With the development of blockchain technology, decentralized applications (DApp) have gradually become an important direction of technological innovation. The advantage of blockchain lies in its decentralized and tamper-proof characteristics, which makes it widely used in finance, Internet of Things, supply chain management and other fields. A key limitation of blockchain itself is that it cannot directly obtain data from the outside world. Oracle is a technical means to solve this problem. It can connect blockchain with real-world events and provide external data support for smart contracts. This article will introduce the concept of oracle in detail and review the top ten oracle projects to help everyone better understand this important technology and its role in the blockchain field.

Definition and Function of Oracle

An oracle is an intermediary system that can pass data from the outside world to the blockchain. The blockchain itself cannot directly access data outside the chain, so smart contracts can only process transaction data within the chain. The emergence of oracles enables blockchains to obtain external information, especially smart contracts that require external data support to be executed. For example, financial contracts need to obtain stock market prices, insurance contracts need to obtain weather data, etc. Oracles can provide services for these needs.

The role of the oracle is not limited to providing data, it also solves the security and credibility issues of the connection between the blockchain and the outside world. The oracle can provide data in a variety of ways, such as through APIs, sensors, manual input, etc. In order to avoid the risk of single point failure or data tampering, the oracle usually adopts multi-source data aggregation and decentralization to ensure the reliability and accuracy of the data.

How Oracles Work

The working principle of the oracle usually includes the following steps:

1. Data request - when a smart contract needs some off-chain data, the contract will send a request to the oracle for specific information. For example, a contract needs to know data such as weather conditions and stock prices.

2. Data acquisition - oracles collect relevant data from multiple data sources (such as APIs, sensors, databases, etc.). In order to improve the reliability and accuracy of the data, oracles usually select multiple data sources for comparison to avoid errors in a single data source.

3. Data Verification - the oracle will verify the collected data to ensure the accuracy and validity of the data. In order to prevent data tampering, the oracle may adopt a decentralized mechanism, with multiple nodes jointly verifying the authenticity of the data.

4. Data transfer - verified data is transferred to the blockchain and the corresponding actions are triggered by smart contracts. In this way, smart contracts can perform predetermined functions based on external data.

Types of Oracles

Depending on the way data is provided and the degree of decentralization, oracles can be divided into the following types:

1. Centralized Oracle - data is provided by a single third-party organization, and external information is usually obtained through an API interface. The advantage of centralized oracles is that data acquisition is relatively simple, but the disadvantage is that there is a risk of single point failure. If there is a problem with the organization providing the data, the entire system may be affected.

2. Decentralized Oracle - data is provided and verified through multiple independent nodes. This type of oracle adopts a decentralized approach, which can improve the credibility and reliability of data. Decentralized Oracle can avoid the risk of single point failure, so it is more suitable for decentralized applications of blockchain.

3. Hardware Oracle - obtain external data through hardware devices, such as sensors, IoT devices, etc. These hardware devices can directly sense changes in the external environment and transmit data to the blockchain.

4. Software Oracle - obtain external data from the Internet or other networks through software programs, usually through API interfaces or crawler technology to collect information. Software Oracle is more flexible, but attention should be paid to the accuracy and security of the data.

Top 10 Oracle Projects

With the continuous development of blockchain technology, many oracle projects have emerged one after another, which play an important role in solving the connection between blockchain and external data. The following is an inventory of the top ten oracle projects:

1. Chainlink

Chainlink is the most well-known decentralized oracle network. It collects data from multiple data sources through a decentralized node network and transmits the data to the blockchain. The data verification mechanism provided by Chainlink ensures the accuracy and reliability of the data. As the infrastructure of multiple blockchain platforms such as Ethereum, Chainlink plays a vital role in the execution of smart contracts.

2. Band Protocol

Band Protocol is a decentralized data oracle platform that aims to provide fast and low-cost data transmission. It uses a unique cross-chain data transmission mechanism that enables smart contracts on different blockchains to share data. Band Protocol's decentralized nodes can provide efficient and reliable data services.

3. Augur

Augur is a decentralized prediction market platform that provides market prediction data through smart contracts. As a decentralized oracle, Augur can help smart contracts obtain information such as market trends and user predictions for decision-making or contract execution.

4. Tellor

Tellor is a decentralized oracle platform that uses miners to submit data to provide information. Tellor uses an incentive mechanism to encourage miners to provide real data, while ensuring the accuracy of the data through verification nodes. Tellor is mainly used in fields such as finance and insurance.

5. API3

API3 provides a new decentralized oracle solution that allows decentralized applications (DApps) to interact directly with the API interface to obtain real-time data. API3 ensures data reliability and secure contract execution through a decentralized governance mechanism.

6. DOS Network

DOS Network is a cross-chain data oracle platform that focuses on solving the problem of large-scale data acquisition and transmission. DOS Network supports multiple blockchain platforms and can provide efficient and secure data services for smart contracts.

7. UMA

UMA (Universal Market Access) is a decentralized financial protocol that provides decentralized contract execution and oracle services. UMA's oracle system can provide external price data to smart contracts for applications such as financial derivatives.

8. Witnet

Witnet is a decentralized oracle network dedicated to providing reliable off-chain data. Through decentralized nodes, Witnet can provide smart contracts with information from different data sources to ensure the authenticity and transparency of the data.

9. Provable

Provable (formerly known as Oraculos) is an oracle platform that provides trusted off-chain data services. It provides secure external data support for smart contracts through cryptographic verification and decentralized nodes. Provable supports a variety of data types, including weather, market prices, etc.

10. DeepBrain Chain

DeepBrain Chain is a decentralized computing platform based on artificial intelligence. Its oracle service can provide data support related to AI. It can combine smart contracts with machine learning, data analysis and other technologies to provide innovative external data services for blockchain.

Conclusion

As a bridge between blockchain and the outside world, oracles are crucial to the execution of smart contracts. They not only provide external data support, but also solve the trust and security issues faced by decentralized applications. With the continuous expansion of blockchain applications, oracles will play an increasingly important role in finance, supply chain, insurance and other fields. The top ten oracle projects listed in this article show different technical routes and innovation directions, which provide strong support for the development of blockchain technology.

Related Questions and Answers

1. Can the oracle guarantee 100% accuracy of the data?

Although the oracle ensures the reliability of data through multiple data verification and decentralization mechanisms, it cannot guarantee 100% accuracy due to problems with the external data source itself (such as sensor failure, data delay, etc.). Therefore, the oracle system usually adopts multiple data sources and mechanisms within smart contracts to reduce risks.

2. How does the oracle prevent data from being tampered with?

Decentralized oracles verify data through multiple nodes to ensure the authenticity and accuracy of the data. Due to the tamper-proof nature of blockchain, once the data is recorded, it cannot be changed. Oracles usually use encryption technology to ensure that the data transmission process is not tampered with.

3. Are oracles applicable to all blockchains?

The design of the oracle can be customized for different blockchain platforms. For example, projects such as Chainlink and Band Protocol support multiple blockchain platforms such as Ethereum and Polkadot, but the technical characteristics of different blockchains may require different oracle solutions.

4. What are the applications of oracles in the Internet of Things?

In the Internet of Things, oracles can help blockchain systems obtain sensor data or device status. For example, through the oracle of the temperature sensor, temperature change information can be provided to smart contracts for scenarios such as automated control and supply chain management.