Original title: Introducing Edge Oracle Network: Oracles Meet Risk Engines
Original author:omer
Original source: https://x.com/
Compiled by: Mars Finance, Eason
Emerging from obscurity:
Edge Oracle Network Today, @chaos_labs launched Edge, our risk-aware decentralized oracle protocol. Edge is already live and serving as the primary oracle for @JupiterExchange, securing over $30B in volume and supporting over 60% of Solana perpetual swap volume in the last two months.
Redefining the Next Generation of $10 Trillion On-Chain Oracles
Over the years, our research in blockchain financial risk and economic security has revealed critical vulnerabilities and weaknesses in existing oracle architectures. Edge represents a left shift in oracle design by integrating risk, security, and real-time market context earlier into the data pipeline. This smart oracle maintains accuracy at p99 accuracy for tail and black swan events - this accuracy is especially important when traditional oracles fail and bankruptcies peak. For DeFi developers, this means the ability to innovate without having to become oracle security experts.
As DeFi scales to over $10 trillion, the focus shifts from pure 99.9% uptime to foolproof accuracy of the 0.1% of events that could break the protocol. Edge’s risk engine goes beyond an API wrapper, integrating real-time security and data integrity to meet the needs of DeFi 2.0. In short, Edge is the oracle we as risk managers wish we had — now a reality for the entire ecosystem.
Oracle Risk: The Silent Killer
Market risk management has always been a major concern for DeFi, but oracle risk has become a silent killer. Early centralized oracles relied on a single data point and therefore had serious vulnerabilities. The Compound incident (manipulating the Coinbase market to provide price information, resulting in millions of dollars in losses) sounded the alarm for the industry.
https://decrypt.co/49657/oracle-exploit-sees-100-million-liquidated-on-compound
This incident has made us realize the need for price redundancy and medianization across multiple data sources.
Oracle 1.0 - Messenger Oracle
The first wave of DeFi development was driven by “messenger oracles” — these are reliable channels between Web2 and blockchain networks, with a focus on network reliability and latency. However, messenger oracles know nothing about the data being transmitted, its broader market context, or how it is consumed. This design flaw shifts the responsibility for data cleansing and quality assurance to consuming applications, creating unexpected challenges for DeFi developers.
Our leadership in risk management for leading DeFi protocols, and our frontline roles in security war rooms, including critical oracle incidents, provide us with unique insight into these evolving challenges. We’ve seen firsthand the gaps and weaknesses in existing systems, especially during market turmoil when data accuracy is critical. This unique perspective enabled us to conceive and create Edge - the next generation of oracle technology designed to directly address these systemic issues.
The Challenges of “Messenger Oracles”
Risk managers must set overly conservative parameters, sacrificing capital efficiency to compensate for oracles that fail to account for advanced risk scenarios.
Application builders are forced to become security/risk experts, diverting attention away from core product development.
Implementing checks and risk engines requires off-chain data and low-latency computation, which is not ideal at the on-chain application layer.
While these oracles are adequate for liquid assets like Bitcoin, they are insufficient in today’s fragmented DeFi environment. The proliferation of L1, L2, LST, LRT, RWA, and cross-chain protocols makes accurate price discovery increasingly complex.
Avi Eisenberg’s attack on Mango Markets exposed key vulnerabilities in oracles. Weak pricing venue standards and the lack of a risk engine similar to price smoothing (for thinly liquid markets) were weaponized, proving that network reliability and simple price reporting are not enough.
The decentralization of liquidity and price discovery in the network makes asset pricing increasingly complex. For leveraged markets, any pricing inaccuracy becomes a potential vulnerability vector.
Our Philosophy
At chaos_labs we believe that risk management is inseparable from Oracles, and that you cannot underwrite asset or market risk without a deep understanding of how Oracles are priced. Conversely, creating a strong, secure Oracle requires understanding the market structure of an asset, the cost of manipulating it, and how applications use data. This realization drove the development of Edge.
Edge Oracle
Edge is architected to provide not only price, but contextual integrity. It understands market dynamics, liquidity fragmentation, and potential manipulation vectors across multiple chains and protocols.
Key features of Edge:
Off-chain and cross-chain data aggregation and analysis
Native risk management and anomaly detection
Low latency and high security design for leverage and derivatives markets
Relieve the burden of price integrity checking from application developers
Edge is designed to meet the needs of modern DeFi applications, where milliseconds and price accuracy can mean the difference between a thriving protocol and a devastating vulnerability. For developers, this means focusing on building user value instead of becoming oracle security experts. Edge handles complex risk models and data validation, allowing teams to innovate with confidence.
Future Outlook
Edge price and risk oracles are live now and are being integrated into leading applications on the EVM and Solana. We are excited to see how developers leverage Edge to create more secure and efficient DeFi protocols.
We've seen significant improvements in execution in the Jupiter community. This real-world validation inspires us to continue pushing the boundaries of what’s possible with oracle technology. Over the next few weeks, we will fully decentralize the Edge Oracle Network. Partners such as @galaxydigital, Nethermind and Blockdaemon will join network participants to further enhance security and reliability.
At Chaos Labs, we believe that robust risk management and reliable, contextually aware data are fundamental to a thriving DeFi ecosystem. Edge is our contribution to this vision.
If you are building DeFi applications and want to leverage the power of Edge, please contact us. Together we can create a more secure, efficient and innovative blockchain financial environment.
