What is an Oracle Project (What is Oracle Nest)?

What is an Oracle Project? The blockchain world is undergoing tremendous changes. From Bitcoin, Ethereum to Litecoin, everyone wants to know who has the most advanced smart contract technology and algorithms, and all of these require trusted intermediaries (such as centralized exchanges). How does an Oracle project work? What is an Oracle project? Why is token issuance necessary? In the traditional financial field, there are many types of data providers: stock fund managers, HSBC or US Treasury derivative companies; government securities brokers, and some large financial technology companies.

However, in the cryptocurrency industry, there are some flaws in existing Oracle solutions—for example, opaque price data. Therefore, when it comes to a protocol, information must be sent to another protocol to ensure the security and stability of the network.

If you want to obtain an asset, you need to create a pricing model for the platform based on on-chain price data sources. This process consumes a large amount of computing resources to ensure the accuracy and reliability of the price; then, this also exhausts the entire system. This creates a “market effect” that enables predictability in transactions.

But the reality is, despite this, “market advantages” are still limited. Due to the uniqueness and immutability of blockchain technology, anything can become possible and automatically adjust parameters based on specific market conditions. So for most DeFi applications, it is basically a risk-free and unregulated product.

So, what type of token issuance is secure? We can define it simply: the term “Oracle” consists of three parts: input method and output terms, which correspond to information from an external source, some form of external service, or other external demands.

Users usually use an address to request something from another third party, and then return the corresponding address to obtain the required real-world data.

To solve this problem, “Oracle” is a new mechanism based on blockchain technology that uses various forms of Oracle as middleware. Using smart contracts on the blockchain, certain functions can be called off-chain, such as paying fees and other complex functions. For example, when one party responds to a message, the recipient receives a price feed (tokens) containing the original data, and once they receive the data, they can withdraw the value they provided at any time while maintaining a certain balance.

In addition, data from multiple sources can be accessed through smart contracts. For example, Chainlink’s ChainLinkPriceFeeds are used to generate Oracle results and transmit them to other blockchain networks.

The Chainlink Oracle Network then focuses on verifying and storing the results of all relevant events and connecting them. The Chainlink Oracle is also committed to developing an API with high latency.

What is Oracle Nest?

Oracle Nest is a decentralized Oracle network developed by Chainlink. It allows smart contract applications to perform data verification off-chain and provide feeding services for pricing based on demand, enabling DeFi protocols to use this information to build price reference models for their products.

Currently, the types of Oracle mainly include: trustless applications, blockchain, and NEST Protocol Oracle. The NEST protocol will connect with multiple external quoting pools through an open interface (API) to facilitate users obtaining real market prices directly from various sources, such as prices from other exchanges and data from a specific project. The NEstProtocol adopts a hybrid approach to combine two quoting pools, namely nestPricePools-a and nestMarketPlace. Both mechanisms support nest price, making nest more secure and powerful than traditional Oracles.