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As oracle networks cause rising concerns, what’s next?

Press Releases Crypto News AMB-Crypto As oracle networks cause rising concerns, what’s next?

Oracle-related manipulations resulted in exploits of $892 million from 2020.
Oracle-less protocols aim to address the gaps, but they are not foolproof.

Blockchain oracles have played a key role in connecting the blockchain world with the real world, enabling decentralized apps (dApps) to react to data from traditional systems.

The most basic example of these services is the price information of different crypto assets, which are fed into the smart contracts of decentralized finance (DeFi) protocols.

Chainlink [LINK] was the popular oracle network at the time of writing, with its LINK token being the 19th-largest crypto by market cap, per CoinMarketCap.

However, concerns over reliability and manipulation have cast a serious doubt on the future of this blockchain middleware. According to a recent report by Binance Research, nearly $892 million worth of cryptos have been lost due to oracle-related manipulations over the last three years.

Source: Binance Research

The incidents of exploits have dramatically come down in 2023. Regardless, talks of an alternative to the existing oracle system have gained traction. That’s where oracle-less protocols come into the picture.

Go oracle-less

Oracle-less protocols eliminate the need for oracles entirely. This means that the projects won’t be dependent on external price feeds. Hence, malicious actors won’t be able to exploit them easily.

As per the research report, some ways by which oracle-less projects could be implemented in the realm of lending was through peer-to-pool and peer-to-peer models.

The peer-to-pool model involves the creation of a permissionless pool, wherein lenders and borrowers would decide on the

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Author: Aniket Verma

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