The impact of blockchain has been overwhelming over the last decade, altering the “central Authority” system the world is used to. The hallmarks of blockchain technology are full decentralization, transparency and a trustless system. In order for a blockchain transaction to be executed, there must be no outside influence or third party. When a third party is involved in a blockchain transaction, the decentralized technology's fundamental principle and purpose are undermined. 

According to Investopedia, Smart contracts permit trusted transactions and agreements to be carried out among disparate, anonymous parties without the need for a central authority, legal system, or external enforcement mechanism. Smart contracts aids in automating the transactions carried out on a blockchain so that every stakeholder involved would be sure that every activity is carried out transparently and seamlessly.

Even with smart contracts, external real-time off-chain data is still required for transactions to be completed. Oracles come into play when there is a requirement for real-time off-chain data; they assist smart contracts in evaluating real-time market data and validating off-chain data input.

Oracles can collect many forms of information; once the smart contract receives the input, it acts on it. The critical problem with the existing Oracle structure is that it compromises the entire premise of a "no Intermediary" system because oracles can affect transactions as a result of the sensitive market information they supply to smart contracts. Several projects have tried and failed to meet the task of developing a new economic model that will make Oracle more transparent and trustworthy.

QED is a decentralized Oracle protocol and aggregator that aims to make Oracles transparent and trustworthy through its robust economic model. QED seeks to establish a "trustless" system by collecting data points from diverse sources and therefore decentralizing Oracles. The QED ecosystem is built on the DelphiOracle software, the most popular Oracle on WAX-io, with over 1400 activities per hour. DelphiOracle has been in operation for nearly four years, surviving the ups and downs of the blockchain and DeFi sectors.

The Robust Economic Model of QED Protocol

On September 20, 2021, the Pyth Network failed and displayed the Bitcoin price as $5,402, even though the price reported by other sources was not less than $40,000. Before that incident, on September 15th, Pyth's price feed for AMC's stock showed a spike to $772 when other sources, such as Yahoo Finance, did not show AMC's price rising higher than $50 on those days. Furthermore, on March 16, 2020, the popular MakerDAO oracle displayed incorrect prices for several hours due to a system glitch. Despite these 'incidents,' the QED base software, DelphiOracle, maintained accurate prices. The ability of DelphiOracle to maintain correct prices indicates that QED has built its protocol on a solid, secure, and well-established technology.

The QED ecosystem created a robust economic model by issuing QED tokens to the protocol's oracles, enabling them to manage a decentralized governance system and own a share of the platform. QED gathers real-time market data from a variety of sources to deliver reliable information on the platform. The QED protocol is structured so that Oracles are only allowed to assess the costs associated with transaction execution. The full decentralization of the QED protocol aims to eliminate collusion in the ecosystem. In addition, the QED protocol provides dynamic incentives to oracles for reliable data provided to improve market information quality. The QED model was created to enable a tamper-proof oracle system that offers credible and updated market data.

Final Thoughts

The QED protocol has set itself apart from other oracle protocols in the market today with its game-changing economic Model. The protocol aims to set a new standard for how viable and seamless oracle protocols should be. The use of the fast and scalable UX Network as home to the QED protocol has helped position the ecosystem as an innovative protocol solving oracles’ drawbacks. The purpose of QED’s economic model is to create a new system whereby only reliable and updated data would be made available to DeFi platforms.