The idea of trust being a subjective, mediated matter has long been a barrier to the realization of the full potential of human cooperation in virtually every sector of the economy.
The financial realm is even more susceptible to issues endemic to the need for mediation and subjective nature of trust between parties; this severely hinders the development of the market and human interaction in the exchange of goods and services toward a more efficient, ‘trustless’ model.
The blockchain was called upon to solve the trust issue by offering a fully objective and independent system of trustless interaction. While the first major use case--currency and monetary value, bitcoin, etc.--of blockchain was simple to solve without a major connection to the real-world because the only connection these use cases need is the proof that computation happened on software running on computer chips around the world. But as time has gone on and the use cases of monetary value and otherwise have proliferated and evolved into things like Decentralized finance, a valid and robust connection with the real-world becomes absolutely necessary. This is where oracles come in.
They are a way for blockchains DApps to get this real-world information. However, most currently available oracles are centralized, which obviates the utility of a decentralized system when its source of data is decentralized. After all, if the centralized data is wrong, so is the decentralized (blockchain) data. A blockchain can be correct for itself, but entirely incorrect for the humans it serves. Oracle networks like ChainLink and MakerDAO have noticeable attack surfaces, as they are both tightly controlled by insiders. That makes the oracle network vulnerable to subjective manipulation and thus negates trustless interaction at the root.
The Kylin Network has recently announced the launch of the first fully decentralized oracle solution that can prove to be a breakthrough in the decentralized data market. A system of fully independent oracles makes it impossible for bad actors, manipulators, and colluders to potentially ‘game’ the system, and furthermore its innovative architecture compels the potential to drive rapid and far-reaching data validation and network effects, making it the ideal data infrastructure for both DeFi apps and a broader data marketplace infrastructure as the applications for blockchain tech rapidly expand in the coming years.
Given the development of the data economy and the growing popularity of decentralized finance applications, and in light of the failures of traditional financial instruments, the availability of a reliable and fully decentralized oracle network could be the missing link to ensuring mass adoption. The implementation of this breakthrough solution can be achieved thanks to the fact that Kylin has recently received a grant from the Web3 Foundation to help accelerate its vision. According to Polkadot, the grant program’s aim is to steward the Web 3.0 ecosystem and efficiently manage the Web3 Foundation’s resources to have the most impact on the evolution of the Web 3.0 ecosystem over the long term.
Kylin is one of the few grant winners in the highly competitive Wave 8 grant to date. By relying on Polkadot, Kylin can theoretically work on any existing chain and any new chain in the future via the novel bridge-chaining interoperability features. The connection to Polkadot will allow Kylin to elevate its project development phase to a new level and achieve the full-fledged creation of a reliable oracle network that can be used on a mass scale by the data economy and innumerable DeFi apps.
“Web 3.0 and the data economy go hand in hand, they are natural extensions of one another. But the basis for their growth is the lack of the trust factor between the interoperating parties involved. That is exactly what we are building at Kylin through our integration with Polkadot – a firm ground for a fully decentralized and independent network of oracles that will be corruption, insider and manipulation free,” as stated by Kylin CEO Dylan Dewdney.
With DeFi apps gaining popularity and the need for Web 3.0 being rushed into being by IT specialists the world over, it is becoming clear that the decentralized portion of the web will have to keep pace and Kylin may well provide the missing link.
Disclaimer: the writer does not have any relationship or vested interest in Kylin. Please consult your financial advisor before investing in or using any cryptocurrencies or cryptocurrency exchanges as both pose risk. This article is for educational purposes and does not constitute financial advice.
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