Steemit Crypto Academy Season 3 week7 | Blockchain Oracle by @preshymukel
Special thanks to Prof. @allbert for the wonderful lecture on Blockchain Oracle.
Below is my entry;
Introduction
Blockchain Oracle acts as a middleman between smart contract and the external world in a blockchain. It gets informations from outside the world and submits it to smart contracts since smart contract can not directly get informations from the outside world. When Blockchain Oracle gets data from the outside world, it queries the data afterwards the data is been verified, authenticated and then activated, all of these actions are carried out using a trusted APIs.
Informations such as temperature, price, election results etc; are examples of data conveyed by oracles to smart contract.
Types of blockchain Oracles
Inbound Oracle: This is divided into software and hardware Oracle. They transmit real world data into digital information that smart contract can understand.
Software Oracle includes; servers databases etc.
Hardware Oracle includes; barcode, scanners, sensors, etc.
Outbound Oracle: It sends data to the real world from.smart contract.
Human oracles are specialized individuals who carry out verification of data from the external world inorder to determine if the data is authentic or not before conveying the information to smart contracts.
Other types includes; decentralized, centralized and contract specific Oracles.
1- History and Description. Does it have any token or cryptocurrency associated? Explain.
I'll be discussing about the Nest Protocol Oracle.
History and Description of Nest Protocol Oracle
Nest Protocol was developed in the year 2020 by anonymous team called the NEST Protocol Developer Group.
The NEST Protocol is a decentralized permissionless distributed price oracle blockchain network, it's development is based on Ethereum. It was designed for the purpose of on-chain verification of transactions, beta coefficient, quotations, price chain etc .
Participants in Nest Protocol are grouped into four;
MAKERS: This group of participant are those that quote mining price and then submit to the protocol. They also verifies completed transactions
MINERS: Miners are those participants that prepare quotations and make them available and then pay some fees in order to get Nest tokens as reward. They are marked as ‘0’.
Using BNB/USDT for example, if a miner quote a price of 1 BNB = 500 USDT, the miner needs to put into the contract 10 BNB and 5000 USDT and then pay 1% commission which makes the quote effective. The miner will then be rewarded with Nest tokens.
VERIFIERS: They are those that check the market to know if there is any difference between the market price and the quotation price. If there is a deviation, an arbitrage is made in order to earn profit. It is marked as ‘A’.
PRICE CALLERS: They call the Nest protocol quotations. It is marked as ‘C’.
Does Nest protocol have any token or cryptocurrency associated?
Yes, Nest protocol have a token called NEST Token which is the native token.
The Nest token has 10 Billion total supply.
Nest token is ranked 551 on CoinMarketCap.com and its price at the time of this research was $0.02028.
NEST Protocol also uses the ETH Token algorithm.
Functionalities and real-life applications of NEST protocol
In life security and safety are essential factors. NEST protocol main aim is security, the security mechanism of NEST protocol protect users assets from hackers.
Nest also supports staking and mining since mining and staking is getting more popular.
The NEST protocol oracle as a decentralized network tackles the problem of price on-chain which has to do with;
- Prediction of price
- Quote mining
- Beta coefficient
- Verification cycle
Miners of Nest prepare quotations and make them available and then pay some fees in order to get Nest tokens as reward.
Verifiers then take over NEST quote verification process. If there is any form of deviation between the market price and the price of a quotation, an arbitrage is made by a verifier in order to earn profit.
3- Pros and Cons.
Pros of NEST protocol:
Price reaction on Nest protocol occurs timely to market price changes.
It is very secured regardless of the permissionless nature.
It is a decentralized system.
Every user can become a miner and a verifier.
It is an on-chain based system thereby eliminating off-chain risk.
Cons of NEST protocol:
The price can easily be manipulated since the price is usually agreed on by users in the market.
The fact that every user can become a verifier can make the platform less regulated.
It can not be traded, it can only be mined.
4- Future developments and new projects
NEST token at its peak delivered a 883.29% of return. Currently a total of 141 million addresses holding Nest token was recorded by HBTC Exchange. The mining and staking data was also recorded to be $20.4 million in a day.
The developers of the chain has been working on financial orderliness of the chain by coming up with new versions. The Nest protocol currently has launched the newest version of the chain, version 3.6.
And the developers are still working tirelessly for the growth and development of the chain.
NEST Protocol is really developing in the sector of decentralized price oracle as DeFi platforms are relying on price data provided by oracle projects.
In comparison with other oracle projects, Nest protocol is very unique following its verification mechanism which makes it more secured for malicious attack. And its on-chain price generation is another unique aspect of it. All of these features lead to the growth of Nest Protocol oracle.
Nest Protocol oracle has also proposed a peer-to-peer quotation matching
Cc;