A DeFi startup Acala, aims at restructuring the “Oracle” network so that new projects can get data securely from other blockchains.
Let’s recall that DeFi protocols have faced a lot of hacks this year, 2020. The reason behind most of the exploits leading to over $100 million in lost funds was due to Oracle exploits. Now it seems that there have to be improvements in the way projects communicate with Oracle.
Due to all these issues, Acala, a part of the Polkadot ecosystem based in Singapore, is planning to help decentralize the Oracle network. According to their plans, every protocol on Polkadot will be using Acala’s Open Oracle Gateway. The gateway will ensure that off-chain to on-chain communication will be faster and safer.
What are Oracles?
The growing interest in Oracle following the recent hacks in the DeFi project had made it worth exploring.
Oracles are mostly the intermediaries in the decentralized finance ecosystem that makes it trustworthy. They serve as a way of putting real-time information on a blockchain. Without secure oracles, blockchain won’t be secure. One of the reasons behind the successful attacks was because the wrongdoers were exploiting oracles.
Many protocols depended on one source for data, and that’s why hackers could manipulate stablecoin prices in their target protocols.
Now Acala aims at improving on these issues to ensure an inclusive, decentralized, and open Oracle network. There are collaborating with Laminar, Band Protocol, and Acala.
How is Acala improving Oracle?
The first thing Acala aims to do is allowing multiple approved parties on the Open Oracle Gateway to create oracle networks of their own and bring price feeds.
Also, users of Oracle will have the right to select or choose whichever price feed they prefer. Users can also decide to use aggregated feed, thereby combining data from multiple sources instead of one source.
Finally, the price feeds on Acala will be accurate, valid, up-to-date, and refunded using transaction fees. With that, anyone can use Acala’s service.