Chainlink 2 0 Lays Foundation for Adoption of Hybrid Smart Contracts

Augment the capabilities of smart contracts by securely composing on-chain and off-chain computing resources into hybrid smart contracts. This is a distributed system of oracles (the term “nodes” can be used interchangeably within the ChainLink network) contacting multiple data sources (some overlapping, some distinct) returning a single answer. ChainLink uses the LINK token to pay node operators for retrieving and formatting data. Additional work via adapters can also be accomplished within the node’s software, including aggregation and other computation methods. A node’s uptime and other reputation-based metrics act as guarantees that the node will respond accordingly. The node operators set their own prices for data retrieval and computation to be paid in LINK tokens.

One form of attack, freeloading, is discussed in other sections of the white paper, but the certification service is focused on different types of attacks, sybil and mirroring. A sybil attack is where an attacker would control multiple nodes in the ChainLink network, how to buy woo attempting to control enough so that their falsified answer would be accepted as the correct answer given to a smart contract. Mirroring could also be used by compromised nodes to obtain their data from one another, instead of querying a data source individually.

Contributing authors Ari Juels, Lorenz Breidenbach, Andrew Miller, and Sergey Nazarov dive into the technical advancements of the whitepaper and discuss Chainlink’s overarching vision for the future of decentralized oracle networks. This whitepaper expands the role of Decentralized Oracle Networks (DONs) in the blockchain ecosystem, laying out the key advancements for the Chainlink Network to power a suite of decentralized services for smart contracts on any blockchain. However, in-contract aggregation has a problem with oracles simply copying other oracles and returning the copied answer so that they don’t need to query a data source, called freeloading. Algorithm 1 (below) shows how freeloading can be eliminated by using a commit / reveal scheme.

Nazarov disclaimed that Chainlink is not attempting to replace existing blockchains or layer-two solutions. Its aim is to be a flexible, customizable solution to compute data, which could be used to scale existing decentralized applications or even just run rollup schemes and other layer-two solutions. Chainlink would offer the choice of consensus mechanisms and nodes to each individual user, who will choose the trust guarantees they need. Ensure nodes in decentralized oracle networks have strong economic incentives to behave reliably and correctly, even in the face of well-resourced adversaries. Chainlink today enjoys a dominant position in the solutions related to the decentralized oracle. The company released its original white paper around 3 years back and offers many solutions in a wide variety of domains, including the likes of decentralized finance (DeFi), non-fungible tokens (NFTs), gaming, and insurance.

This means that each oracle will reveal their answer in the form of a commitment to the contract, which prevents other nodes from seeing the provided answer. After enough commitment messages have been received in the aggregation smart contract (this can vary due to block times and data provider response speed), nodes will reveal their answer within the decommit message. Chainlink services are powered by decentralized oracle networks with a long track record of high availability, reliability, and data accuracy.

  • Ensure nodes in decentralized oracle networks have strong economic incentives to behave reliably and correctly, even in the face of well-resourced adversaries.
  • Everything here is summarized directly from the white paper, just hopefully in a way that makes it a little easier to understand.
  • I am very excited to know that you are interested in this amazing technology, you will be going to amazed by the incredible potential of the blockchain.
  • To keep the date up to date, DONs have the sync function, and for dispute settlements, features like enforcing and arbitrating are present.

Finally, we characterize the properties of an ideal oracle as guidance for our security strategy, and lay out possible future improvements, including richly featured oracle programming, data-source infrastructure modifications, and confidential smart-contract execution. With the specific focus on confidentiality and scalability, DONs are touted to be a game-changer for the entire blockchain domain. In terms of the significant features, the hybrid DONs will offer hybrid smart contracts and enhanced data feeds and VRF, Chainlink Keepers, Chainlink Fair Sequencing Services (FSS), and Chainlink decentralized identity. In addition, the concept of super-linear staking has also been introduced by the new white paper, which mandates that the resources of the attacker must be greater than the combined security deposit of the nodes of the decentralized oracle network to proceed further. This new definition significantly expands the scope of oracle networks to include not only data delivery, but also any form of off-chain computation as well as any other decentralized service that blockchains do not provide.

“Super-linear (quadratic) security”

This website is using a security service to protect itself from online attacks. There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. The Smart Contract Research Forum is an intellectual commons for academic researchers, software engineers, and industry leaders to collaboratively define, design, and advance smart contract technology.

  • The legal case had hung over the company like a Damocles’ sword; the SEC has signaled that it might appeal the decision, though a federal judge has already ruled against that plan.
  • In Chainlink’s view, this reliance makes these apps an existing example of hybrid smart contracts.
  • Any smart contract using such services has a single point of failure, making it no more secure than a traditional, centrally run digital agreement.
  • Chainlink’s CCIP which, “enables users to programmatically transfer tokens from one blockchain,” went live for early access users in July.

For more information on super-linear staking and the other forms of cryptoeconomic security being developed, refer to Section 9 of the whitepaper. The Chainlink 2.0 whitepaper was written by a team of world-class academic researchers specializing in fields like security, cryptography, distributed systems, game theory, mathematics, and various other computer science related disciplines. It’s very interesting to analyze the concept proposed by Chainlink in its new whitepaper.

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Taking the game further, now the Chainlink has released its second white paper, dubbed Chainlink 2.0 Whitepaper. This recent announcement has helped the Chainlink price prediction to surge even higher. Abstract
Smart contracts are poised to revolutionize many industries by replacing the need for both traditional legal agreements and centrally automated digital agreements. Both performance verification and execution rely on manual actions from one of the contracting parties, or an automated system that programmatically retrieves and updates relevant changes. Unfortunately, because of their underlying consensus protocols, the blockchains on which smart contracts run cannot support native communication with external systems.

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The new whitepaper’s significant aspect is the hybrid concept that the company is conceptualizing for its future smart contracts. As the name suggests, this hybrid approach will provide the best of both worlds – security of the blockchain network and scalability of the off-chain system. The new off-chain layer will rely on the blockchain for providing secure and tempered proof operations, and all this will be done with the feature-rich and connected capability of the off-chain systems. This is expected to serve a wide variety of customers and clients by providing a novel and rich user experience through the range of new applications. The whitepaper establishes seven key goals that DONs aim to achieve, including hybrid smart contracts, the ability to abstract away complexity, scalability, confidentiality, order-fairness for transactions, trust-minimization, and incentive-based cryptoeconomic security.

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An existing example of this framework is the Chainlink Verifiable Randomness Function, offering a crucial component for any on-chain lottery that needs a trusted source of randomness. In Chainlink’s view, this reliance makes these apps an existing example of hybrid smart contracts. “The DeFi contracts, 95% of them — everything except the DEXs — are hybrid smart contracts already,” Nazarov added, referring to their use of external price feeds. Thus, DONs within the Chainlink Network serve as a secure and flexible full-stack solution for the creation of hybrid smart contracts that rely on existing on-chain code and combine it with critical off-chain computations. These hybrid smart contracts enable decentralized applications to achieve major upgrades in scalability and confidentiality, both of which are key to large-scale blockchain adoption. This growth in value derives from both economies of scale—greater per-user cost efficiency as service volumes increase—and network effects—an increase of network utility as users adopt DONs more widely.

Swift is collaborating with Chainlink and 12+ leading financial institutions to test how institutions can seamlessly interoperate with the multitude of blockchain networks emerging around the world. To empower a broad range of next-generation smart contract applications and use cases, Chainlink 2.0 focuses on oracle technology advances in seven key areas. Chainlink white paper will be going to provide you, all the information that is needed to get started with Chainlink, including the inspiration for creating, the problem it is trying to solve and the solution proposed by Chainlink.

If you don’t understand this, you do not only not understand cryptoeconomics, you also don’t understand anything about how the world works. “Boosted from a partial victory against the SEC, Ripple’s supporters are now hopeful that banks will begin to adopt XRP for cross-border transactions and other services,” Coin Metrics researchers said in July. White papers are valuable sources of information that provide in-depth analysis, research, and insights on various topics. They serve as authoritative documents that provide in-depth analysis, research, and solutions to… I am very excited to know that you are interested in this amazing technology, you will be going to amazed by the incredible potential of the blockchain. Explore recent deployments and what’s next for Chainlink’s industry-standard Web3 services, from CCIP and Data Feeds to Functions, VRF, and more.

If he/she would skim your card at the card reader and leave the country on a motorcycle the next day because they wanted to move to Argentina with their girl/boyfriend, they couldn’t make any more money cutting your hair! If they would run away with everyone’s money, they couldn’t lend out any money anymore! If they would steal everyone’s money, they lose their future gross profit vs ebitda revenues on trading fees! It means I’ll try to explain things in an as thoughtful, intuitive and simple manner as possible. If you feel at times as if I’m speaking to you as if you were a young child, or perhaps a golden retriever, this is exactly my intention. I already realize I lost most of you with the term “pedagogical”, but please stay with me, I’ll explain.

The new architecture supports a larger selection of use cases, expanding its suite of services to off-chain computation of data. In Chainlink’s vision, these computational oracles would create a class of “hybrid smart contracts” where part of the logic could be offloaded to the oracles. ChainLink is blockchain middleware that allows smart contracts to access key off-chain resources like data feeds, various web APIs, and traditional bank account payments. The Chainlink 2.0 whitepaper introduces the concept of super-linear staking, a key advancement in staking mechanism design. Super-linear staking requires an attacker to have resources greater—specifically for Chainlink, quadratically greater—than the combined security deposits of all DON nodes in order to succeed. Through a unique concentrated alerter system and a two-tier adjudication system, DONs provide greater cryptoeconomic security guarantees that overcome powerful adversaries that other systems do not protect against.

As described in the whitepaper, we believe that the growth in network security driven by virtuous cycles in Chainlink staking mechanisms exemplifies larger patterns of growth that the Chainlink network can help bring about in an on-chain economy for decentralized services. The result of this new abstraction how to buy polkastarter layer is a growing suite of Chainlink Decentralized Services that power a vast array of secure, feature-rich smart contract applications capable of supporting a much broader set of users and use cases. The certification service is used to prevent nodes from cheating with their answers.

This is completely bonkers because it assumes a completely non-cryptoeconomical adjucation layer (the second tier) to resolve disputes in the first tier. As such deviates from the entire security assumption premise of the whole chapter. The DeFi landscape is rapidly evolving and there is no guarantee that Chainlink cannot be dethroned as a dominant oracle system by a competitor in the future, or suffer some kind of error/scandal that makes people opt for other solutions. Chainlink provides developers across all major blockchains with extensive documentation, hands-on tutorials, and in-depth workshops. Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3.

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