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Unlocking the potential of blockchain by overcoming its current data limitations
While the blockchain industry has evolved tremendously over the past decade, one of the most significant obstacles that developers and innovators in this space have faced is the limited variety of decentralized data available on-chain. This constraint has had far-reaching implications, making it difficult to create decentralized applications (dApps) that can have a meaningful impact on people’s daily lives.
To elaborate, most blockchain networks today tend to operate in isolation from the outside world, creating a data vacuum that severely limits the types of applications that can be built, while also resulting in a paucity of diverse and real-world data available on-chain. This segregation is a double-edged sword because, while it provides security and immutability, it also limits the ability of the blockchain to interact with and reflect the real world.
It also forces many of DeFi’s current use cases to focus on financial speculation, hindering broader adoption of blockchain technology while limiting its potential to transform industries beyond cryptocurrency trading and investing.
Bridging the data gap, one step at a time
Recognizing the critical need for truly decentralized and real-world data on blockchain networks, several projects have recently emerged. For example, The Graph focuses on indexing and querying blockchain dataBy enabling developers to create information sets that define how to extract and organize data from various blockchains, it helps improve the efficiency and usability of today’s dApps.
Similarly, the Band protocol provides scalable cross-chain data oracles by aggregating and verifying data from multiple sources. Another interesting approach has been taken by the Ocean Protocol, which aims to create a decentralized marketplace for dataparticularly for AI and blockchain applications.
That said, while these projects have undoubtedly made strides in improving the accessibility and reliability of data on blockchain networks, they still only address some aspects of the above dilemma, and thus fail to provide a comprehensive solution.
Amidst the turmoil, Flare Network emerged as a standout for its innovative and comprehensive approach to addressing these bottlenecks. Flare can be described as a Layer 1 (L1) network that solves today’s data acquisition problems by eliminating the need to rely on third-party oracles, which can often be centralized.
Flare’s two primary data acquisition tools include ‘Flare Time Series Oracle’ (FTSO) and a module called ‘State Connector’. To be more precise, FTSO provides highly decentralized time series data feeds to various dApps and is particularly useful for frequently changing information, such as the prices of different cryptocurrencies. It calculates estimates for each time series by aggregating data from about 100 independent providers, incentivized to provide accurate information.
On the other hand, the State Connector allows Flare to reach a secure, trustless consensus on events that have occurred outside the network. This could include verifying transactions on other blockchains or accessing content from Internet APIs. This ability to bring off-chain events onto the blockchain is set to be a game-changer for blockchain interoperability and real-world data integration.
In addition to this, Flare has also developed a digital framework called ‘Activity,’ allowing blockchain tokens without smart contract capabilities (such as Bitcoin or Dogecoin) to be used natively with smart contracts in a non-trusted manner. Finally, the project also offers a decentralized bridging system called ‘Layer Cakedesigned to ensure secure and efficient interoperability between different smart contract networks.
By providing developers with efficient access to a wide range of decentralized data at minimal cost, Flare Network is poised to unlock new possibilities for blockchain applications. This expanded data access can drive the development of more sophisticated use cases in areas such as DeFi, gaming, NFTs, real-world assets (RWA), and even machine learning (ML) and artificial intelligence (AI).
Imagining a Data-Rich Future
As is probably clear by now, the limited availability of diverse and real-world data on blockchain networks has been a major obstacle to the widespread adoption and utility of blockchain. However, with a number of new offerings poised for the future that pave the way for access to a wide range of off-chain data, it is not unreasonable to suggest that the next phase in cryptocurrency evolution could be upon us.
Going forward, the ability to seamlessly integrate real-world data into complex blockchain processes will be crucial to unlocking the technology’s full potential. In this context, offerings like Flare aren’t just solving a technical problem; they’re opening the door to a future where blockchain can truly transform industries and significantly improve our daily lives.
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