Make sure to read to the end to discover how to participate in the verifiably fair Ontropy game launched yesterday.
The misconception is that oracles are useful because they put data on a chain. It is the same way we once thought about banks and money. In reality, oracle networks have no divine right or special ability to upload the data we need to chain.
Since the rise of Chainlink, there have been dozens of attempts to take down the giant. But all others have fallen into the same custodial, third-party approach, so the king still stands.
Ontropy solves the oracle problem and eliminates the billions of dollars in exploits by doing to data what blockchain did to money: we let the end users validate it.
Ontropy is eliminating third-party oracles through user-validated data.
The problem is that oracles, like ChainLink, are centralized. This leads to 12-second latency, a hundred million gas fees, and billions of dollars in exploits.
So, how do we solve it? By eliminating the third-party oracle and middleman and allowing users to validate the data themselves directly. There is a misconception that oracles are useful because they put off-chain data on the chain. This is untrue. Anyone can put off-chain data on-chain. I can put that information on the chain myself if we do a transaction.
The problem is that my counterparty will not trust me, and vice versa. This is why we use an oracle; it is a source that puts off-chain data on-chain and is trusted. But when you have trust, you risk those you give it to breaking that trust. And that’s why we lost $3 billion in oracle exploits last year.
So, I said we couldn’t put the data on-chain ourselves because we cannot trust each other, as we do not have aligned incentives. But what if we could? What if we could trust each other and have aligned incentives? This is what Ontropy does. We use two mechanisms, one theoretical game to eliminate third parties and one cryptographical to remove counterparty risk. This is called Proof of Result.
Essentially, just me and you verify the data, exchange some proof of our agreement, and put it on the chain ourselves. We’ve killed third-party oracles and the cost, latency, and exploitations that come with them.
If we’re swapping and agreeing to the price ourselves, that’s great. We’ve eliminated oracles for our transactions. We’ve also implicitly validated the price we agreed to up to the value of the transaction. For example, if we traded 5 ETH at a price of $1,600, we can say that the data has $8,000 of volume.
If others implement this process to reduce latency and prevent exploitations for their purposes, then we have effectively created a constant stream of user-validated data. We have crowd-sourced price feeds and natively brought asset prices on the chain. The chain then becomes the reference point for the data itself. No more oracles.
As promised, here is how you can test Alpha 2 right now! Anyone with a MATIC wallet and a desktop can play the verifiably fair casino game at: https://alpha.ontropy.io/app#/play/roulette. Here’s a How-To guide.