Jacob678 (OP)
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August 04, 2020, 07:12:17 AM |
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The rapid development of DeFi triggered the boom of Oracle projects.
DeFi is getting more widely used in the blockchain ecosystem, and is known as the new financial revolution. Recently, the token price of DeFi project has skyrocketed, making DeFi the focus of cryptocurrency field and even the whole blockchain industry.
When we talk about DeFi, we have to mention Oracle machine. Oracle is an implementation mechanism of the interaction between the blockchain and the real world. It establishes a trusted bridging mechanism between the blockchain and the external world, so that external data can enter the blockchain safely and reliably. At present, Oracle machine is widely used in financial derivatives trading platform, lending platform, express tracking / IOT, stable currency, gambling game, insurance, forecasting market and so on, which is an important prerequisite for the rapid development of DeFi project.
The rising market value and lock-up size of DeFi have attracted great public attention, and many start-ups have turned their attention to this field, hoping to gain some profit in this area. At present, blockchain projects exploring Oracle in the market have different features, offering various solutions. Among them, ChainLink, Themis, OracleChain, NEST and Tellor are the leading projects in the Oracle market. How can they win in the fierce market competition? Who will finally stand out and lead the industry?
Who is the best oracle project?
Oracle can provide external data source for the blockchain smart contract, and solve the specific data problem between the blockchain and the real world. When a smart contract on the blockchain has data interaction requirements, Oracle will help the smart contract collect external data outside the chain after receiving the demand, and then send the feedback of the obtained data back to the smart contract after verification. In practical application, the design of Oracle mainly focuses on information confidentiality, integrity and availability.
Generally speaking, all of the Oracle projects aforementioned are decentralized Oracle machines. However, in order to ensure the confidentiality, integrity and availability of Oracle information, different projects adopt different solutions: NEST is a distributed price Oracle network that aims to solve the price chain problem through decentralized incentive scheme; ChainLink is the first decentralized Oracle solution on Ethereum, which is committed to building a high reliability distributed Oracle network; with a different construction mode from ChainLink, Tellor's decentralized Oracle based on POW consensus; OracleChain is the first decentralized Oracle solution on EOS; and Themis, which recently launched in the blockchain market, is an unique project based on Random Oracle.
In terms of data security, in the ecosystem of ChainLink, the quotation node can only become a formal node after assessment. ChainLink will confirm the identity of the node to prevent attacks and use as a constraint on the node. Because the institutional node itself has a high credibility, the reputation cost of series fraud is high, the security of ChainLink is guaranteed. Themis mainly ensures the authenticity and reliability of the data of Themis oracle by setting up data providers, data verifiers and arbitration nodes, and through the corresponding token reward and punishment mechanism; while OracleChain adopts an independent proof of repudiation & deposit mechanism, a reputation system of pawning token reward and punishment mechanism that can rewards data nodes to punish evil nodes, which can be applied in forecasting market platforms, such as Augur, Gnosis, etc.
NEST protocol uses mortgage asset quotation, arbitrage verification, price chain and beta coefficient to ensure the accuracy of the price and protect the system from being attacked. Being a POW Oracle network, Tellor believes that speed is not the core feature of blockchain, and tends to build a network that focuses more on decentralization and provides reliable data query for high-value assets. The combination of the advantages of POW mining and POS pledge provides certain security guarantee and flexible incentive mechanism for Tellor, which has attracted many users.
The above schemes can ensure the security of data to a certain extent. However, with the growth of service business scale, the potential benefits of node forgery is becoming higher, and the security of ChainLink will gradually decrease. Contrary to ChainLink, the security of Tellor’s decentralized Oracle is directly related to the value of its token, TRB. When the market value of TRB is not high enough, it is likely to become a vulnerable target of attacks. Therefore, in the early stage of Tellor, security is at risk. In addition, for financial services which require high price sensitivity, there is a certain price fluctuation risk in extreme cases when NEST price is used.
In contrast, Themis uses multiple token reward and punishment mechanism to increase the attacker's cost, and multiple amplification is used between the new round of pledge scale and the previous round. With the increasing number of rounds of data validation, the token pledged by malicious attackers to maintain their expected malicious price will be higher, and will eventually lose all the pledged assets. After comparison, Themis seems to stand out in the competition of maintaining the security of Oracle data.
How do the Oracle Projects Develop in the Future?
The future development of the Oracle project undoubtedly affects many start-ups. All projects hope to win the competition, lead the trend of Oracle machine, and become the leader of the core reform of DeFi. At present, several mainstream projects in the market still have a lot of room for improvement.
Unlike other mainstream projects that are committed to supporting multiple mainstream public chains, OracleChain is only developed on EOS currently, which will undoubtedly limits its development. For ChainLink, compared with other Oracle projects, its chain aggregation cost is higher with poorer scalability, and the reputation based system is easy to centralize. In this regard, only through liquidity mining to guide liquidity and constantly breakthrough, can ChainLink reach a new height in terms of the number of users, transaction volume, locked assets etc.
As mentioned before, it is difficult for Tellor to provide a separate Oracle service for those DeFi projects with a value of hundreds of millions of dollars due to the lack of market value in the early stage. In order to develop better, Tellor needs to cooperate closely with other encryption projects, or provide services for encryption projects together with other Oracle machines, so as to gradually realize the positive cycle of value growth, enhance its own value, and greatly increase the cost of attack.
NEST can provide good solutions to the price risk problem of DeFi. However, due to the lack of a strong centralized team and the lack of channels and endorsements in the ecological development of the project, NEST will inevitably encounter many obstacles in the future business development. Similar to NEST's ecological construction, Themis also relies on the coin holder community. The total amount of Themis token, MIS, is 1 billion, of which 100 million will be used for early project promotion and exchange for data providers and verifiers to provide and verify data, and the remaining 900 million will be produced by mining, of which 75% will directly reward data providers and verifiers, 10% will reward developers, and 5% will be used as arbitration node awards and ecological incentives. However, Themis has introduced a unique coin-holding ranking method, which well ensures the positive development of the community.
Themis's coin-holding ranking is calculated based on the jumping ranking weighted algorithm, rather than the weighted average of users' coin-holding quantity; users in the best ranking area will get the maximum benefits. This ranking method can avoid MIS being controlled by a few people and avoid monopoly. It provides a good mechanism guarantee for attracting more users to participate in mining. At the same time, it is also conducive to the decentralization of data providers, thus ensuring the decentralization of Oracle system. Themis can bring many opportunities for miners and stimulate the healthy development of its ecosystem. In addition, the random number mechanism introduced by Themis can provide real and effective random numbers, which can serve many DeFi scenarios, including decentralized lottery, decentralized game, decentralized lottery, etc. With Themis’s development momentum, Themis is likely to surpass other developed projects and become the core project in the Oracle field.
In this interconnected era with DeFi projects continue to rise, people begin to pay more attention to data security and authenticity. Oracle solves the problem of data interaction between blockchain, the Internet and the real world, and is the core of blockchain development. We are looking forward to the continuous breakthrough of Oracle technology and the growth of DeFi.
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