What is a blockchain oracle and why Flux?
A blockchain oracle is a third-party service (device or entity) that provides smart contracts with information from the outside world and connects a deterministic blockchain with required data. Oracle queries, verifies, and authenticates external data sources, usually via trusted APIs and then relays that information into smart contract.
The main reason why the use of oracles is required is the decentralization of the blockchain. The fact is that in the blockchain there is no centralized source of certain data (prices, time, amount of funds, etc.), but they come to the truth using a consensus algorithm. Moreover each node in the network has to be able to find the same end result given the same input and this is especially important when interacting with smart contracts of DeFi protocols.
For example, when interacting with a decentralized exchange, we want to make a swap SOL for USDC. But how does the exchange know the true price of Solana? An exchange can choose a website or other centralized exchange as a source of price data, but how can one check the correctness of the information provided? After all, the data source may be under the control of fraudsters.
In this case, the Oracle blockchain is needed. It collects information from multiple sources and verifies it using special algorithms to provide the user with the correct information continuously and without errors.
Flux protocol — is a blockchain oracle that can solve these problems and can allow users to avoid the dangers.
“Flux is a trustless, decentralised oracle aggregator that re-engineers the way data is gathered, curated, verified and rewarded. By allowing users to decentralize their data source and oracles, Flux Protocol eliminates the single oracle problem that continues to be a lucrative target for manipulators.”
The protocol creates a decentralized infrastructure for efficient and secure interaction of smart contracts with each other, which is especially important in such a rapidly growing DeFi market.
But why exactly FLUX? FLUX is a new generation blockchain oracle that has a number of advantages over its competitors, you can learn more about them in an article on their blog, as well as see the comparative tables below:
FLUX is still a very young project that does not have its own token and is just starting its journey in the cryptocurrency market. This means that we have a chance to join its development and become a part of something great.
Thank you for your time, I hope that article was helpful for you !
With love from Makedonskiy!
