Decentralized oracles are the newest hot trend in crypto, bolstered by the rise of Decentralized Finance (DeFi). We have looked at the top 5 oracle projects.
They tackle an important long realized, but recently solved problem in the world of blockchain and smart contracts. They allow on-chain smart contracts to get reliable off-chain data, often necessary for contract execution. An oracle sources reliable data from multiple independent sources, filters it for inaccuracies, and transmits it across while ensuring that it isn’t tampered with and delivers it soundly to where it’s required.
Why Are Decentralized Data Oracles Required?
But why are they required? That’s because contrary to popular belief, smart contracts which form one of the basic building blocks of the blockchain world, are actually not that smart. They enable complex logic executions once implemented, but they don’t have default access to real-world data. Data that is required to make decisions, such as temperature, price of an asset, etc…
This on-chain off-chain data communication is necessary to enable complex decision making, and has use cases in finance, securities, exchange services, smart-wallets, recovery, predictions, gaming and gambling etc… Here are the top 5 decentralized oracles solving this issue.
5. Decentralized Information Asset (DIA) – Marketcap $19.63 Million
We kick off our top 5 oracles with Decentralized Information Asset or 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”.
The service is freely accessible, validated by a community of stake holders and highly scalable. The project is run by DIA Labs. According to the official documentation “DIA is an ecosystem for open financial data in a financial smart contract ecosystem”.
DIA Price Performance:
DIA currently sits at a token price of $2.53. Their token sale is still ongoing. It started on August 3rd, and ends as of tomorrow on August 16th. With a market cap barely below $20 million, it is one of smallest oracle projects in crypto, which also means it has a lot of room to grow.
4. DOS Network (DOS) – Marketcap $36.53 Million
The DOS Network is another layer 2 chain agnostic decentralized data oracles network, which 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.
The DOS Network is extremely fast, completing off-chain process in less than 1 second. However, DOS is often limited by the performance of the base layer 1 protocol.
DOS Price Performance:
DOS’s ICO was held in March 2019. The oracle project has since given amazing returns to token holders. Gaining 23.01 x its original price in USD, equivalent to ~2,200%. Not a bad return for under a year and a half. Even more impressive, DOS has had a massive 24,190% run from June 26 til August 13! The DOS token now sits at a price of $0.276 and a market cap close to $35 million, leaving enough potential for even more price gains.
The token’s main use cases are staking and fees. Node operators are required to stake DOS before starting to provide data, and oracle service requesters need to pay service providers in DOS tokens. Additionally, the DOS token is used for governance.
3. Aeternity (AE) – Marketcap $57.86 Million
Unlike most decentralized data oracle projects which run as layer 2 applications on other blockchains, Aeternity is a smart contracts blockchain protocol with a native integration of oracles. It is a Turing complete, highly scalable, and sharding enabled blockchain. Aeternity allows off-chain contract executions.
This native decentralized data oracle support is especially important and interesting, because it eliminates the need to trust any other source. No other mainstream blockchain protocol currently has this functionality.
AE Price Performance:
Aeternity’s (AE) current price of $0.183 is still below its ICO price of $0.28, and a far shot from its all time high of $4.92!
2. Band Protocol (BAND) – Marketcap $286.66 Million
The closest competitor to Chainlink and the second most valuable decentralized data oracle project is Band Protocol. BAND is also a cross-chain (compatible with multiple blockchains) decentralized data oracle project that provides and manages real world data to smart contracts.
It enables the provision of secure and reliable feeds, which are tamper resistant and don’t have a single point of failure. The project is backed by leading organizations such as VC firm Sequoia Capital and the cryptocurrency exchange Binance.
BAND Price Performance:
Finishing its token sale in September 2019, less than a year ago, the BAND token has already secured its investors a 28.63x return on their investment. An impressive 2,763%! The token currently sits at a price $13.54. BAND already boasts an impressive market cap of around $286.66 Million, but with Binance’s backing, there might still be room to grow!
Coinmarketcap (CMC) recently launched a “Learn Band Protocol, Earn $BAND” promotion. The promotion distributes BAND tokens to CMC users for watching educational videos about the coin and ends in 4 days.
1. Chainlink (LINK) – Marketcap $5.86 Billion
The leading decentralized data oracles network is by a far margin Chainlink. Chainlink connects smart contracts to off-chain real world events information. The oracles are secure, resistant to manipulation and thus reliable. The Chainlink project is at the forefront of decentralized data oracle innovation and constantly introduces new data pairs/services to advance the field. Its value accrual is secured by the fact the node operators must be paid in LINK and that most crypto based services need reliable/secure data for their smart contracts, for effective and stable operation.
A vital component of the Decentralized Finance (DeFi), it has partnerships with 200+major companies and teams. The Chainlink data oracles are integrated with nearly all Ethereum based DeFi projects, and has profited from the recent DeFi boom. The platform’s native LINK token has perform admirably, year till date, despite the economic crisis and the stagnant prices of most top crypto-assets.
LINK Price Performance:
LINK has been all over the crypto news lately. And even a (later debunked) FUD document couldn’t stop the meteoric rise of Chainlink. The LINK marines are one of the strongest crypto communities, many HODLing since ICO! Their loyalty has more than paid off: 149.88x since ICO. A modest $7000 initial investment in 2017 would have made the HODLer a millionaire in 2020!
The price now sits close to $17, and speculation is running rampant about where it might be by the end of the year. Others are warning of a potential sell off. In any case, the investment has more than paid off for early adopters. With a market cap of $5.86 Billion, it is by far the market leader between oracles.