Decentralized projects are the ones that I believe stand to make significant gains and provide very interesting passive income opportunities over the coming years. All Decentralized Finance applications need price feeds on token swap and loan collateralization process. They all need Oracles and this is what makes them so precious.
Before I reveal my personal TOP 5 Decentralized Oracle Projects 2021, let me explain what Oracles are why the are so important.
What Are Oracles?
Oracles are bringing real-world information to smart contracts. They are acting as an intermediary between blockchain smart contracts and traditional non-blockchain applications such as website APIs, databases, and payment processing systems. Information can also be returned from the smart contract.
Blockchains don’t have access to information that is not on-chain. When it comes to Decentralized Finance this typically means price data that is used by smart contracts to control key aspects of their lending protocols. All Decentralized Finance applications need Oracles and this is exactly what makes them so precious.
So in fact, there are several notable projects that are working on connecting off-chain data and systems with the decentralized world.
No. 1 Chainlink ($LINK)
The leading decentralized data oracles network by far is Chainlink. ChainLink is one of the big winners these days and saw enormous growth.
ChainLink is a company that acts as an intermediary between blockchain smart contracts and traditional non-blockchain applications such as website APIs, databases, and payment processing systems. The company is the interface between blockchain and classic payment systems such as SWIFT, Visa, Mastercard, or PayPal. The node operators extract data from off-chain systems and convert them into blockchain-compatible formats.
ChainLink's native token is an ERC-20 token called $LINK. It is used to pay the node operator.
No. 2 Tellor ($TRB)
Tellor is an oracle that is focusing on price feeds.
Data requests are made to Tellor together with a number of tokens. This happens every ten minutes. Then Tellor chooses the ones with the most funds and sends them to the miner.
The product is already live and the smart contracts are on the Ethereum blockchain since August 2019.
Tellor has been invested in by some big names like BINANCE Finance Labs, Maker DAO, and Consensus.
No. 3 Band Protocol ($BAND)
Band Protocol is a cross-chain data oracle platform. Also, Band Protocol provides decentralized finance applications with secure and reliable access to trusted data. Band Protocol does it by connecting smart contracts with trusted off-chain data and ensuring its integrity using a delegated proof of stake and token economic incentives.
Band Protocol also claims to be fast, decentralized, scalable, and easy to implement. Also, Band Protocol has been invested in by some big names like Sequoia Capital, Dumamu & Partners, and Binance Labs. In March 2020, KAVA announced that it would use Band Protocol’s decentralized oracle to support the cross-chain usage.
$BAND is the native token of Band Protocol. BAND is also used for governance and staking.
No. 4 Decentralized Information Asset ($DIA)
The next Oracle on my list is Decentralized Information Asset ($DIA). According to the project itself,
“DIA is an open-source, data, and oracle platform for the DeFi ecosystem. DIA leverages crypto-economic incentives to drive supply, share and use transparent, crowd-verified price data and oracles on financial and digital assets”.
No. 5 DOS Network ($DOS)
The DOS Network is a layer 2 chain agnostic decentralized data oracles network. The DOS network can support multiple mainstream blockchain protocols. It also offers real-time data feeds, connecting DApps and smart contracts with reliable data sources and high computation power.
"A Decentralized Oracle Service supporting multiple heterogeneous blockchains. DOS Network brings real word data, event and computation power to smart contract in a secure, reliable, efficient and scalable way."
The DOS Network is extremely fast, completing the off-chain process in less than one second.
$DOS is currently located on market cap #463, the lowest from all five Oracles.
My Final Conclusion
Decentralized Oracles are a hot trend in crypto, boosted by the rise of Decentralized Finance.
I think the boom hasn`t stopped yet and Oracles are still a good choice because there is a really important use-case for them.
At the end of my post, I also need to mention that my intention is also NOT to replace your own research. The thing is that I may look smart on my profile pic but nevertheless, I am not your financial sensei. ?? However, my post really reflects my own opinion.
So, I hope I could provide you with some interesting and useful information about decentralized Oracles.
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