What is an Oracle?
Second generation blockchains have introduced smart contracts that allow for much more complex and conditioned transactions. With smart contracts, participating parties can define transactions via specific on and off-chain parameters.
However, blockchains alone cannot access this required off-chain data. We use the term oracle to define a service that provides off-chain data to on-chain smart contracts.
Put simply, an oracle acts as a bridge between the real world and blockchain by providing trusted and reliable off-chain data streams.
Ethereum-based oracles & scalability
The current oracle landscape is dominated by Ethereum-based oracles, that is, oracles that operate on (or with) the Ethereum blockchain.
Oracles with Ethereum backbones are unfortunately limited by the inherent restrictions found in the minting process on the Ethereum blockchain. Newly minted blocks can only process ~15 transactions per second leading to congestion and long wait times during times of heavy chain traffic.
This congestion has led to users paying increased fees just to push transactions through. As more users adopt Ethereum-based solutions, we have seen a meteoric rise in transaction fees.
Cardano (ADA)-based oracle solutions
In a direct response to the scaling issues plaguing Ethereum, Cardano (ADA) was developed as a quicker, inexpensive, and more secure blockchain infrastructure.
ADA is also one of the only Blockchain projects that has been built via a peer-reviewed and researched based approach. For an oracle built on Cardano this means the backbone of its network is built on a trusted, open source foundation adding another layer of trust for users.
Charli3 is the first decentralized oracle network for the Cardano blockchain. By being native to Cardano, Charli3 aims to avoid the notable issues with flexibility, scaling, and growing transaction fees seen with Ethereum-based oracles while also building its foundation on a trusted network.
Cardano blockchain benefits
- Flexible & robust scaling
- Reduced transaction fees
- Superior metadata and ID verification
- Reduced carbon impact via proof of stake protocols
As blockchain adoption grows, smart contracts will rely on reliable data streams from trusted sources. Building these data streams within the Cardano networks will provide an inexpensive and scalable solution that can grow with both public and institutional adoption.
We at Charli3 aim to provide powerful, trusted data feeds and building on a peer-reviewed blockchain is crucial.