Author: @madridbg, through Power Point 2010, using public domain images. David Thomas
Greetings and welcome dear readers of the #Hive platform and especially to all those readers who make daily life in the community of greater economic relevance of the platform, referring to @Leofinance. The topic that competes us this delivery, is related to decentralized finance and how these are influenced by the implementation of new protocols to what many call oracles and that are directly related to the NFT games.
In this sense, in order to understand what an oracle is, it is necessary to know that it is based on smart contracts, understand these as those contracts that allow to develop different operations automatically through the use of decentralized networks, among these networks we can find Ethereum, Tron, Solana, among others.
In this sense, it is necessary to understand that smart contracts have become popular from the year 2020 since they allow users to perform operations without the presence of mediating entities. Therefore, they are executed directly between users, being a reliable, transparent, auditable process with data that can be scaled over time.
Having clear the above, it is necessary to know that an oracle is nothing more than computerized and standardized programs that allow the development of various functions that generate a kind of bridge or connection between the world of blockchain networks and the real world, a process that is based through the execution of smart contracts where different variables are manipulated or managed that are changeable depending on the data of the operations that are executed.
In this sense, oracles allow the development of diverse services through DEFI protocols, that is to say, an oracle has the capacity to consult the type of quotes that are executed in the market, besides calculating the interests that apply to the services they offer, the functionality of the same depend on the total locked value (TVL) that are added in the platform that use the protocols of the oracle in question.
Currently we can identify different types of oracles with different functions, being the most used the Chailink oracle, this allows to run on different networks, Ethereum, Solana, Polygon, among others and have more than 53.9 billion TVL.
Similarly we can find the Maker oracle, this allows to track reflect and identify the prices of different assets, making a correlation between real world assets and cryptographic assets, with respect to TVL has managed to accumulate about 13,750 million offering services to protocols of type Makerdao and Keep Network, being the first with greater dominance around 99%.
We can also find Twap, oracle developed by Uniswap, the same allows to calculate the average price of an asset during a specific period of time, Therefore, it is to be expected that the specific function of this oracle is to provide the price of various cryptoassets to decentralized platforms of DEFI type, being the one that is generally applied in NFT games, since its mechanism generates greater resistance to attacks that seek to manipulate the displayed prices of cryptographic assets based on the beginning of each mined block and which is quoted based on the last transaction of the previous block.
Based on the above, we can determine the importance of this type of protocol in the proper functioning of decentralized finance, they behave as a gear that allows the financial system to function properly, however, we must be aware that oracles are not the panacea to the shortcomings of cryptoassets, as sometimes their security can be breached, so that there is still a long way to go to improve and perfect the operation of this type of protocol.
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