The latest reports reveal that a community-verified oracle platform strives to better accuracy offered by Chainlink. The decentralized finance (DeFi)-focused oracle platform DIA is reportedly using crowd-sourcing to boost the accuracy of price oracles.
Oracle platforms provide links between trusted sources of real-world data and blockchain smart contracts. Oracle platforms are a critical component of most DeFi applications. With the explosive surge of Chainlink (LINK) in 2020, many might believe that it has the market all sewn up.
However, the DeFi-focused challenger DIA (Decentralised Information Asset) alleges that its community-authenticated data points can enhance Chainlink’s accuracy. CEO Michael Weber gave an exclusive chat about why DIA is different just before the platform’s token distribution starting August 3.
Crowd-Sourced Oracle Platform
Swiss-based DIA was launched in 2018 on the back of a demand for more accessible and transparent data solutions across the entire digital asset and traditional finance space. Instead of offering data points and oracles itself, this platform lets the community to source and authenticate data via crypto-economic incentivization:
“DIA sets out to democratize financial data, similar to what Wikipedia has done in the broader information space with regards to a central encyclopedia.”
It offers constant incentives to deliver top-quality data streams and to scrutinize and enhance existing solutions. On the contrary, Chainlink normally takes prices from a few places which may result in inaccuracies.
An Oracle Delivering Future Potential
Currently, oracle platforms are big news. They have value locked in DeFi platforms hitting all-time highs as the crypto space jumps into life. However, Weber thinks that those may even go further to become comparable to the traditional financial markets:
“The growth of oracle solutions will be strongly dependent on the growth of DeFi applications, while the growth of DeFi applications, in turn, will be strongly dependent on the level of quality and transparency that oracle solutions deliver.”
Open data offered by these oracles provides the critical building block of the whole space according to Weber.
Token Distribution Through Bonding Curve Model
The DIA token distribution is also designed to differ from the traditional token sales since it keenly follows the bonding curve model that was previously used by Uniswap and Bancor.
This essentially pre-defines the relationship that exists between price and supply for the offering period; with an asset that can be bought from, and also sold back to, a smart contract. If the price rises then so does the demand and vice-versa:
“This means that the market determines the price of the token according to the demand for it; instead of the team defining this itself. We think this method is a fairer distribution mechanism for digital assets and will continue to evolve.”