DeFi dapps are transforming the finance scape, and there’s a lot that happens in the background. One of such is the inter-communication between blockchains and the outside world. No digital ledger can operate in isolation. The exchange of data is necessary to ensure the actual representation of facts. This is where blockchain oracles come in.
What Are Blockchain Oracles?
Blockchain oracles provide the distributed ledger with the one thing it needs to operate fluidly: data. These oracles rectify and validate data feeds before they are applied on-chain.
With oracles in place, blockchain dapps work in sync using real-time data. This reduces the shenanigans of bad actors.
The Role Of Blockchain Oracles In DeFi?
On the blockchain, real-time data is gotten from multiple sources – on-chain and off-chain. DeFi dapps rely on such data to meet the need of users. All those interactions with smart contracts use data feed availed dapps through oracles.
Without blockchain oracles, the digital ledger can be compared to a closed system – one where information is largely inaccurate and prone to manipulations. To avoid such a situation, DeFi protocols rely on crypto oracles, bringing in real-time data inward.
HALO Oracle is expected to outdo the competition in providing DeFi protocols with accurate data needed to deliver optimal services.
Decentralized Oracle Vs Centralised Oracle: Where HALO Oracle Comes In?
Oracles differ in how they are controlled. There’s the centralized oracle where one entity calls the shot, acting as the only data source for the oracle.
The decentralized oracle has multiple data sources – no one entity controls the oracle’s data input. It reduces the chances of a doomed setup when one of the data sources has been infiltrated.
With most DeFi protocols relying on centralized oracles, the risk of a compromised data source rises. This has informed the need for decentralized options. Of course, this alternative isn’t perfect; issues of inaccurate information have often been highlighted.
HALO Oracle is a centralized oracle that provides DeFi dapps with all the data feed they need. Being centralized, the data source to HALO Oracle is within the control of the HALO Network infrastructure. Will this be a problem? Perhaps not; the blockchain relies on 67% of online nodes to authenticate the data called through the oracle.
How Does HALO Oracle Help DeFi?
With HALO Oracle operating as a centralized oracle, many might question its role in a blockchain that claims to support DeFi dapps. Yet, the crypto oracle is one of HALO Network’s greatest strengths.
HALO Oracle might be centralized, but it doesn’t translate to a weakness. Decentralized oracles are notorious for their loopholes in data accuracy. While multiple data sources to an oracle might be a plus for decentralization, it leaves gaps in the accuracy of data provided. Two heads aren’t always better than one – one might be rotten ruining whatever the other has going for it.
With the centralized mode of operation, HALO Oracle has one data source. The accuracy of the data is put beyond disrepute through decentralization – several online nodes ratify the data from HALO Oracle.
Besides the checks and balances to ensure the validity of data submitted, the use of HALO Oracle reduces the risk of security threats to smart contracts. This means DeFi dapps can operate with lower odds of being exploited – a situation that’s relatively commonplace in that space. With fewer decentralized finance platforms being exposed to the activities of unscrupulous elements, confidence in such dapps will soar.
Another area where HALO Oracle promises to be the shining light for DeFi protocols is in data cost. Decentralized applications expend large chunks of their budget on data from centralized crypto oracles, leaving them struggling for funds to keep developing. On HALO Network, the oracle allows dapps to call data for free whenever the need arises through their smart contracts. It’s such a big deal in a space where data is the oxygen on which most applications live.
Can HALO Oracle Get Compromised?
Due to their role in data sourcing for smart contracts, crypto oracles are a highly sensitive apparatus. If they get compromised, all smart contracts that rely on data from such oracles are affected. This far-reaching effect is one of the reasons why the blockchain community does everything to shield these instruments from harm.
HALO Oracle is an instrument that’s powered by HALO Network’s HPOS consensus algorithm. The consensus mechanism ensures the security of the crypto oracle as it’s part of the infrastructure protected through on-chain HO staking.
Conclusion
HALO Oracle is one crypto oracle that will improve the efficiency of DeFi dapps. Though centralized, the data instrument manages to imbibe some of the tenets of decentralization. All is set for HALO Oracle to support the growth of the DeFi space, we just have to anticipate this auspicious launch.
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