Top Blockchain Oracles: Chainlink, Band and More
|— Blockchain Oracles are services that are used to securely supply reliable data from the real world to smart contracts.|
— Chainlink and Band Protocol are the two of the top blockchain oracle services—both were founded in 2017.
— There are several other blockchain oracles that are useful to know for specific purposes.
When you think of the word oracle, what comes to mind? An ancient soothsayer draped in silk that provides counsel to the kings and queens of old? Or maybe simply a person with great wisdom to share?
Well, when it comes to cryptocurrencies and blockchains, these descriptions aren’t too far from fact—albeit a bit less dramatic. Without oracles, many smart contracts simply couldn’t function. To begin with Information from oracles is currently used in a massive range of applications, many of which fit squarely into the decentralized finance (DeFi) niche. Plus some NFT artworks even use oracles, with the image changing due to real-world events. But before we dig into some examples of projects using top blockchain oracles, let’s start with the basics.
What Blockchain Oracles Are: A Recap
In essence, blockchain oracles can take information from a data source and communicate it to the blockchain and vice versa. The data and their source can be practically anything of interest, such as the price of certain goods or commodities, temperature data from a weather sensor, election results, and more. The smart contracts that request and receive this data can then use it to carry out their function.
It also works the other way around. Oracles can also take information from a blockchain and securely send it to external applications, allowing individuals and businesses to safely and reliably access blockchain data if needed. To learn the details of how that works, check out the full article on what a blockchain oracle is.
But this article will focus on some of the most popular examples of blockchain oracles in use today. So, if you’ve ever wondered how to connect data from the real world to the blockchain and back, you’re about to find out. Let’s explore some of the top blockchain oracles you should know today.
Top Blockchain Oracles: Which Is Best?
The best blockchain oracle depends entirely on what you want it for. However, if you want to get started, a great way is by experimenting with some of the blockchain industry’s most popular oracles:
Chainlink Oracle: The Top Most Popular Oracle
Recognizing the need for reliable data inputs and outputs for smart contracts, Chainlink was the first major oracle network to launch. It’s an open-source project and it’s also the most widely used oracle platform, with Chainlink oracles now being used by hundreds of projects on the Ethereum network. For example, huge DeFi projects and marketplaces such as Synthetix, Aave and ENS, all use Chainlink’s oracle. Chainlink has its own LINK token. This is a specific extension of an ERC-20 token called an ERC-677 token and it’s with this token that operators are paid.
Band Protocol: The Second Biggest Oracle
Next, Band Protocol, is the second-largest player in the decentralized oracle space. It was also founded in 2017 but didn’t launch version 1.0 of its data oracle platform until September 2019. Since then, it has also seen great success. While it originally launched on Ethereum, it now runs on Cosmos. That’s because Cosmos helps Band Protocol keep costs down when sending or receiving data.
Like Chainlink, it aims to provide high quality, tamperproof data to smart contracts by. It also positions itself as a cheaper, faster, and easier to use platform. It also has its own token BAND, which it pays out to operators of the system.
Augur: Oracles for Prediction Markets
Augur is a decentralized prediction market platform that uses its own decentralized and trustless oracle service. In short, its users can create prediction markets for any event ranging from the weather to election outcomes. But the smart contract needs reliable data to finalize the outcome of every prediction market. Augur oracles offer a data source for smart contracts that is free of any centralized intermediaries.
Pyth Network: Oracle Platform Across 13 Blockchains
Pyth Network is a decentralized oracle platform compatible with 13 blockchains. It provides real-time data for financial markets and asset classes like U.S. equities, commodities, and cryptocurrencies. Pyth sources its data from a network of almost 70 data publishers, including some of the largest exchanges and market-making entities globally.
Choosing a Blockchain Oracle: Which is best?
Choosing a blockchain oracle depends on the type of data you need. But this technology has a range of interesting use cases, including Decentralized Finance (DeFi), creating interactive price feeds and even synthetic assets, or crypto derivatives. Oracles are quickly becoming a cornerstone technology for the blockchain industry, so odds are we have only scraped the surface when it comes to seeing their true potential and utility.
Plus, operating an oracle or being a data provider can be a profitable business since they earn crypto tokens for providing their services. These tokens have value and can be easily swapped for other cryptocurrencies and regular cash.
Accordingly, if you do want to interact with any blockchain oracle, a good option is Chainlink. This is because Ledger Live supports LINK, meaning you can buy and secure it with your Ledger device. That means, whenever you’re interacting with blockchain oracles, you can rest assured your tokens stay safe.