E&S: Chainlink, the crypto oracle

Hello Publish0x community and welcome back in my Sunday article dedicated to the “Easy and Short. Cryptocurriencies made accessible” section.
Have you missed the introductive article of Chainlink? Don’t worry you can recover it here.
We know that Chainlink is a decentralized oracle network built on the Ethereum network, founded by CEO Sergey Nazarov.
The Chainlink network has made a name for itself by providing reliable tamper-proof data for complex smart contracts on any blockchain.
Chainlink was born, enabling smart contracts to connect to data feeds from any data source or API. This was a game-changer for the blockchain industry.
After raising $32 million in an ICO, the Chainlink mainnet went live in June 2019. The Chainlink project has become a pillar in the oracle space, and a must-have for all credible DeFi projects.
One of the core features are Chainlink Smart Contracts.
Any blockchain that is smart-contract-enabled can request data using the Chainlink Requesting Contract. Known as an event, this is then registered by the Chainlink network and creates a Chainlink Service Level Agreement Contract (SLA), which allows users to access off-chain data.
Image source: Chainlink
The SLA contract has three sub-contracts:

Chainlink Reputation Contract that tracks the performance of a node and authenticity of data, looking for suspicious actors or suspicious nodes.

Chainlink Order-Matching Contract that sends data requests to nodes to be used in smart contracts and allocates appropriate nodes for different tasks.

Chainlink Aggregating Contract that collates, validates, and reconciles any data requests, and translates data for communication between parties using the Chainlink Core software. This data can then be sent to an API and sent back to the Chainlink Aggregating Smart Contract.

Then I want to focus a little bit on the Validation System.
The ChainLink Validation System monitors on-chain oracle behavior, providing an objective performance metric that can guide user selection of oracles. It will seek to monitor oracles for:

Availability: Validation System should record failures by an oracle to respond in a timely way to queries. It will compile ongoing uptime statistics.

Correctness: The Validation System should record apparent erroneous responses by an oracle as measured by deviations from responses provided by peers.

In our initial, on-chain aggregation system in ChainLink, such monitoring is straightforward, as all oracle activity is visible to CHAINLINK-SC. Recall, however, that in the off-chain aggregation system envisaged for ChainLink, it’s the oracles themselves that perform aggregation. Consequently, CHAINLINK-SC does not have direct visibility into oracle responses and cannot itself monitor availability and correctness.
Fortunately, oracles digitally sign their responses, and thus, as a side effect, generate non-repudiable evidence of their answers. The proposed approach will therefore be to realize the validation service as a smart contract that would reward oracles for submitting evidence of deviating responses. In other words, oracles would be incentivized to report apparently erroneous behavior. Availability is somewhat trickier to monitor, as oracles of course don’t sign their failures to respond.
Instead, a proposed protocol enhancement would require oracles to digitally sign attestations to the set of responses they have received from other oracles. The validation contract would then accept (and again reward) submission of sets of attestations that demonstrate consistent non-responsiveness by an underperforming oracle to its peers. In both the on-chain and off-chain cases, availability and correctness statistics for oracles will be visible on-chain. Users / developers will thus be able to view them in real time through an appropriate front end, such as a Dapp in Ethereum or an equivalent application for a permissioned blockchain.
There has been a steady stream of Chainlink integrations this year, including partnerships with the biggest names in DeFi, as well as integrations with Microsoft and IBM.
Chainlink is changing the financial landscape by reimagining how financial contracts work, with a decentralized oracle network pushing towards the fourth industrial revolution.
Now, I have a great news for you!
Next Sunday I’ll start a special month of this section dedicated to Binance! 5 weeks, 5 amazing articles with a lot of tips and video tutorial dedicated.
You can recover my Youtube channel here, and be sure to watch my next video updates.
I am not going to wait you. You are going to miss it

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MikeZillo Verified Member

Daily Trader, Mining Farm Project Manager, Blockchain consultant, Cryptocurrency evangelist. You can find more videos here Telegram: @mikezillo

Easy&Short. Cryptocurrencies made accessible
Easy&Short. Cryptocurrencies made accessible

In this section, we are going to create two article per each cryptocurrency/token. The first one will be technical, with a simplification of the Whitepaper and the second one will be about particulars of the coin. For example staking yields, particular functions and so on! I am sure you will like this very much!

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