Crypto Oracle projects are back and on the rise in 2024. What are the best-decentralized oracle projects in crypto? Below is a snapshot so far!
With the invention of blockchain technology, smart contracts, and NFTs, the digital age keeps us moving forward toward a decentralized future. At this point, in time we can say that after roughly a decade of cryptocurrencies and blockchains, they are here to stay.
On top of that, the internet seems to be moving to a decentralized variant called Web3. All this innovation is exciting and confusing at the same time. So, what has been achieved so far in the blockchain space?
First of all, we have traditional trading platforms like Binance or Coinbase which are centralized(CEX). Additionally, there are decentralized platforms(DeFi) like Uniswap or Pancakeswap, and many more. Also, I want to mention several crypto lending platforms like Nexo, Youhodler(CeFi), or Compound and Aave(DeFi) as well.
The big crux here is that all these platforms rely on data that doesn’t exist on the blockchain. This means the data delivered to these platforms and smart contracts are delivered by data oracles. In fact, these oracles function as bridges to get real-world and real-time data on-chain.
What is a Decentralized Oracle?
To explain a decentralized oracle best, we first must understand what the problem actually is. A decentralized blockchain network like Ethereum uses smart contracts to handle transactions. In addition, these contracts are executed autonomously in a decentralized way and without a third party interfering in the process.
Unfortunately, the data being delivered to the smart contracts comes from centralized parties and isn’t trustless and decentralized. Therefore, to be able to act on reliable data, decentralized oracles make sure that data requests are decentralized as well.
In other words, decentralized oracles make sure that the external data being delivered to smart contracts remains decentralized and can’t be manipulated by third parties.
To summarize, there is a growing demand for data and decentralized solutions in 2022 and beyond. As a result, it will be no surprise that decentralized oracle projects will play a major role in the growing cryptocurrency markets.
Top 8 Best Decentralized Oracle Projects(2024)
- Chainlink(Best performing project on Ethereum)
- Pyth Network(Fastest riser of 2023)
- UMA(Best DeFi project on Ethereum)
- WINkLink(Best performing project on TRON blockchain)
- API3(Best oracle project for APIs)
- iExec RLC(Oracle project for cloud computing)
- XYO(Specializes in Reality Data(Metaverse))
- Augur(Oracle project in prediction markets)
The majority of the projects mentioned above are very young, growing fast, and very unknown in crypto. Also, to acquire these tokens it’s best to buy them at Binance or Kucoin. Specifically, these crypto exchanges have high volumes in the order books, making sure you can buy or sell these ‘alt gems‘ quickly.
Are Oracles Decentralized in Crypto?
As explained earlier, a blockchain oracle is any device or entity that connects a deterministic blockchain with off-chain data. These oracles enter every data input through an external transaction.
This way, we can be sure that the blockchain itself contains all of the information required to verify itself. This is why oracles are known as blockchain middleware: They are the bridge between the two worlds.
But are these oracles really decentralized or autonomous? Technically, each oracle is a node in a distributed computer network. Also, all these nodes run exactly the same Oracle software, and based upon this configuration they are decentralized.
Particularly, every single node runs independently and receives data from an off-chain source and brings it on-chain. Additionally, the decentralized smart contracts aggregate the data and come with a deterministic value of truth for this data point.
Best Decentralized Oracle Projects
Below are the most promising decentralized oracle projects at the time of writing. To clarify, I want to mention that this is just a snapshot as things in crypto and Web3 are moving very fast.
Chainlink is one of the first oracle networks to allow the integration of off-chain data into smart contracts(Ethereum). With many trusted partners, Chainlink is one of the major players in the data processing field in the blockchain and DeFi era. Additionally, many data providers can sell access to data directly to Chainlink, thus monetizing the information they have.
For example, the decentralized oracles of Chainlink are providing data for leading DeFi applications like Synthetix, Aave, Compound, and more.
All in all, the ecosystem of Chainlink currently accesses over 1B data points, securing over $75B in value. All this through 1,000 project integrations with 700 Oracle networks. There is growing interest from mainstream organizations.
Good examples are AccuWeather, FedEx, FlightStats, and the Associated Press, which have partnered with Chainlink for data verification.
For 2024 and beyond, there will be the implementation of crypto staking in its network. With staking and locking coins, LINK holders are securing the network and earn rewards for this. In particular, crypto staking isn’t easy to implement and it took years for the team to build this. To point out, decentralized oracles aren’t on a blockchain but a form of decentralized computing.
Imagine a network of trusted people constantly watching stock prices and reporting them back to a central computer. That’s kind of what Pyth Network does but for cryptocurrencies. It’s a system that provides real-time price data for cryptocurrencies to other blockchains. This means that developers can use Pyth Network to build smart contracts that react to price changes, like automatically selling your crypto if the price drops too low.
Finally, Pyth Network(PYTH) has been growing quickly in 2023 because it’s a reliable and accurate source of data that’s easy to use. It’s also helped to make decentralized finance (DeFi) applications more secure and efficient.
Universal Market Acces(UMA)
In terms of total market cap, UMA is the third decentralized oracle project out there. Specifically, this project is currently valued at $250 million and is about 10x smaller than the Chainlink project.
Nevertheless, this is a young and promising oracle project mainly focused on the DeFi space. DeFi is a young and fast-growing sector within crypto that already has grown to $50 billion in value.
The UMA project is trying to solve the high barriers and bureaucracy in the traditional finance markets.
As most financial and derivatives markets are locally organized it’s very hard for the smaller participants to join.
UMA contracts, on the other hand, are based on Ethereum’s blockchain, whose permissionless nature allows any user to create, run, and trade digitized derivatives. To do this you only need a crypto wallet and can start from anywhere in the world.
This accessibility is especially important to achieve a truly global DeFi system where anyone can join. This is no matter where you are in the world.
All in all, by developing a protocol for the creation of synthetic assets and financial contracts on the blockchain, they are on the way to achieving this.
The WINkLink team has developed a fully decentralized oracle network for the TRON blockchain community. The TRON blockchain is one of the biggest networks in the world currently valued at $6 billion. On top of that TRON has a 24-hour trading volume of roughly $400 million and is a big player in the space.
To make the TRON ecosystem even grow more, the WINKkLink decentralized oracles will provide reliable, unpredictable, and verifiable random data. All this is to fully restore trust and improve user experience by tapping into data, events, and payment systems from the real world.
The TRON blockchain uses TRON-based TRC20 tokens, which act similarly to the ERC20 tokens on Ethereum. They also use these for governance and on-chain transactions.
Another top decentralized oracle project is API3.In the traditional web environment, we have several API providers who deliver data to external systems mostly without any human interference.
This works fine, however, in the decentralized world(Ethereum) they aren’t really accessible. To solve this there is the API3 project.
With the rise of blockchain technology, data from finance and supply chain systems needs to be accessed as well. With the decentralized oracles of the API3 team, there will be nodes available that can manage and monetize these data.
Particularly, light and robust middleware nodes called Airnode have been created to make API3 a reality. Also, the distinctive qualities of this tool concern how it can be deployed in minutes, enhancing transparency and substantially reducing transaction fees in the process.
Exec is a crypto project that has a background history in desktop grid computing. This means, that this project comes from the cloud computing, AI, and Big data world and is now focussing on blockchain technology.
Particularly, Exec is the leading provider of blockchain-based decentralized computing. Blockchain is utilized to organize a market network where people can monetize their computing power as well as applications and even datasets.
To achieve this they use their resources in the fields of big data, healthcare, AI, rendering, and fintech. All this is to create decentralized oracles to make sure the data stays decentralized when meeting the blockchain.
Finally, the RLC token operates on the Ethereum blockchain and can easily be stored, transferred, traded, and divided as well as used to make transactions.
XYO is a technology protocol designed to improve the validity, certainty, and value of data. Particularly, they are building a data marketplace that gives users a gold standard for any apps, websites, and blockchain technologies that rely on trusted data.
Talking about decentralized oracles, they are building the world’s first Reality Oracle. This new type of oracle is the bridge between secure blockchain data and our physical world. XYO improves the certainty & trust for data and ensures people rightfully own the data they create. In the end, they are building the technology needed for a fully data-driven world.
The last in the list of best-decentralized oracle projects is Augur. Augur (REP) is meant to harness the wisdom of the crowd through prediction markets. Meaning it’s on a protocol owned and operated by holders of the Ethereum-based Reputation token. In these markets, users are said to be able to bet on the outcomes of events. For example, the performance of companies, election results, or even natural phenomena.
Using Augur means that you can purchase shares that would either support or refute the proposed outcomes of such specified events. By design, the user-created markets could return fees to market participants while automating payouts. Using software meant to be fair, open to all, and completely decentralized.
You’ve already guessed it but the data used for these kinds of platforms are being managed by decentralized oracles. As Augur is a blockchain-based platform they want to handle transactions in the most reliable and decentralized way.
Recommended: 8 ‘New’ most promising coins on Binance for 2024
With the introduction of decentralized oracles, the entire blockchain space moves more and more towards a fully decentralized digital world. In this world, the oracles are playing the main part in handling real-world data between smart contracts. It may all sound a little bit complicated but in my opinion, it’s just a new virtual layer for data delivery.
In summary, blockchain oracles are the key to unlocking the future that smart contracts have for us. For smart contracts to be the superior form of agreement, we need to have access to diverse and reliable data.
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