A decentralized finance startup is hoping to restructure the oracle network, helping new projects get their data safely from a number of blockchains.
After a number of attacks on DeFi protocols lost over $100 million thanks to Oracle exploits, the way projects interact with Oracles is more important than ever.
The idea is that the protocols built on Polkadot will use Acala’s Open Oracle Gateway — a system to speed up and safen the process of moving information off-chain to on-chain.
What’s an Oracle, Exactly?
Oracles are talked about in the DeFi world — a lot. Especially with hacks occurring recently.
But what is an Oracle? Oracle is simply a take off-chain data made usable on a blockchain (on-chain). They ensure trust in the DeFi system and are usually used to take real-time price information and put it on a blockchain.
Why’s This Important?
Secure oracles are necessary for blockchain security. The $100 million lost in recent hacks was down to attackers exploiting oracles because protocols were getting their data from just one source — and the price of stablecoins held in the protocols was then manipulated.
Acala’s project wants to improve on this — specifically in the Polkadot ecosystem — so that an open, inclusive, and decentralized Oracle network can be available to all.
What Will Acala Do, Exactly?
A number of things. Firstly, the Open Oracle Gateway will allow multiple parties — as long as they’re approved — to create their own oracle networks and provide price feeds.
Secondly, those using the service will be able to pick and choose the price feeds they want to use. They can also choose an aggregated feed combining data (something that has been recommended as getting data from a single source compromises security.)
And lastly, all price feeds posting to Acala will be up-to-date, valid and refunded with transaction fees incurred — making them essentially free to anyone using Acala’s service.