zel holder/miner/node-operator?
It means that Zel are in a fairly unique development stage that matches their emissions curve. Across the crypto space, this is exceedingly rare since the truth of most software development is delays, delays, bugs, and more delays.
However, with Flux, Zel are delivering the dawning of a new era fully in tune with their first halving. So, to really grasp what is in store, let’s revisit the end of Zel’s first era with a quote from Hunter S Thompson (Fear and Loathing in Las Vegas)
“Life should not be a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside in a cloud of smoke, thoroughly used up, totally worn out, and loudly proclaiming “Wow! What a Ride!”
That ^ is the kind of life the Zel team has lined up for everyone involved with the project.
