Research Summary: Blockchain Oracle Design Patterns

Thank you for your question @rlombreglia. Apologies for the very late response. I’ll take them one after the other.
What direction do you think this element of the industry is most likely to take?
||There will be more recognition and use of oracles. Mainstream blockchain adoption can only happen where there is a synergy between on-chain and off-chain information and abilities. Oracles are going to show importance in any web3 platform that requires data handling. At the moment, there is already a shift from using oracles for only price feeds to all forms of data recovery and events based outcomes. Examples are Etherisc and Arbol who use oracles to facilitate insurance and help farmers hedge against weather risks. Oracles will also be pivotal in connecting existing traditional legacy systems of institutions/governments to blockchains. With this increased use comes an increased consciousness of security, especially as we may see regulators getting interested in the future on matters concerning data privacy and legal liability. There may be hybrid versions of these design models in future to make a foolproof system.|
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||While design models become hybrid, there is still a lot of room for more oracles to grow outside the Ethereum blockchain. This is especially because high gas fees and scalability issues may hinder optimal oracle performance as its use gets more frequent. Chainlink alone recorded up to $1 million in gas fees paid by users across 10 networks to carry out oracle transactions in the past month. Still most top oracles today are built on Ethereum because the Ethereum network currently dominates over 50% of the DeFi market and it is easier to provide services this way. This will change with time.|
||Finally, we all know that interoperability has become the watchword for the future of blockchain technology. Blockchain agnostic oracles will be at the center of making off-chain information transfer seamless between different blockchain networks. I agree with the authors of the paper that it is indeed lacking now. However, I believe that there will be development in this area in the future just like all hands are on deck now to make bridges better. |
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||Without oracles, blockchains are like computers without an internet connection and like all areas in web3, we are not there yet. There will be much iteration in the industry as blockchain technology becomes more integrated with traditional systems. |

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