Paralink Network (PARA) offers a multi-chain oracle platform for DeFi and other blockchain applications. Oracles are a valuable mechanism that is used to predict markets, providing users with real-time asset prices and additional valuable data.
The traditional meaning of the word "oracle" dates back thousands of years. Simply put, an oracle is a person or organization that provides others with insightful information or prophetic predictions about the future. It is traditionally believed that divine information is conveyed to these seers by the gods themselves. Alternatively, the oracle could be a priest or priestess acting as a kind of medium. Wise advice and / or prophecies from divine power were transmitted through them.
Essentially, oracles are a powerful source of information. Given the backstory, it is surprising to learn that oracles are a common tool in blockchain technology. This article details what they are and what their purpose is in relation to the blockchain.
What is an oracle on the blockchain?
The general functions of the blockchain oracle are similar to those that exist in mythology. They were a source of information beyond human understanding. Similarly, blockchains do not have direct access to information that is off-chain. Because of this, there is no visible method for checking the conditions upon which smart contracts are based.
Oracles provide the data needed to run smart contracts when preconditions are met. The association of these conditions with smart contracts can have many reasons. These include temperature, payment completion, price change, and many others.
Essentially, oracles allow smart contracts to interact with external data.
This data comes from one of two devices: software (big data application) and hardware (Internet of Things). As mentioned earlier, the conditions can be any data, however, the smart contract does not wait for external data to enter the system. Instead, it is necessary to enforce the contract, that is, it is necessary to spend network resources to call external data. Therefore, this leads to an increase in the transaction costs of the network. When it comes to Ethereum, it's "gas".
Decentralized applications (DApps) cannot communicate with the world without the use of an oracle. The reason for this lies in the significant differences in formats.
Blockchain is essentially a reflection of a series of events that happen one after the other in a sequence. In general, this is a series of transactions. Accessing external information requires inconsistent data points, so the blockchain cannot use them. This particular aspect ensures the immutability of the blockchain, however it also greatly reduces its flexibility.
The off-chain world is different in that it is not deterministic like blockchain. In this case, there is no documentation of the events in the specific order in which they occur. This, in turn, causes problems with overall transparency. Creation and understanding of data can occur at any time, which increases flexibility. But at the same time, it increases the difficulty of communicating with the blockchain.
This difference in default bases makes them incompatible. Two-way communication between them is possible only in the presence of an oracle.
There are many types of oracles:
Software oracles: they process information data coming from network sources. These include temperature, commodity and commodity prices, flight or train delays, and a number of others. Software oracles receive information and put it into a smart contract.
Hardware oracles: There are a number of smart contracts that need information directly from the physical, external world. An example of this is a car crossing a barrier, where sensors detect the car and send data to the contract. Alternatively, RFID (Radio Frequency Identification) sensors in the supply chain.
Incoming oracles: They provide data coming from the outside world.
Outgoing oracles: They provide smart contracts that have the ability to send data to the world. An example of this is a smart lock that receives a payment to its blockchain address. Moreover, it should automatically unlock.
Consensus-based oracles: They get data from people's consensus and prediction markets like Gnosis and Augur. Using only one source of information is associated with great risk and instability. So, to mitigate market manipulation, prediction markets allow for a rating system for oracles. A mixture of different oracles provides additional security. An example of this method is having three oracles out of five that determine the outcome of a particular event.
The main problem with oracles is that people have to believe in external sources of information. This is regardless of whether they originate from a website or a sensor. Generally speaking, oracles are third-party services that have no place in the blockchain consensus mechanism. Thus, they are not subject to the hidden security mechanisms that this public structure provides. One can easily replicate man-in-the-middle attacks between oracles and contracts.
A healthy and stable assertion of the "second layer" is incredibly important. There are several computational methods that can help solve these problems. Be that as it may, this particular topic requires more attention than it does now. The reason is that secure oracles are essentially a bottleneck when it comes to the security of smart contracts. If there is not adequate Oracle security, this will be an effective delay in the wide-scale adoption of smart contracts.
Smart contracts are undeniably good for immutable storage and verifiable transactions. However, in the past, their use cases were quite limited. The main reason for this is that most blockchains are not aware of what is going on in the real world and cannot access any data that is not on the chain itself.
This includes any data available on the traditional web as well as data available through an API. When you start to think about how much of the tools we use today depend on this data, the problem becomes very clear.
Although many attempts have been made to solve this problem, the existing solutions are too expensive and fragile to be used at scale.
Paralink Network builds a scalable solution to the oracle problem on Polkadot. We believe that Polkadot is the optimal platform for our protocol due to its fundamental design principles: interconnectivity and scalability are two key components that make Paralink secure, scalable, and economically viable.
Oracles don't have to be complicated, in fact understanding the role of oracles can be easily understood if one understands the peripheral mechanisms that allow them to work. As you better understand how it all works, the purpose of each part will become clear.
Simply put, Oracle is an intermediary between the real world and a blockchain-based application. Oracle triggers the execution of the smart contract by checking the requirements of the contract with real-world data to ensure that all criteria are met. Once the data has been verified, voila, your transaction is complete.
The external data that Oracle relies on comes in many forms, and the data that Orale accesses makes it possible to classify what kind of Oracle it is.
Software oracles gain access to information data that can be accessed through any online source. This can be information such as real-time prices, products, logistics information, and more.
Hardware oracles collect information data from the outside world through physical means. The hardware collects data from things like RFID sensors that count cars at an intersection, or touch sensors that count the number of people walking through a certain area.
Centralized oracles act as an autonomous source of external information that is entered into the smart contract in accordance with the specified security parameters. Because a smart contract relies on this single party to obtain information, centralized oracles do not provide a high level of trust.
Decentralized oracles are the opposite of centralized oracles as they rely on various external data sources, providing a higher level of trust in the information they provide to the smart contract.
Paralink Link is real data access for cross-chain applications. Its goal is to collect, validate, aggregate and interpolate real datasets and feed them into smart contracts on Ethereum and Polkadot.
The Paralink node can operate as a standalone solution that offers cheap but centralized data entry. Ideally, it is managed by self-organized quorums that provide reliable inbound service. Paralink node can get real world data from HTTP RESTful API and comes with various parsers (JSON, HTML, XML). Support for SQL databases and other protocols such as gRPC is planned. In addition, it should be possible to request confirmed state on public blockchains.
The flexible design of Paralink nodes allows developers to query data, including live events, sports, weather, random numbers, and more. Developers can create custom queries using the Paralink query language and connect smart contracts to traditional web APIs in minutes.
Applications requiring the highest degree of security can use the Paralink chain negotiation algorithm running on Polkadot Substrate. This makes the coordination much cheaper than doing the same calculations on Ethereum.
To suit all kinds of applications and provide maximum flexibility, Paralink offers 3 security models with different cost, convenience and security features.
Easy entry. Paralink nodes can be used by any developer as a multi-chain input from any third party data source. Pros include ease of implementation with a PQL definition, low cost and speed, and the ability to search and verify multiple sources of information. This model also provides callback support for all blockchains without the need for bridges. The disadvantages of this model are that it requires trust in node operators
Reliable Ingress. Paralink Simple Ingress can be updated with cryptographically signed PQL results with ECDSA private keys from trusted data providers. This model is suitable for market forecasting, insurance, management and gambling applications and is easy to implement (PQL + Signing Proxy Contract). This cheap and fast model allows existing data providers to sell their services on the Paralink network. The model also provides callback support for all blockchains without the need for bridges. The main disadvantage of this model is that it creates a single point of failure.
Network security. Finally, Paralink offers a network security model for applications requiring the highest level of security without having to rely on a single source of trust. This is suitable for money markets, derivatives and other high stakes financial applications and is relatively easy to implement through PQL + Relayer Quorum + Bridge / XCMP. This model provides aggregation and chain validation guarantees, as well as the highest data reliability and quality. The disadvantages of this model are that it requires the use of bridges, i.e. Polkadot <> Ethereum, so not all chains are supported (yet) and cost more due to intra-chain coordination costs.
Paralink aims to bring the use of real data in cryptographic applications to a wide range of people through easy-to-use PQL, flexibility and lower cost compared to competitors. Paralink is now moving into its next phase of growth as there is growing awareness in the community about the possibility of using PQL to access real-world data and build multiple crypto applications.
Open source oracle solution for most popular blockchains
Paralink provides an open source and decentralized oracle platform for Polkadot, Ethereum, Binance Smart Chain and other popular blockchains.
Paralink Query Language or PQL is a new query tool for smart contracts
PQL definitions represent ETL (extract, transform, load) pipelines for sourcing, aggregating and validating information. They are the basis of oracle requests (jobs).
Why choose Paralink for oracle services?
Paralink provides data ingress for smart contracts. Create a bridge between real-world data and your smart contract in minutes. With Paralink you also avoid high costs of data ingress with other oracle solutions.
1. The hash is only 32 bytes long. IPFS is used to immutably store the job definition and provide an addressable content hash. The hash is only 32 bytes long, significantly shorter than the job definition itself, making it suitable for request signalling on resource-constrained chains such as Ethereum.
2. Paralink Node is built in Python.
Python is one of the most popular programming languages. This makes Paralink Node very easy to implement for a wide range of developers.
3. Paralink Node software is the backbone of the Paralink Network.
Paralink Node is an open-source piece of software responsible for accessing real world data, and relaying it back to smart contracts via callbacks.
Paralink Node is the backbone of the Paralink Network. It is responsible for sourcing information from real world data sources and across blockchains. Multiple data sources are supported, as well as aggregation and validation as defined in PQL pipelines.
Partnership (polygon, stratos, reef finance, astar, konomi, bondly, opendefi, etc)
Investors ( LD capital, bitcoin.com, kenetic, NGC, block dream fund, etc)
Paralink Token (PARA) is an incentive token used for on-chain coordination and governance.
The PARA token has a maximum supply of 1 billion (1,000,000,000).
1. Utility PARA token is used to pay for gas costs of the callbacks onto 3rd party blockchains
2. Relayer quorums Relayer quorums are self-organizing groups of Paralink Node operators, whose job is to service the data requests.
3. Incentives Adding PARA as a fee to a data request transaction is also an incentive mechanism for a particular quorum to prioritize the query.
4. Staking The quorum is governed by PARA token holders, which are also responsible for maintaining a top list of trusted relayer members.