Blockchain oracles have occupied a prominent position in critical web3 dialogues recently. The role of oracles in providing up-to-date, secure and timely information to smart contracts must be emphasized. Without oracles, smart contracts would be grossly limited, and the blockchain ecosystem would be unable to unlock more considerable prospects or utilize its exceptional capabilities.
There exists a consensus on the uniqueness of blockchain oracles, which begs the question, isn’t it crucial that there be a platform that addresses the capabilities of oracles while highlighting their current limitations and restrictions? No doubt, such a platform should be encouraged, and this is what makes summits like the Blockchain Oracle Summit (BOS) a critical tool for the demystification of oracles and the overall growth of the blockchain ecosystem. With that said, and in view of the upcoming BOS ’23 scheduled for July 21-22, let’s dive into the exciting world of oracles and explore the significant technological innovations permeating the space.
Oracles in CEX and ReFi
The incredible thing about oracles is the innumerable use cases one can expound on. Oracles, by providing off-chain data, are of great relevance in data supply chains, insurance, prediction markets, gaming, and decentralized finance (DeFi), among others. Let’s take a cursory look into the role of oracles in preserving trustworthiness and security in centralized exchanges (CEXs) through the Proof of Reserve audit.
It is undeniable that the past year witnessed a massive dent in the public perception and acceptance of cryptocurrency as a globally accepted means of transaction and as a store of value owing to the bust of several notable Cryptocurrency exchanges and lending platforms such as FTX, Three Arrows Capital, BlockFi and Celsius Network among others. A laudable solution to addressing such issues and mitigating users’ losses would be through the Proof of Reserve audit. As a concept, Proof of Reserve audit allows centralized institutions – like many crypto exchanges – to prove their trustworthiness to their customers via the aggregated Merkle tree. Cryptographic proof of reserves audits uncover ecosystem dependencies, unrestrained protocol hazards, and other issues. An example of an oracle working on this is Chainlink; notable exchanges with the Proof of Reserves audit system include Binance; Kraken; BitMEX; OKX.
Another great topic to touch on is Regenerative Finance (ReFi). On the blockchain, ReFi evaluates a natural asset’s value based on its capacity for regeneration and preservation. Unlike traditional finance, asset valuations aren’t solely determined by the cash flows generated using the assets. The fundamental principles of ReFi place a premium on long-term viability, openness, justice, and community engagement. Additionally, ReFi works to advance accessible, fair, and egalitarian financial systems that support the resilience and health of people, ecosystems, and the planet.
This Blockchain-based regenerative economic paradigm comprises the following:
- Determining the worth of natural resources
- Putting this value into a blockchain-based tradeable asset
- Generating cash flow for the assets.
Several protocols are working in the ReFi industry, namely, Coorest, Etherisc and Toucan Protocol among others. It is worthy of note that Etherisc presented on their use of oracles at the inaugural oracle summit in Berlin last year.
Oracles, Gamefi, and Random Number Generators (RNG)
Numerous facets of life depend on randomness, from security, cryptography, or computer simulation to games of chance like lotteries. Constructing a reliable Random Number Generator (RNG) has taken a lot of work since obtaining a good randomness source is always challenging. The two categories into which RNGs are often classified are pseudo-Random Number Generators (PRNGs) and True Random Number Generators (TRNGs). Mathematical algorithms, which are considered deterministic, are used by PRNGs. These RNGs are built around finite-state machine algorithms that generate pseudo-random determinism sequences from beginning values known as seeds in mathematical operations. Contrarily, TRNGs get their randomness from various physical events, including thermal noise, radio noise, and so on. Outside of those mentioned above, the decentralized blockchain-based applications (dApps) using smart contracts offer a provably fair consensus-based system to determine outcomes that can be openly reviewed and improved upon by all participants.
Case in point, smart contracts may access random values using Chainlink VRF, DIA and API3, among others. Patrick McClurg, Software Engineer at Protocol Labs – Drand will speak on how to achieving truly random outcomes with RNG at the upcoming edition of BOS in Paris!
BOS ’23 and Zero Knowledge Proofs
Back at BOS ’22, Laurence Kirk, CEO of blockchain consultancy, Extropy, delivered a presentation on how Zero-Knowledge Proofs could be applied to oracles, focusing on the challenges in data verification and privacy standards. Since that presentation, there have been numerous opinions and discussions on social media platforms on the opportunities that ZK proofs can enable.
ZK experts and enthusiasts will be gathering at BOS23 for a more elaborate discussion on the subject especially in terms of how to utilise this complex cryptography in critical sectors. One such sector includes healthcare, in which Crotalus Labs is leveraging oracles, ZK proofs, dynamic NFTs and decentralized identifiers for the organization and preservation of medical data. Catch Crotalus Labs’ co-founder Alberto Melon Fernandez in Paris this July as he zooms into how the healthcare industry can benefit from such applications of blockchain technology.
Other discussions at BOS23, will center on enabling a secure and safe collaboration between oracles and ZK while highlighting potential pitfalls and vulnerabilities in the technology.
In this article, considerable effort has been made to highlight major innovations involving Blockchain Oracles with the objective of revealing to readers the possibilities of this amazing technology while showcasing the companies at the forefront of these creative technological advancements. These innovations from the relatively esoteric element – blockchain oracles – are mind-blowing, yet not fully understood; hence, there is a need for platforms such as the Blockchain Oracle Summit to provide objective and comprehensive insight into the true capabilities of this technology.
“Oracles are one of the most critical components in the web3 infra stack, as they are the hardest to decentralize and often become the weakest point in a web3 applications architecture. Designing the right solutions for our industry will be paramount in order to fulfil our vision of a truly censorship-resistant and unstoppable value transfer protocol.
BOS23 is the place where leading players of web3 infrastructure and oracles meet to discuss how we can move the industry forward together. Joined efforts will be needed in order to realize the vision of web3!” – Hilmar Orth, Founder, Gelato Network (a speaker at the Oracle Summit 2 years in a row)
The second part of this two-part series will be an in-depth account of the latest developments in cross-chain bridges and the exceptional speakers addressing subjects related to these at the BOS ’23. Stay tuned for more!
The Blockchain Oracle Summit provides an avenue for anyone interested in learning more about the prospects and possibilities of Oracles in an environment that provides a terrific backdrop for Blockchain technology enthusiasts to connect, network, and have remarkable discourse with leading figures in the space. There’s no other place you’d rather be!