Chainlink has unveiled its latest update to Off-Chain Reporting, or OCR, the biggest overhaul of the network since it launched on Ethereum in 2019. Previously, data was aggregated on the chain itself. This meant that, in the face of increasing network load, there could be a problem accessing the data.
OCR is the third and latest version of the Chainlink Core client running on Chainlink nodes. The most immediate benefit to DeFi and its users will be a 10x increase in the amount of real-world data that can be made available to dApps. Chainlink OCR scales oracle networks by aggregating data off-chain and sending only a single on-chain transaction - as in the image below:
OCR was developed by researchers at Chainlink Labs, led by Cornell computer scientist Ari Juels, former IBM research head Christian Cachin and former BITGO CTO Ben Chan.
The new update, which has already been deployed for the ETH/USD and LINK/USD price feeds, aggregates data from multiple sources in the Chainlink network. Each node signs off on its data source before passing the information to an on-chain contract shared with participating applications, such as decentralized financial apps (dApps).
According to Chainlink, the update will also lower gas consumption per average transaction on the Ethereum network. This is a boon for DeFi applications that use Chainlink's oracle.
Why is an update needed?
Until now, when Chainlink nodes retrieved data from external sources, they had to move the data onto the chain and then aggregate it. When each oracle node has to move the data onto Ethereum, it results in large ETH gas costs for the node operators.
Chainlink software is open source and not all nodes are supported by Chainlink. Regardless, whoever operates the node must consume ETH tokens to bring the data onto Ethereum and perform calculations on it. This drastically limits the amount of data that nodes can handle, especially as the price of ETH goes up.
Off-Chain Reporting means that storing data and performing calculations no longer takes place on the Ethereum blockchain. Instead, it takes place on a different, decentralized network. The keyword here is decentralization.
More About Chainlink
In terms of price, Chainlink has just set a new ATH of $27.52 - according to CoinGecko. At the time of writing this article, Chainlink costs $27. The bullish sentiment towards Chainlink is very much tied to the stability of Bitcoin and if BTC can continue its move above $50,000, LINK all the time could perform even higher.
In summary, the top 1% of Chainlink addresses are accumulating LINK in a way that indicates they are confident about the long-term value of the token. From a technical analysis perspective, Chainlink has just established a new ATH, and most daily indicators point to overbought territory.
However, the FOMO may have already begun, and Chainlink may be on track for even faster gains, as it did last July.
