Binance Oracle was officially launched last Wednesday, and since then, Binance, the world's largest exchange, has also had a native oracle service. The so-called oracle refers to sending data from the outside world (such as daily temperature or sports scores) to blockchains such as Ethereum and BSC. Then, smart contracts on the blockchain can use this data to decide whether to allocate funds and to whom.
Therefore, blockchain oracles can be seen as a bridge between blockchain and the real world, allowing data from the real world to enter the blockchain. At the same time, they can also be used to send data to the real world.
As blockchain technology continues to evolve, the role of oracles in the blockchain ecosystem is becoming increasingly important. Therefore, in a sense, Binance Oracle was born in the best era. It will also provide smart contracts with more reliable, secure, and accurate data procurement solutions.
Binance Oracle: An oracle service built specifically for the BNB chain
Binance Oracle is designed to facilitate the execution of smart contracts that require off-chain data input. In a sense, it is built specifically to meet the needs of DeFi applications, which can reliably and securely provide data to the blockchain.
The current Binance Oracle is an oracle service built specifically for the BNB chain. All projects built on the BNB chain can use the services it provides, and it will continue to expand to other chains in the future.
At present, the emergence of Binance Oracle has indeed brought many positive impacts to the BNB ecosystem.
First, having a native blockchain oracle enhances the credibility of BNB blockchain data.
Second, more reliable data will open up entirely new possibilities for existing and new projects in the BNB ecosystem.
Finally, Binance Oracle can attract developers to join the BNB Chain ecosystem. Developers can connect their projects based on the BNB chain to off-chain data, thus avoiding the trouble and risks of maintaining existing data, finding new data sources, and using unreliable data.
The main function of Binance Oracle is to provide developers with digital asset indices and prices. Therefore, it will rely on a combination of 5 major components:
1. Get price data from numerous CEXs and aggregate them using a proprietary formula.
2. Sign a single data feed using the internal TSS (Threshold Signature Scheme).
3. Provide the latest index price to the on-chain oracle using flexible time windows and price deviations.
4. Provide an easy-to-use interface for on-chain DApps.
5. Provide 24/7 monitoring and instant response.
How it works
Binance Oracle screens and aggregates numerous data sources to ensure the accuracy of information and the reliability of its sources. For example, Binance Oracle obtains price data from multiple centralized exchanges and decentralized financial applications and aggregates the data using a weighted average formula.
Specifically, the operation of Binance Oracle can be roughly divided into three major processes:
1. Data processing and signing
Binance Oracle has data processing and signing capabilities, which are designed to prevent data from being tampered with arbitrarily. It establishes a distributed signature system called a threshold signature scheme to sign the latest data from different sources. This means that anyone holding a public key can verify the accuracy and authenticity of the digital signature, and people without a private key cannot change the data anyway.
2. Data Release
Data can be published on the blockchain through multi-nodes that only publish signed information. The smart contracts that store data are also secure and audited, and multi-nodes can adjust the frequency of data release according to different market conditions. Even during periods of drastic price fluctuations, Binance Oracle will still be able to obtain relatively accurate data. This means that even in the most extreme scenarios, multi-nodes can guarantee the reliability of data release to a certain extent.
3. Data monitoring
The data on Binance Oracle can be kept up to date in real time through an independent monitoring service that works 24 hours a day, 7 days a week. It can fetch prices from different data sources and compare them with published blockchain data. If significant deviations are detected, the Binance Oracle team will intervene manually.
advantage analysis
1. Strong security
One of the advantages of Binance Oracle is its threshold signature scheme, which is applied to the entire process of distributed signature, thereby eliminating single point failures and ensuring the data security of the ecosystem. At the same time, the authenticity of the data will also be continuously verified by the Binance public key, thus ensuring that the data cannot be tampered with during the chain process.
2. High Availability
Another major advantage of Binance Oracle is its high availability.
First of all, Binance Oracle's data is carefully selected from multiple top exchanges, and the accuracy of the index and price is ensured by intelligent algorithms. This means that users will be able to access relatively reliable resources in real time.
At the same time, the component architecture of Binance Oracle also ensures that the system can continue to provide data in any extreme scenario. The complete infrastructure of Binance Oracle will be deployed in each region, designed to be immune to regional outages and disasters.
Currently, Binance Oracle has included dozens of BNB chain projects in its early bird program, including Venus, Alpaca, SpaceID, Unilend, Deri, Ankr, Corite, Ultiverse and Beefy, etc. It hopes to attract more Web3 teams and users by adding flexible customized services.
Conclusion
The importance of oracles to blockchain is self-evident. Although blockchain oracles cannot solve the data availability problem, they can provide available off-chain data to the chain by using external resources, which in a sense can be regarded as a roundabout way to save the country.
Without oracles, the potential of blockchains and the likelihood of mass adoption will undoubtedly become smaller as their information will be limited to internal data.
To some extent, the launch of Binance Oracle is a milestone for Binance, which means that Binance's ecosystem is becoming more complete and self-sufficient. With the lessons learned from the past and R&D funds not being constrained, the actual quality and completion of Binance Oracle are worth looking forward to.
But this does not mean that there are no problems with this product.
First of all, the most intuitive point is that Binance Oracle is still too young. Even if the technical documents and promotional documents sound good, practical problems cannot be avoided. Therefore, I am still on the sidelines.
Secondly, the main function of an oracle is to feed data, so the trust of the data source is fundamental to it. Currently, researchers are exploring various methods to alleviate this problem.