Exclusive video | API3: Flash loans are just the beginning, oracles are the real thing

This issue is jointly launched by Golden Finance and Bitouq. Updates every Wednesday and Friday. Updates from time to time on weekends.

So how to understand the oracle in the most understandable way?

To put it simply, the function of the oracle machine is to provide off-chain information for decentralized programs. This is because it can be understood as a world isolated from the outside world on the blockchain. For example, the current market price of 1ETH is 600USD, so in On the chain, if we consider it purely from the perspective of ETH, we only know that 1ETH=1ETH, so the role of the oracle machine is to get this information (not just price information, which is diversified) to the chain.

In order to make the financial structure of DeFi more stable and to communicate with the outside world more flexibly, more and more projects have begun to access oracles. So what is the relationship between the widespread use of oracles and the value of the tokens behind them?

Taking Chainlink as an example, we can see that since July 2020, $LINK has had an explosive growth. We can simply understand that when more and more projects use the information brought by Chainlink , when the overall market value of DeFi is getting higher and higher, which means that the value of these information controls is getting bigger and bigger, then the value of $LINK must reach a certain value to a certain extent to ensure the safety of the entire ecosystem. Because if the value gap is too large, the possibility of being manipulated or attacked will increase.

Exclusive｜The transaction volume on the Ethereum 24h chain is nearly 3.399 million ETH, an increase of 81.44% month-on-month: Golden Finance News, according to OKLink chain data, the number of active-zce addresses on the Ethereum 24h chain exceeds 521,100, a month-on-month decrease of 13.66%; The transaction volume on the chain was nearly 3.399 million ETH, an increase of 81.44% month-on-month; the number of transactions on the chain exceeded 1.0911 million, an increase of 5.94% month-on-month.

As of 2:00 p.m., the computing power of the entire Ethereum network is about 247.92TH/s, a month-on-month increase of 0.32TH/s, the recommended Gas fee is 63.66Gwei, a month-on-month increase of 6.85%, and the number of unconfirmed transactions is about 95,700. [2020/10/13]

Can you imagine controlling a $100B market with a $1B "tool"?

Many people often ignore this issue.

Exclusive | Golden Rock: The launch of China's central bank digital currency will inevitably further activate the development of the digital economy: Recently, the International Monetary Fund (IMF) issued a document "Central Bank Digital Currency: 4 Questions and Answers" discussing the benefits and challenges of central bank digital currency. In this regard, independent economist Jin Yan pointed out in an interview with Jinse Finance that the central bank’s legal digital currency has at least three advantages: one is paperless paper money, which saves costs and replaces labor; the other is empowering the digital economy and adapting to technology. The general trend of innovation; the third is to create digital assets and boost the digital new real economy. There are two levels of challenges, the simplest is technology, and the deeper level is concept.

The most controversial issue is the relationship between central bank digital currencies and inflation. Economist Friedman said: Inflation, no matter when and where, is a monetary problem. The issuance of the central bank's digital currency will almost certainly increase the actual amount of currency in circulation, but it may not necessarily lead to hyperinflation. Because in the ecological circle of the digital economy, digital currency, digital assets and digital finance are integrated and interdependent, and will spontaneously flow out of national borders and enter the global market. This spontaneously produces two incremental assets, one is digital assets that exist invisible, and the other is global assets that exist across borders. Therefore, the entry of legal digital currency into circulation is not the direct cause of hyperinflation. The downward trend of China's economic growth rate has not stopped, but the downward trend has slowed down, but at the same time, the digital economy has grown against the trend, and the contribution of the digital economy last year was close to 35%. The launch of the central bank's digital currency will inevitably further activate the development of the digital economy and boost the global expansion of the Chinese economy. [2019/12/19]

Since September-October this year, the security of DeFi has really been taken seriously (although there have been many cases of looting of projects like dFore a long time ago), so now flash loans have once been regarded as the top of DeFi" Killer”, by the way, let’s briefly popularize the flash loan:

Golden Finance’s exclusive analysis Bitcoin may be widely used in the field of cross-border payments due to its high transparency and high openness of transactions: Golden Finance’s exclusive analysis, Argentina’s Banco Masventas Bank revealed today that starting from Monday, it will cooperate with Bitex to use Customers can use Bitcoin to send cross-border payments, which is the first time a domestic bank in Argentina has adopted Bitcoin for cross-border payments. Jinse Finance analyzes that after a bitcoin payment transaction is generated, the payment cannot be revoked or frozen. In addition to breaking the cross-border border restrictions, there is no hidden cost in the bitcoin transaction process, and it is not affected by any time. As long as the Internet Existence can complete the operation at any time. In addition, Bitcoin is a zero-barrier international payment, which can eliminate various complicated links of card swiping transactions and third-party service agencies, realize direct connection between buyers and sellers, and greatly improve payment efficiency. [2018/5/22]

A form of loan that does not require collateral and guarantees. It requires your borrowing to repayment to be completed within one block. If the loan is not returned or the loan fails, the transaction of the entire block will be rolled back.

Jinse Finance’s exclusive analysis of Samsung’s multi-level layout in the blockchain field: Filament announced the completion of a $5 million Series A round of financing, with investors including Bullpen Capital, Verizon Ventures and Samsung Ventures. This is the first time Samsung Ventures, the investment arm of consumer electronics giant Samsung, has invested in the blockchain industry. According to Jinse Finance’s exclusive analysis, South Korea is an important market for cryptocurrencies. Bitcoin traded in Korean won accounted for 3.12% of the total trading volume, ranking fourth among all trading currencies. Samsung is a giant consortium in South Korea, and its products cover multiple markets in South Korea. Samsung also has a layout in the blockchain field. Samsung SDS has successfully implemented a shipping logistics blockchain pilot project. Now, the electronics industry giant has launched a blockchain electronic authentication platform - Rezoome. Samsung SDS also launched an "intelligent logistics service", the core of which is to apply artificial intelligence and blockchain technology to the entire logistics process. Samsung Ventures participated in IBM's ADEPT project, which uses Bitcoin and Ethereum networks to create a decentralized Internet of Things. In addition, in terms of hardware, Samsung may produce ASIC chips required for mining. [2018/4/8]

The flash loan product was originally designed to be more conducive to arbitrage and brick-moving in decentralized transactions, as well as liquidation in the lending system, providing a good guarantee for the stability of decentralized finance. However, this extremely smart product has been used by some extremely smart people and has become a blockchain "nuclear weapon". People can borrow super large amounts in an almost cost-free way (prepare gas fees and interest), but This super large amount will not play a big role in the arbitrage business, but will cause excessive slippage due to the excessive amount.

Then this becomes a powerful weapon for attackers. When there is a certain loophole in your contract design logic, the flash loan will infinitely magnify the loophole.

Then to some extent, flash loan can be said to be the touchstone of many DeFi projects, because it is still looking for a project that is not rigorous in the contract design process. If the new version of WETH arrives, it is reported that the interest-free flash loan function will be launched, then the entire industry will face a major cleanup. It can be said that the "thunder" of flash loan is still positive.

So where is the real "thunder"?

Let's look at an article first ->

The recent DeFi boom has benefited Chainlink node operators. For example, between August and October of this year, the top three Chainlink node operators received a monthly subsidy of close to $100,000 per month. According to research conducted by The Block, between August and October, ChainLayer earned over $322,000, LinkPool over $306,000, CertusOne over $293,000 and Fiews over $282,000. September has been a particularly good month for them, as the top three nodes all have subsidy totals of more than $160,000.

In contrast, API providers are paid orders of magnitude less and don't even know their data is being resold within these applications. Node operators can pay between $100 and $200 a month for subscriptions to these providers, Vänttinen said. (translated from Coindesk)

The article talked about the profitability of Chainlink node operators. In fact, here is a brief explanation of the implementation logic of Chainlink, a mainstream oracle machine. When the dAPP calls the Oracle oracle through the aggregator, it is not these Oracles that actually provide data, such as LINK, DIA, BAND, etc., but many unknown data providers. There are 3 problems here:

Generally speaking, the traditional oracle machine uses a 3rd party Oracle "third-party oracle machine", and this method contains huge risks, because the operator has not become the main responsible person but has become the main profit sharer. In the absence of responsibility supervision, there is the possibility of doing evil, but the actual data provider is sharing a small amount of profits, and at the same time is responsible for a very large value of data. Back to the opening question:

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