What are the application scenarios of oracle machines? What about oracles?

php editor Strawberry will take you to deeply explore the application scenarios and functional characteristics of the oracle machine. As an important component of blockchain technology, oracles are widely used in decentralized finance, prediction markets, gaming industries and other fields. It provides a reliable external data source for the blockchain network through data verification and contract execution, ensuring the reliability and security of smart contracts. The emergence of oracles has greatly enriched the possibilities of blockchain applications and brought new opportunities and challenges to the development of blockchain technology.

What are the application scenarios of oracles?

Currently, the application areas of oracles in blockchain include stablecoins, lending, financial derivatives, insurance and prediction markets. Stablecoins and lending are popular application scenarios that are currently attracting much attention.

Crypto-asset stablecoin is a digital asset based on cryptocurrency mortgage. Unlike traditional one-to-one stablecoins, they peg their price to fiat currencies by maintaining a higher ratio between collateralized assets and stablecoins. For example, DAI and bitUSD adopt this model. DAI is issued via overcollateralized crypto assets such as Ethereum. Crypto-asset stablecoins need to interact with off-chain information, so oracles are needed to obtain real-time data on the stable currency itself and the exchange rate of anchored assets from the outside world.

Decentralized P2P lending platforms such as SALTLending and ETHlend provide anonymous users with a way to borrow fiat currencies or other crypto assets using blockchain crypto assets as collateral. These platforms rely on oracles to provide price data at the time of loan generation and monitor margin ratios for crypto-asset collateral to issue warnings and initiate liquidation procedures when margins are insufficient. In addition, these lending platforms can also use Oracles to introduce borrowers’ social, credit and identity information to determine different borrowing rates. This approach can help the platform assess risks more accurately and ensure the security and transparency of lending transactions.

How about the oracle?

In any case, the oracle market cannot get rid of its dependence on a few authoritative information sources. However, this dependence can be minimized by employing strategies of procedural justice, post hoc accountability, and distributed fault tolerance.

At present, the solutions of each oracle project have their own advantages and disadvantages. In the short term, although Oraclize is a centralized project, it has strong applicability and users can randomly obtain customized information. Augur, on the other hand, is simple and practical, and has good performance in predicting market direction, but it requires manual voting, which may result in slower speed. Each project has its own unique functions and characteristics, and users need to choose a suitable oracle project based on their own needs and preferences. When considering investment or use, it is also necessary to comprehensively consider the safety, reliability and future development prospects of the project to ensure that the most suitable solution is selected.

In the long-term consideration, the two choices of decentralized oracle networks, Chainlink and DOS Network, and the comparison of multiple information sources will ensure greater security and reliability in terms of architecture.

In blockchain technology, oracles play an important role in connecting smart contracts on the chain with external data sources. Due to the decentralized nature of the blockchain, ensuring that the processing results for the same input on each node are consistent is critical to verifying the validity of transactions. Therefore, the role of the oracle is to introduce off-chain data into the blockchain so that smart contracts can obtain and process this data. The design intention of the oracle is to ensure that the blockchain network can obtain the input of external data, so that the smart contract can perform corresponding operations based on this data. Through the intervention of oracles, the blockchain can obtain verification and information of off-chain data, ensuring that the blockchain network contains all the information needed to verify itself. The design of this architecture makes the blockchain system more robust and reliable, while also improving the functionality and application scope of smart contracts. In general, the role of the blockchain oracle is to establish a bridge between the blockchain and external data sources to ensure that smart contracts on the chain can obtain and process external data, thereby achieving more complex and diverse application scenarios. The introduction of oracles brings more flexibility and functionality to the blockchain system, and provides important support for the development and application of blockchain technology.

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