Today, Xiaoxiong shared some ideas for investment research and airdrops by discussing oracle machines. The earth-moving dog will fly into the sky and even return to zero. Only by accumulating knowledge can you increase the chance of making money, and keep learning!
When Xiao Xiong first entered the currency circle, he often saw two prices on various derivatives exchanges:
1. The middle price of buying and selling
2. Oracles Price
I was thinking what are Oracles? Prophet Price, The Matrix?
Only after studying it will you know that this is the important oracle price mechanism in Defi
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💡What is an oracle? #LearnwithCIAN
Oracles are third-party services that provide information external to smart contracts. Smart contracts are self-executing contracts with the terms of the contract written directly into the lines of code. However, by design, blockchain cannot access data outside its network. This is where oracles come in.
Why does DeFi need oracles?
The knowledge content of this block is provided by @CIAN_protocol classroom
1. Price information
DeFi projects often involve the exchange, staking or management of various cryptocurrencies or tokens. Therefore, they require accurate and real-time pricing information in order to operate fairly and efficiently. For example: users stake their Ethereum on decentralized lending platforms to borrow stablecoins. Platforms must ensure that the amount borrowed does not exceed a certain percentage of the collateral value. To do this, it needs to get the current price of Ethereum through an oracle.
2. Liquidation mechanism
Some DeFi protocols allow users to take out loans by pledging assets. If the value of the collateral drops significantly, the protocol may liquidate the assets to ensure the integrity of the loan. For example: If the value of a user’s collateral on a platform such as MakerDAO falls below a certain threshold, the system will liquidate the assets. Accurate and timely price data, often sourced from oracles, is critical to this process.
3. Cross-chain communication
As multiple blockchains grow, the need for communication between them continues to increase. Oracles can assist in communication between blockchains by passing critical data between chains. For example: transferring assets from Ethereum to Binance Smart Chain may require an oracle to verify the transaction details on Ethereum before minting the corresponding token on Binance Smart Chain.
4. External triggers for automated strategies
Some DeFi strategies are triggered based on external conditions. These strategies require real-time world data to operate effectively. For example: a DeFi trading bot might sell an asset when global stock indices fall by a certain percentage. The oracle will provide this external data.
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So what are the important service providers in this oracle track?
💰For us, the most important thing is which powerful parties have not yet issued coins? Please see Xiao Xiong’s summary
- Chainlink - Probably the most famous and widely used oracle network. It has a large number of data providers that can provide various external data
(With LINK tokens)
- Band Protocol
- An efficient oracle platform that uses a token incentive mechanism to reward nodes that provide data
(With BAND tokens)
- Tellor
- A decentralized oracle that uses cryptoeconomics to incentivize miners to provide data to the platform
(with TRB tokens)
- API3
- Move air and ground data providers onto the chain to create a truly decentralized oracle network
(With API3 tokens)
- ONE
- A universal oracle that allows anyone to create custom synthetic assets on the chain
(With UMA tokens)
- Nest Protocol
- A multi-chain oracle focused on providing data to the Polkadot ecosystem
(with NEST tokens)
- DAY
- An open source oracle and data providing platform
(with DIA tokens)
- Provable (formerly Oraclize)
- An early oracle service that uses traditional Web API to provide data
(no tokens)
- Reality Cards
- An oracle that uses NFT to represent the state of the real world
(no tokens)
- Pyth Network
- Oracle focusing on providing financial market data
(with PYTH tokens)
- DOS Network
- A low-cost oracle that uses sharding technology to improve scalability
(With DOS tokens)
Most well-known oracle platforms such as Chainlink, Band, Tellor, etc. have issued their own tokens to support network governance, provide economic incentives and other purposes. But the lack of tokens does not mean poor service quality. There are other factors to consider when choosing an oracle, such as history, adoption rate, security, etc.
💵Touyanlu airdrop idea sharing
Fans, please note that Provable and Reality Cards are among the few oracle service providers that do not have token economics in place. They primarily make money through a fee-for-service model. If one day they update their roadmap and release token economics, they should study it as soon as possible and be ready to rush in!
Happy holidays, I wish you all a happy journey and a happy family!
