Key Concepts

Blockchain Oracles

Blockchain oracles are essential bridges that connect the blockchain with real-world data. They enable decentralized applications (DApps) to access external information, like financial data, IoT metrics, and weather updates. Since blockchains are deterministic and can't read external data directly, oracles serve as reliable channels to push external data into the blockchain. As a blockchain engineer building smart contracts, you may need oracles to incorporate real-world data into your projects effectively.

Data Feeds

Data feeds provided by blockchain oracles involve the constant submission of real-time data to the blockchain. These feeds act as reliable sources of information, ensuring that the data is up-to-date and accurate. By utilizing data feeds, DApps can access a wide range of information, powering a diverse array of use cases across various industries.

Price Feeds

Price feeds are a specialized type of data feed designed explicitly for capturing prices of cryptocurrencies, stocks, and other financial indices. These feeds are crucial for DeFi (Decentralized Finance) applications, enabling them to calculate asset values, execute trades, and manage financial instruments in a decentralized manner.

Price Aggregates

Within price feeds, price aggregates come into play. These aggregates consolidate data from multiple sources to provide a comprehensive and reliable price representation. By utilizing various data sources, price aggregates ensure accuracy and reduce susceptibility to data manipulation or discrepancies.

Deviation & Thresholds

Deviation and thresholds are essential parameters used to determine when the blockchain should update based on new data from the oracle. As blockchain updates can be resource-intensive, these metrics are implemented to control the frequency of data updates. They help strike a balance between real-time accuracy and cost-effectiveness.

On-Demand Oracles (Optimistic)

On-demand oracles operate on a request/response model, where smart contracts initiate a request for specific data from the oracle service. The oracle then responds with the requested information, providing the necessary data in a timely manner for the execution of smart contract functions.

VRF Oracles (Verifiable Random Functions)

VRF, or Verifiable Random Functions, are critical for generating random numbers on a blockchain, where true randomness is inherently challenging due to the deterministic nature of the system. VRF ensures that the generated random numbers are transparent, verifiable, and cannot be manipulated, making them ideal for various applications, such as gaming, lotteries, and random selections. As a blockchain engineer, whenenver you need a random number in a smart contract, you neeed a VRF Oracle.

Automation Oracles

Automation oracles build upon the concept of on-demand oracles but take it a step further. They incorporate additional parameters to delay or trigger data updates based on specific conditions or events. By introducing automation, DApps can have more control over the frequency and timing of data updates, optimizing efficiency and resource utilization.

Custom Oracles

Custom oracles are versatile solutions that don't fit predefined categories. They can be tailored to meet specific needs across various applications, offering endless possibilities for creativity and personalization. While they might be unique, custom oracles still fall into the feed-based or on-demand oracle models.