Summary
Blockchain oracles can be compared to middle pieces that connect blockchains to real-world information. Binance Oracle does this by connecting smart contracts with verified data from trusted sources. Initially designed for BNB Chain, it has the potential to be extended to other chains in the future. Currently, this allows every project based on BNB Chain to use it and reap its benefits. With Binance Oracle, developers no longer have to worry about data issues and can focus on other important aspects of their blockchain projects.
Introduction
Blockchain oracles are a fundamental building block in the blockchain ecosystem. Without them, smart contracts would have no way to obtain any real-world data. Binance Oracle is a blockchain oracle that enables smart contracts to access real-world data sources needed for blockchain applications. Ensures that smart contracts have the right data at the right time.
What is a blockchain oracle?
Blockchain oracles are services that serve as bridges between blockchains and the real world, allowing smart contracts to access data sources outside their native networks. In other words, they act as a link between on-chain applications and off-chain data.
As such, off-chain events can be transmitted to those on-chain by being recognized by smart contracts. This information can be anything from token or stock prices to soccer match results or the weather forecast.
Blockchain oracles can also verify whether the data is accurate, although they are not the source of the data itself. Instead, they are like an additional layer that collects and authenticates information and transmits it to the correct destination.
Blockchain oracles also allow people to use blockchains in contractual agreements. For example, you and your friend could bet on a soccer game this way: First, you agree on the terms and lock your funds in a smart contract. The blockchain oracle then informs the smart contract of the match result. Finally, after the game ends, the smart contract releases the funds to the winner of the bet.
There are different types of blockchain oracles. An oracle can fall into several categories: software, centralized, decentralized, input oracle, or output oracle. Basically, the way a blockchain oracle works depends on the purpose for which it was built.
What is Binance Oracle?
A smart contract cannot interact with external data without assistance. Instead, it relies on an oracle to feed it with the necessary information. Binance Oracle is similar to other blockchain oracles in that it is a data service offered by Binance that seeks to provide reliable and secure on-chain information for the blockchain.
Currently, Binance Oracle is built for BNB Chain, but that doesn't mean it can't be extended to other chains in the future. Furthermore, all projects built on BNB Chain can use its services.
The BNB Chain ecosystem benefits from the Binance Oracle in many ways. First, having a native blockchain oracle strengthens the reliability of blockchain data. Second, more reliable data leads to new possibilities for new and existing projects.
Lastly, Binance Oracle can attract new developers to the BNB Chain ecosystem. It allows any developer to connect their BNB Chain-based projects with off-chain data, saving them the hassle of maintaining existing data, searching for new sources, and risking using unreliable ones.
What solutions are offered?
Blockchain projects depend on reliable data. Binance Oracle consists of four aspects that ensure the oracle is accurate, timely, and tamper-proof. Let's dive into the Binance Oracle features that connect BNB Chain to the real world.
Data sources
Binance Oracle uses select data sources. This helps determine that the information is accurate and its source reliable. For example, Binance Oracle pulls price data from multiple centralized exchanges (CEX) and decentralized finance (DeFi) applications, and aggregates the data using a weighted average formula.
Data processing and signing
Binance Oracle has a data processing and signing functionality that aims to make data untamperable. Established a distributed signing system called Threshold Signature Scheme and signs the latest data from different sources. Anyone with a public key can verify the accuracy and authenticity of a digital signature, and no one can modify the data without a set of private keys.
Data publication
Data is published to the blockchain through multiple nodes that publish only signed information. Smart contracts that store data are secure and audited, and multiple nodes can adjust the frequency of data release based on different market conditions. This means that accurate data can be obtained when price volatility is high. Multiple nodes also ensure reliable data publishing, even in the most extreme scenarios.
Data monitoring
Binance Oracle data is kept up to date with an independent monitoring service that operates 24/7. Retrieves prices from different data sources and compares them with published blockchain data. The Binance Oracle support team will intervene if a significant deviation is detected.
How to use Binance Oracle
If you've already used blockchain applications, you probably won't need to learn how to use Binance Oracle. When necessary, developers connect their applications to specific data. However, if you are a blockchain developer who must use Binance Oracle, the official manual will guide you step by step to perform the integration.
Conclusions
Without oracles, blockchains would have less potential and possibilities for mass adoption, since information would be limited to their internal data. Although blockchain oracles do not solve the problem of data availability, they can make off-chain data available on-chain through external sources.
Binance Oracle allows smart contracts to connect to all confirmed data outside of its network. Use a process to ensure that data is correct, secure, and consistently up-to-date. Binance Oracle developed four solutions to ensure data is reliable and constantly monitored for potential issues.