Decentralized Oracle Solutions

Decentralized Oracle Solutions

By CPix | Everything Crypto | 16 Jul 2020


In the world of permissionless blockchains like Ethereum, smart contracts execute in an adversarial environment where safety is only guaranteed by propagating deterministic transactions (transactions that can be verified by all nodes). A smart contract receives an input, executes some logic, then updates the state of the blockchain accordingly. Smart contracts are the life blood of computation on top of 2nd generation blockchains because they can be programmed to execute on given parameters expanding the protocols potential use cases. Typically, smart contract inputs consist of information from the external world requiring some form of trust between the operator and provider so the data put on-chain is indeed correct. This is why a decentralized oracle solution is so necessary for public blockchains.

A couple projects working toward this are Chainlink and Tellor Tributes. In most cases, node operators lock up an ERC-20 token (LINK) which creates an incentive structure for operators to be honest about the data they put on chain. As stated in Julien Thevenard’s Medium article, “An oracle is an entity which signs claims about the state of the world.” Julien foresees 5 key use cases for decentralized oracles; financial products, insurance smart contracts, shipment, collateralized lending and stablecoins, prediction markets. Julien wrote this back in 2019 before most of these concepts came to be, now halfway through 2020 we see the majority of these use cases with on-chain data feeds.

Market Update (Monday 8:30 AM EST)

Percent Change (Rounded) Based on Last Monday Open (8:30 AM EST)

Bitcoin- $9,318 (+1%)

Ether- $244 (+4%)

Gold- $1,805 (+1%)

DJI Average- 26,225 (+4%)

NYSE Composite Index- 12,159 (Flat)

NASDAQ Composite Index- 10,824 (+4%)

S&P500 Index- 3,205 (+3%)

New Developments

  1. Trump’s Former Sanctions Chief Joins Investigation Startup Chainalysis, Forbes

  2. Arca Labs launches Ethereum-based SEC Registered Fund, CoinDesk

  3. Bitfinex must face NY suit over $850 million in lost funds, Bloomberg

  4. Coinbase prepares for landmark stock exchange direct listing, Reuters

  5. NY Court approves Tether investigation, USDT created by Brock Pierce, Forbes

  6. CENTRE blacklists USDC address for first time, The Block

Industry Insights

Blockchain Activity

Selecting an Ethereum Wallet:

Just like in the traditional finance world with money, Ethereum provides a lot of different options for users and holders to store their Ether. Before selecting a wallet someone may want to ask themself a couple questions.

  • Do I want total control and responsibility of my funds?

  • Do I plan to use Web3?

For someone who says yes to both of these questions, Coinbase Wallet (mobile) or Metamask (desktop) may be a useful application. For someone who says no and then yes, Argent Wallet (mobile) may be the best option. Then for those who say no to both options may just want to stick with something like Metal Pay (mobile).

Python Activity

Logistic Regression Classifier:

# import libraries and read in data

from path import Path
import numpy as np
import pandas as pd

from sklearn.model_selection import train_test_split
from sklearn.linear_model import LogisticRegression
from sklearn.metrics import classification_report

data = Path('../Resources/loans.csv')
df = pd.read_csv(data)

# separate features (X) from target (y)

y = df["status"]
X = df.drop(columns="status")

# split and classify the data using sklearn

X_train, X_test, y_train, y_test= train_test_split(X, y, random_state=1, stratify=y)

classifier = LogisticRegression(solver='lbfgs', random_state=1)

# fit the data

classifier.fit(X_train, y_train)

# score the data

print(f"Training Data Score: {classifier.score(X_train, y_train)}")
print(f"Testing Data Score: {classifier.score(X_test, y_test)}")

# make predictions

predictions = classifier.predict(X_test)
results = pd.DataFrame({"Prediction": predictions,
                        "Actual": y_test}).reset_index(drop=True)

# print classification report

print(classification_report(y_test, predictions))

Earn Opportunity

Earning cryptocurrency can come in all shapes and sizes. You can earn Bitcoin for shopping at favorite retailers online using Lolli, learn about blockchain projects and take a short quiz using Coinbase Earn, and writing about a topic others may enjoy using Publish0x. As the space matures, there will only be more and more opportunities for those new to the space to get some skin in the game. The point being, whatever your talent or interests are, find a way to earn cryptocurrency by doing it!


CPix
CPix

I'm a crypto enthusiast who fell down the rabbit hole during my senior year of college and now dedicate my time spreading the word through dApp tutorials, explainer videos, and blog posts. My goal is to speed up mass adoption!


Everything Crypto
Everything Crypto

In this blog I cover major public blockchain developments, cryptocurrency shifting from speculation to utility, and personal opinions as to how the space will develop going forward.

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