Chainlink launched a major upgrade to its Oracle network called Off-Chain Reporting, or OCR. The update was announced on Wednesday, although implementation has already been underway for some time.
Optical Character Recognition (OCR) changes Oracle’s way of communicating data from multiple sources. Previously, grouping of different dimensions for the same desired input – for example, token price – was done on a chain. Chainlink nodes will provide their individual data readings, which will be confirmed by a smart contract on Ethereum and other blockchain systems. This approach, despite the guaranteed reliability of the data, was ineffective in terms of gas costs, as each node would have to expend resources to publish the data.
The new structure replaces assembly on chain with an off-chain tour from consensus. The collected data is then transferred to the blockchain, where the smart contract confirms that a number of nodes agree with this version of the data.
Sergey Nazarov, founder of Chenlink, told Cointelegraph that the team has been working on the protocol since 2017. “Over the past year and a half, we have started to publish their best ideas and have made important changes to them,” he added.
The fastest effect of the upgrade is to reduce the fuel and load costs on the Ethereum network. The update will lead to a tenfold increase in the amount of real data that can be accessed on the blockchain, according to the team. As Nazarov explained, this increase is “partly due” to gas restrictions on the Ethereum blockchain:
“I think the trick here is that we basically want to do it in a scalable way, and we want to do it in a scalable way that works with Ethereum and many other chains. This means that during busy periods, the system should be able to continue delivering these volumes of data,” Because building such a system does not create a better structure. ”
This way, Chainlink nodes can spread more data using the previous system, even if the cost of gas makes it more difficult. Nazarov continued: “Our system must be able to function even in extreme cases, as it has been until now, better than any other revelation.” “So this is the standard that we have to meet. And if we suddenly increase the amount of data in the current system by 10 times – yes, it can work in some good conditions, and it will be very expensive, and the total cost will actually increase, which we do not believe.”
But besides the immediate effects, Nazarov believes this upgrade will have more significant consequences in the future. “You now see Chainlink evolving into something that will do more and more off-chain computing.”
While this does not mean that Chainlink will move to build missions and solutions for two groups, Nazarov said that Chainlink’s network will soon offer three different services. This includes Testable Randomness, a feature already in operation that allows DApps to have a reliable source of random numbers, which can be especially useful for gaming platforms and prediction markets. Other services that OCR supports include sentinel functions and fair sequencing, both of which solve very practical problems affecting decentralized financing.
Trustees are the kind of supervisor required in smart contract environments. For example, some contracts require periodic actions to be executed, which are usually initiated by the team or someone from the community, and formalizing this behavior is the projects that Keep3r and Fetch.ai are trying to implement.
Fair Sequencing is a proposed service aimed at fixing the initial and final value in DeFi. The problem arises when a blockchain operator can reorganize transactions for his own benefit or for the benefit of others. For example, when they see a confirmed multi-million dollar swap on Uniswap, they can quickly make a transaction to take advantage of a better rate.
The OCR system provides a lot of freedom in how calculations are performed on the Chainlink network and allows the use of new types of services that focus on processing data rather than publishing it. Nazarov said that these ideas come from very practical needs that are not met in the market today. “We usually don’t want to build those parts of the pile that we don’t need,” he said. “We want to be the maximum positive activation force for smart contracts and close all open holes in the heap.”