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DIA’s oracle infrastructure has been deployed on the Fuse Network blockchain. The first product they will be utilized in will be the decentralized lending network on Voltage Finance.
Blockchains have been revolutionary in that they have for the first time ever permitted users to send and receive value and information via a dynamic, publicly auditable database that no central entity controls or can realistically affect in a major way. This enabled the emergence of a diverse array of groundbreaking products, including cryptocurrencies, decentralized financial services, non-fungible tokens and many others.
However, a crucial feature that blockchains have is that they are siloed from the outside world. A blockchain’s virtual machine cannot directly interact with a computational process that runs in a different digital environment or even on another blockchain even if it is almost identical in its workings, as is the case with many EVM-compatible networks.
At the same time, to be relevant to most applications, blockchains need to be able to use data generated in other environments and on other chains. This is especially important for decentralized finance (DeFi) use cases. Blockchains are also normally not particularly suitable for running intensive computation to attempt to verify the provided data. Thus, the need for robust oracles.
An oracle is a process that is relied upon to provide trustworthy data to smart contracts on a blockchain. One of the most reputable oracle providers in the crypto space has been Decentralized Information Asset (DIA).
Oracles for robust price data reporting
DIA is a cross-chain, community-governed end-to-end, open-source data and oracle platform for Web3. It provides oracle services on a number of leading blockchains including Ethereum, Fantom, Solana or BSC among others, and can be used for sourcing data on asset prices, lending rates, NFT and metaverse data and more.
DIA has a unique approach to reporting data (especially price data) that differs from that of most other oracle projects in the crypto space. Instead of relying on the potential for other nodes (disputers) to dispute the price data provided by a given oracle node to a smart contract, DIA obtains data from multiple centralized and decentralized exchanges for each price feed using their APIs and smart contracts directly. A separate data collector instance is allocated to scraping data from each exchange.
The data thus obtained is then used to calculate the price of interest in a customized and fully transparent manner. In other words, the client can decide how the given asset price is going to be determined, as well as on how frequently it shall be reported.
Although DIA stores and processes the initially obtained data off-chain, this allows achieving important benefits such as removing price outliers. At the final step, DIA makes new data points available for smart contracts on the relevant chain. DIA is also working on incorporating trusted computation using trusted execution environments in order to make the data it reports even more resilient to external interference.
Of course, no single approach to oracle service provision is perfect and risk-free and some approaches may be more suitable for some use cases than others. DIA’s centralized multi-source data processing approach makes it possible to mitigate arguably the largest price reporting risk in the crypto space. So far, there has been no verified attack on a protocol that involved malicious oracles, however, disruptions have been created through temporarily manipulating illiquid source markets on DEX’s. The way DIA obtains data for aggregate asset price computation significantly lowers the risk of price manipulation for assets traded on multiple exchanges.
How Fuse integrates DIA
The DIA decentralized oracle infrastructure has now been deployed to the Fuse Network blockchain. The arrival of oracles on Fuse marks an important milestone in the continued growth and maturation of the platform as oracles are crucial for further development of decentralized finance (DeFi) on Fuse.
The first product to benefit from DIA’s oracle technology will be the decentralized lending network on Voltage Finance developed in collaboration with Ola Finance. Ola will use DIA to obtain reliable price feeds for assets in Voltage’s lending markets. This will enable the addition of more assets to the Voltage lending network. Please stay tuned for more details about the launch of DIA-enabled price feeds.
In the future, DIA’s oracles may also significantly simplify the creation of other, customized lending networks involving ecosystem projects’ assets that may initially not have highly liquid markets. Finally, DIA can power not just price feeds but also other types of oracle services on Fuse. We are confident that the partnership with DIA will be a major step forward for the development of the Fuse ecosystem as a whole.
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