@blackmambaventuresBlack Mamba Ventures
Black Mamba is a venture capital fund for projects with the potential to become the Unicorns
I. Market Context.
In a time when both the Blockchain industry and the DeFi industry are watching the world’s curiosity, there is an urgent need: How to prove the usefulness of Blockchain technology with the whole world.
There are many opinions that, besides Bitcoin, Blockchain has no value at all. Even Bitcoin, its applications are still very limited right now. Currently from the writer’s point of view, the most prominent application of Crypto is Smart Contract. Smart Contract itself will make the process of automation and decentralization easier for industries.
But Smart Contract also has a huge problem: it needs data to function. And not only the data, the data that Smart Contracts need a lot when it comes from outside the Blockchain in which it operates. And to do that, Smart Contract requires Oracles.
II. Concepts and definitions.
Oracles (translated into Vietnamese means prophet), is a software (or sometimes hardware), responsible for receiving and validating data from outside to Blockchain and Smart Contracts, via means information such as API or market data.
If we understand the nature, then we know that Smart Contracts (smart contracts) are computer software systems capable of self-practicing and processing each time a certain condition occurs. Imagine a vending machine, when you put 10,000 VND in, it will give you a can of water. With SmartContract, when you practice 1 action A under existing contract, Smart Contracts will automatically enforce term B stated in contract.
Easier to understand example, there is a smart contract for Trump or Biden will be elected US president. People deposit money into this smart contract to bet who will be the winner. When there are election results, the contract will take the money of the loser to share with the winner. However, how the election results are, Blockchain must be taken from the outside world. And that responsibility will rest with Oracles
By bringing information from the real world into the virtual world, Oracles allows developers to create a variety of smart contracts that can be applied to the blockchain in the real world. If a smart contract needs to know if it rained on Tuesday or not, or what the current gold price is, Oracles will be responsible for showing that information to Blockchain.
And currently, DeFi is one of the waves in need of Oracles the most. To work properly, DeFi needs a lot of data. Applications like derivative / margin DEX exchanges, understanding, trading, all require external data. From volume to price, Blockchain itself cannot “get” that data. If an asset / trading pair on DEX needs to display the price, Oracles will provide price data from the CEX exchanges for it. And many times, the value of Blockchain and Smartcontract depends a lot on the accuracy and timeliness of the data it receives.
For example, when the data is wrong, the smart contract will simply have no value. If the smart contract on presidential election that I just mentioned above fails to update or incorrectly update the person elected to US presidency, many people will lose money unjustly and the consequences will be very severe. As a result, Oracles becomes more and more important to projects. And so, more and more new Oracles projects are born. The table below lists some potential Oracles projects in the current period.
III. Delve into the projects.
1. Chainlink (LINK)
LINK is currently a pioneer in Blockchain Oracles projects. Chainlink is currently the leader, as well as the strongest for 2 simple reasons:
- They were the first to develop Oracles so strongly that most major projects are using Chainlink’s technology.
- Their products are good and reliable.
Over the past 2 years, Chainlink has had a relatively strong development, both in technology and price, so that LINK is currently one of the top 10 Coinmarketcap coins. Currently the most important link partnerships (partners) of LINK can include very reliable names in the market such as Kyber Network, Synthetix, SWIFT, Binance etc … (Readers can read the full list here https://docs.google.com/document/d/1ahUZjuIqqwG9dZLvlm0sgHmckRVUC6kB396narYKSyU/edit)
Binance, for example, is currently using Chainlink to help DeFi applications access the data available on Binance / Binance Chain. With Binance being the most liquid platform in the Crypto world, the price / volume data etc. sent from Binance is highly accurate. On the contrary, Binance will benefit when they will expand their influence across the DeFi realm.
Or as SWIFT, the giant of the payment world, has just announced a partnership with Chainlink in April 2020. SWIFT and LINK have just launched gpi LINK technology, to bring the inherent speed of SWIFT combined with the security of Blockchain. To do this, they desperately need Chainlink technology.
Chainlink’s technology works as follows:
First, their nodes get data from multiple third parties to make a comparison between different data sources. After that, the system will start comparing data sources to remove false / inaccurate data.
Despite being a pioneer, but LINK is also facing a lot of competition from its competitors. This is very common in the Blockchain world, one where technology innovation is happening as fast as ever. This year still in the top 10, next year out of the top is normal. And one of the most prominent competitors of LINK this year is BAND – The project has an extremely impressive growth in 2020: more than 9000%.
If you still need to read more about Chainlink’s technology, you can read more at Blackmamba Research
2. Band Protocol.
Since the majority of Oracles projects are currently active on Ethereum, Band Protocol runs on Cosmos – the Internet Blockchain. Band describes itself as a cross-platform, capable of connecting data from the real world into smart contracts.
Because of this possibility, BAND is one of the strongest growth projects in 2020, with an increase of nearly 100 times. The reason is simple because DeFi’s growth needs crosschain data, and BAND gives DeFi projects that. While Chainlink is hitting the market of top Coinmarketcap blockchain projects like ETH, BAND is built on Cosmos to access smaller blockchains, making it easier for blockchains to link together.
However, one of the things that Band and the Tendermint technology on Cosmos have to trade in is that it does not require or allow communications from Oracles to “communicate” with the protocol. Instead, the information and data on BAND’s Oracles will automatically be deemed correct, and will be re-audited later.
This happened because BAND had taken the step of the data check, in order to boost the speed of his Oracles. In the long term, this is not good, and the BAND team understands it very well. That is why they will make corrections in the future.
we still provide you with an overview and detailed article about the technical properties of Band Protocol here
In general, BAND is one of the projects that are competing fiercely with Chainlink to reach the CMC top 10. However, it is not that there are other projects trying to do the same thing. Nest Protocol is an example.
3. Nest Protocol (NEST)
Nest calls itself the first Oracles network that produces and verifies price data on-chain. A special feature of NEST is that it focuses on the price data array, and NEST serves the goal of putting price data on DEX in the fastest and most accurate way.
In the projects I mentioned in this article, Nest is currently the youngest project, so it is not paid much attention by everyone in the Crypto world. However, NEST is currently attracting a lot of attention from the Oracles market. Nest’s strength is that it has good technology, backed up by a relatively talented team, and its decentralization is also relatively high.
Basically, the idea of the project is quite crazy and Nest is also a partner of HBTC – a Crypto exchange of former CTO Huobi. Perhaps that is why Nest operates strongly mainly in China. In the future, Nest will be one of the quite formidable competitors if they decide to move into the Global market.
Blackmamba Research will have an analysis of the technical of Nest in the coming time.
4. Tellor (TRB).
Tellor is a project that aspires to be the standard of high value data for dApps (decentralized applications). More specifically, Tellor aims to provide quality pricing data for DeFi projects. As a part of Tellor’s network, users will receive TRB tokens as rewards.
In terms of tokenomics, I rate TRB the highest among the tokens included in this article. Users can stake and mine on TRB’s PoW mechanism in order to receive TRB tokens.
Therefore, TRB has been sponsored by a relatively many Blockchain investment organizations / funds. From Binance Finance Labs to MakerDao and Concensus, it’s all on the list of institutions that have invested in TRB.
Built on ETH’s Blockchain, the decentralization of TRB is relatively high. Even their governance is a Decentralized governance mechanism, with they canceled the admin key last October, giving governance to the community.https://medium.com/tellor/goodbye-admin-key-hello-decentralized-governance-6e4f7ca969a5
BMV Research will have an analysis of the Tellor article in the near future.
DIA, which stands for Decentralized Information Asset is a project focused on providing diversified information to the DeFi world. They aim for the following standards: precise, easy to censor, and decentralized. And since its focus on DeFi, of course, the DIA has attracted a lot of attention from investors this year.
However, the interesting thing about DIA is that, this project has promptly launched products aimed at traditional financial markets, more specifically, the bank’s FX and lending rate. In the long term, DIA plans to become a data delivery platform for both centralized and decentralized finance circles.
DIA’s fundamental difference from the above projects is that this project focuses on sharing financial data with the Blockchain world, and includes valuable data / information as well as needs protection. high honey.
BMV will soon have research on DIA in the near future.
Although Chainlink is a pioneer, LINK is also facing a lot of challenges in the Blockchain world. And although there are many similarities, but the interesting thing of the Oracles projects that I listed above is that most of them have their own points, target a certain gap that LINK has not yet targeted.
For example, we have BAND built on the Cosmos Blockchain, or NEST specifically aimed at the Chinese market, which has always liked domestic products.
In general, most future Oracle projects aim to build Transparency (transparency) and Decentralization, as well as use in DeFi, which will be an indispensable goal of Oracle projects. Future. With Oracle growing, in my opinion, DeFi will thrive in the future as data from traditional financial markets will be incorporated into DeFi, and the financial revolution looks like it. like every day 1 closer.
And of course, the pie is still very large, so there will be many interesting and potential Oracle projects in the future. This article will also be updated regularly according to the market rhythm, so please bookmark it and follow the BMV channels to not miss the next information about the Crypto market!
Previously published at https://research.blackmamba.ventures/vi/bao-cao/oracles-ke-dan-duong-cua-the-gioi-crypto
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