Binance has launched a native oracle solution for blockchains to interact with data stored off-chain.
In an announcement on Wednesday, Binance said that its new decentralized web3 oracle would function as a data-feed network that connects real-world data to blockchain smart contracts.
The first blockchain to integrate with Binance Oracle is unsurprisingly its own native BNB Chain, with the first 10 projects on the platform having already linked to the Binance Oracle network through an “early bird program.”
However, Binance’s oracle is blockchain agnostic, meaning that any blockchain can integrate with its feed no matter which script it was built on.
Blockchain oracles are an important piece of infrastructure for smart contract platforms, particularly those that facilitate functions relating to decentralized finance. Oracles send externally stored data to blockchains in real-time so its participants can make important decisions. In the case of a DeFi protocol, these are typically price feeds which provide an on-chain reference for users.
“Using oracles to dramatically increase the smart contract’s knowledge of what’s going on outside of the blockchain, allowing it to respond to external events with specified actions will be crucial,” said Gwendolyn Regina, investment director at BNB Chain.
The accuracy of Binance Oracle’s index prices will be verified by smart algorithms, using data monitoring infrastructure to provide real-time alerts. The price data will be sourced and aggregated from centralized exchanges using an algorithm and a Threshold Signature Scheme to sign individual data feeds.
The integrity of oracle solutions is crucial to the success of a blockchain, making it fairly complex for those deciding which oracle to integrate with their project. Several large scale DeFi exploits this year were caused by oracle manipulation, including Fortress Protocol that lost 1,041 ETH and 400,000 DAI in the exploit.