In the field of cryptocurrency, the oracle track is often overlooked by users because it mainly involves back-end technology. As users of crypto assets, it is difficult for us to directly perceive the value of the oracle, so its role is often underestimated.

In fact, oracles play a vital role in the development of blockchain technology. Blockchain is a relatively closed system, and when it needs to interact with external off-chain data, oracles become an indispensable bridge.

The oracle is not a tool for predicting the future, but a key hub connecting off-chain and on-chain data. It can safely and reliably transmit real-time off-chain data (such as stock prices, gold prices, etc.) to the chain, and can also transmit on-chain data to the off-chain through the oracle, realizing two-way data circulation.

Since the advent of Chainlink, the importance of oracles in the cryptocurrency field has become increasingly prominent, especially in recent market conditions, oracles have become more and more critical.

For example, the rise of popular tracks such as RWA, AI, and DePIN all rely on the functions of oracles, which also promotes the development of the oracle track.

In the RWA track, the role of the oracle is particularly important. It can safely and accurately transmit real-world asset data (such as real estate values, stocks, gold prices, etc.) to the chain. As a bridge between off-chain and on-chain data, the oracle ensures the real-time and reliability of the data.

Similarly, the DePIN project also relies on oracles to transmit critical data. Whether it is market data, user behavior data or any other form of off-chain information, oracles can ensure the accuracy and availability of this data on the blockchain.

In addition, projects in the AI ​​track also need to access off-chain data for learning and reasoning, and oracles play a vital role in this process. They allow AI systems to obtain real-time data from off-chain and perform corresponding operations on the blockchain.

With the development of RWA, AI, and DePIN, the oracle track has also risen. There are already projects with a market value of tens of billions of dollars in the oracle track (such as Chainlink), which undoubtedly opens up new possibilities for the market value space of oracle track projects.

1. PYTH

In the oracle track, there are several high-quality projects worth paying attention to.

Chainlink is undoubtedly a leader in this field. Founded in 2017, it currently has a market value of over $9.8 billion.

In addition to Chainlink, there are two other projects worth paying attention to: PYTH and API3. Compared with Chainlink, the market capitalization of these two projects is still far behind.

PYTH was founded in 2021. Many core members of the team have worked at Jump Trading and Jump Crypto. Its investors include Multicoin Capital and Castle Island Ventures.

Pyth Network is an oracle focused on decentralized financial market data, aiming to provide real-time, accurate financial market data to enhance the functionality and reliability of decentralized financial (DeFi) applications.

As a star project in the Solana ecosystem, PYTH's business scope has surpassed the Solana public chain ecosystem. Currently, it also provides oracle services for multiple public chain ecosystems such as Ethereum and BNB Chain.

On May 20, PYTH completed the 2024 cliff-style token unlocking, and the next large unlocking will not occur until May 20, 2025. Therefore, in the next year, there is no need to worry about the large-scale unlocking of PYTH putting pressure on the market.

During the large unlock on May 20, the price of PYTH fell to about $0.35, but soon bottomed out and rebounded by more than 20% that day, pushing the price above $0.42. This shows that the consensus on PYTH is quite strong. With the support of Ethereum spot and Ethereum ETF, the current price of PYTH tokens is about $0.47.

Currently, the circulating market value of PYTH is US$1.7 billion, and the circulation rate of the token is 36%. Compared with Chainlink, the circulating market value is nearly 6 times larger.

2、API3

API3 was founded in 2020 and received US$3 million in investment in November of the same year, led by Placeholder and participated by CoinFund, DCG and others.

Traditional oracles (such as Chainlink) use third-party oracle solutions. These oracles are hosted by third-party operators and integrate external data provided by API providers and input them into smart contracts.

API3 uses a first-party oracle solution that allows data providers to run their own oracle nodes (Airnodes), eliminating middlemen and providing data directly to users. This method eliminates redundant data transmission processes and significantly improves data transmission efficiency. In terms of data accuracy and latency, API3 can provide greater advantages than third-party oracles.

The current circulating market value of API3 is only over 200 million US dollars, which is nearly 50 times lower than that of Chainlink. However, API3's basic data has grown well recently, and it has reached cooperation with projects such as Blast and Mantle. Therefore, API3 is considered to be a low-market-value, high-quality project with potential in the oracle track, and can be said to be a dark horse.

In general, the connection between blockchain and the real world is getting closer and closer, and blockchain needs to be fed with data from the real world. For example, AI, DePIN, RWA and other projects are inseparable from oracles. It can be foreseen that the market space for oracles will become larger and larger in the future. In this track, projects such as Chainlink, PYTH and API3 are worthy of our attention.