Chainlink releases new white paper in a shift toward smart contract computations

We’re confident that Chainlink will enable smart contracts to take the next major leap in their evolution, powered by a hybrid on-chain/off-chain architecture. The result of this new abstraction layer is a growing suite of Chainlink Decentralized Services that power a vast array of secure, feature-rich smart contract applications capable of supporting a much broader set of users and use cases. The vision document presents in detail the company’s future ambitions, specifically focused on creating the network of decentralized oracle solutions that will enable the creation of a decentralized metalayer. This metalayer will be instrumental in enhancing the smart contracts with off-chain computations that are secure and confidential while at the same time highly scalable in nature. This will be in addition to the external data that is already available on the Chainlink.

There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. Sergey Nazarov, Co-Founder of Chainlink, a Web3 services platform, says blockchains are AI resistant because they are built to resist adversaries. «Public network infrastructure provisioning has been a core business model of telco companies for decades. Providing critical Web3 infrastructure by running Chainlink oracle nodes has enabled new revenue streams and opened the door to Web3 opportunities.»

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The original Chainlink whitepaper pioneered decentralized oracle networks, generally seen as a way to feed external data into the blockchain in a secure and reliable manner. This new definition significantly expands the scope of oracle networks to include not only data delivery, but also any form of off-chain computation as well as any other decentralized service that blockchains do not provide. The foundation for achieving this goal takes the form of Decentralized Oracle Networks (DONs), a new type of oracle network purpose-built to meet the scalability, connectivity, and privacy needs of existing and future smart contract applications. Today, the solution to this problem is to introduce a new functionality, called an oracle, that provides connectivity to the outside world.

Understanding that some users won’t feel comfortable with a single entity (ChainLink, in this case) controlling smart contract migration and forwarding, the power to utilize this service remains with the smart contract creator. By providing smart contracts secure access to these key resources, ChainLink allows them to mimic real world agreements that require external proof of performance and need to make payment in widely available payment methods e.g. bank payments. The worldwide bank messaging system Swift has launched a set of experiments in partnership with decentralized oracle network provider Chainlink to examine more closely how major financial institutions might integrate with blockchains. In their whitepaper, the team also introduced a proposed improvement to Chainlink’s staking design dubbed «super-linear staking». Someone who wanted to attack the network under this mechanism would have to amass resources greater than all of the DON node security deposits combined. Chainlink unveiled its new white paper on Thursday, which details a planned expansion and pivot into creating oracle networks for computation.

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Contributing authors Ari Juels, Lorenz Breidenbach, Andrew Miller, and Sergey Nazarov dive into the technical advancements of the whitepaper and discuss Chainlink’s overarching vision for the future of decentralized oracle networks. This whitepaper expands the role of Decentralized Oracle Networks (DONs) in the blockchain ecosystem, laying out the key advancements for the Chainlink Network to power a suite of decentralized services for smart contracts on any blockchain. The whitepaper further suggests that there will be a new architecture for building hybrid smart contracts, which will provide upgrades in scalability and confidentiality for decentralized applications (dApps). ChainLink is blockchain middleware that allows smart contracts to access key off-chain resources like data feeds, various web APIs, and traditional bank account payments.

Mirroring could also be used by compromised nodes to obtain their data from one another, instead of querying a data source individually. The long-term plan against both attacks is to utilize trusted hardware (Intel SGX), but until then, the certification service will detect and help prevent these attacks by issuing endorsements of high-quality oracle providers. These endorsements would be based on the node’s rating within the validation system and would perform spot-checking of answers compared to other trusted nodes.

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Any smart contract using such services has a single point of failure, making it no more secure than a traditional, centrally run digital agreement. We describe the on-chain components that ChainLink provides for contracts to gain external connectivity, and the software powering the nodes of the network. We present both a simple on-chain contract data aggregation system, and a more efficient off-chain consensus mechanism. We also describe supporting reputation and security monitoring services for ChainLink that help users make informed provider selections and achieve robust service even under aggressively adversarial conditions. Finally, we characterize the properties of an ideal oracle as guidance for our security strategy, and lay out possible future improvements, including richly featured oracle programming, data-source infrastructure modifications, and confidential smart-contract execution. With the specific focus on confidentiality and scalability, DONs are touted to be a game-changer for the entire blockchain domain.

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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Ensure nodes in decentralized oracle networks have strong economic incentives to behave reliably and correctly, even in the face of well-resourced adversaries. DON will operate off-chain wherein data within the smart contracts are stored and computed off-chain. “We’re evolving from simpler oracle networks into more advanced Oracle networks called DONs, and then a large collection of DONs will form a MetaLayer,” said Nazarov. In the Chainlink 2.0 vision, multiple interoperating DONs can transfer data bidirectionally and perform decentralized off-chain computation using various consensus protocols. Chainlink today enjoys a dominant position in the solutions related to the decentralized oracle. The company released its original white paper around 3 years back and offers many solutions in a wide variety of domains, including the likes of decentralized finance (DeFi), non-fungible tokens (NFTs), gaming, and insurance.

While it’s been no small feat to get to this point, we have only scratched the surface of what’s possible with decentralized oracle networks and the smart contracts they support. Chainlink’s decentralized metalayer of oracle networks allows smart contracts to seamlessly use and create an array of decentralized services that accelerate dApp development, enable bipcoin cross-chain functionality, and harmonize disparate technologies. The new whitepaper’s significant aspect is the hybrid concept that the company is conceptualizing for its future smart contracts. As the name suggests, this hybrid approach will provide the best of both worlds – security of the blockchain network and scalability of the off-chain system.

The much-anticipated Chainlink 2.0 whitepaper is an exciting 136-page look at the next few years of innovation from Chainlink, including new concepts like super-linear staking, Keepers and Fair Sequencing Service (FSS). Chainlink integrated with 36 teams, rounding out the month by announcing that a Chainlink Community Grant will be awarded to support the UNICEF Innovation Fund and the UNICEF CryptoFund. The Chainlink 2.0 whitepaper was written by a team of world-class academic researchers specializing in fields like security, cryptography, distributed systems, game theory, mathematics, and various other computer science related disciplines.

• In the past, the Paxos stablecoin operator has already implemented these smart contracts.
• I don’t plan on going in any particular order (what fun would that be?) since much of the white paper can be read from any point as long as you have a general understanding of what ChainLink is doing.
• The total number of completed requests includes all past requests and can be averaged with the assigned requests to make a completion rate for the node.
• We describe the on-chain components that ChainLink provides for contracts to gain external connectivity, and the software powering the nodes of the network.
• The 2.0 whitepaper of the Chainlink proposes decentralized oracle networks (DONs) that can perform multiple tasks in an interoperable manner.

The reputation system keeps track of a node’s total number of assigned, completed, and accepted requests, the average time to respond, and the amount of penalty payments. The total number of assigned requests includes both the fulfilled and unfulfilled assignments (in case the node is still executing an assignment). The total number of completed requests includes all past requests and can be averaged with the assigned requests to make a completion rate for the node. The total number of accepted requests is the number of requests that have been accepted when comparing to the node’s peer responses. And finally, the amount of penalty payments shows how much a node has locked into its assignment. The overall purpose of the reputation system is to provide incentive for nodes to product honest data in a timely manner so that they may be chosen more often.

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Use a decentralized network of Chainlink Automation nodes to automate contracts, mitigating risk of manual interventions and centralized servers. Build on a flexible framework that can retrieve data from any API, connect with existing systems, and integrate with any current or future blockchain. The Smart Contract Research Forum is an intellectual commons for academic researchers, software engineers, and industry leaders to collaboratively define, design, and advance smart contract technology.