Imagine creating a blockchain-powered fantasy baseball DApp that integrated real-world MLB statistics into non-fungible tokens (NFTs) that represent players. These NFTs would periodically update, reflecting the real-world performances of the players represented. Pretty cool, right?
For this to work, the blockchain network’s smart contracts would need to communicate with off-chain data and systems — in this case, MLB. Decentralized blockchain networks lack the means to interact with outside data.
Enter the oracle. Oracles provide a bridge between a blockchain network and the outside world, opening up the former to data from the latter.
“Oracles are radically important,” writes The CoinTelegraph. “Just like the ancient stories could never have occurred without proper external information, smart contracts cannot function without some data source. Without access to these sources of information, use cases for smart contracts drop to just a tiny fraction of their potential.”
Of course, you’ll want to make sure your oracle is safe, reliable and trustworthy.
Which is why ICON’s recently announced collaboration with Chainlink is such a big deal.
Chainlink is one of the blockchain industry’s leading oracle solutions, trusted by the likes of Google, Oracle and SWIFT. Chainlink’s decentralized oracle network overcomes the single-point-of-failure problem that centralized solutions face, ensuring end-to-end security and reliable connectivity to the external data on which smart contracts depend, including data providers, web APIs, enterprise systems, cloud providers, IoT devices, payment systems and other blockchains.
The possibilities unleashed are endless.
ICON developers could use Chainlink to bring real-world pricing data from traditional markets to create decentralized financial products such as variable-rate blockchain-based bonds, or use it to trigger a payment on the ICON blockchain after confirming a payment occured on the Ethereum blockchain.
“The initial implementation of Chainlink on ICON will be an ICX/USD pricing oracle that can be utilized by any ICON DApp,” says the ICON Foundation on its Medium page. “This integration will allow ICON Dapps to easily build financial products and market places based on the USD equivalent of ICX. The possibility of decentralized applications that leverage off-chain data and systems is limitless, and we look forward to seeing what people decide to build using both ICON and Chainlink!”
If you’d like to learn more, ICON is hosting the joint meet-up “Visualizing Public Blockchain: Finance, Oracles, and Interchain” at the ICON Lounge in Seoul on Feb 11. Participating in the discussion will be Kim Jin-woo, General Manager of the Korean Community of MakerDao; Yeongin Lee, Korea lead for Chainlink; and Bongan Ha, Cryptoeconomic architect of ICON.