Why Chainlink needs alternatives - A look at other decentralized oracles that hold more promise

Chainlink has made a major splash in the crypto world, with a market cap in the billions and a legion of hopeful investors betting that it will be the next big thing.

These expectations are based on a fair assumption: oracles will be required in this business to give inputs from the outside world into smart contracts, and oracles will become a foundation of the blockchain ecosystem.

Despite this, the general consensus is that Chainlink will not be the future's dominating oracle.

The Problems with Chainlink

Chainlink has some immense goof-ups in achieving its vision to be an oracle for the blockchain ecosystem and they are explained below.

Chainlink Inputs Cannot be Verified Without Trust

The inputs returned by Chainlink nodes cannot be validated in an untrustworthy manner. Chainlink relies on centralized verification and dispute resolution rather than having a trustless means to verify if the information sent to you is valid or not.

Chainlink Has a Large Attack Surface

Someone recently attacked Chainlink by flooding the network with queries. By minting Chi tokens, these queries also duped Chainlink nodes into paying high gas rates. Gas fees totaled 700 ETH for Chainlink nodes as a result of the attack.

Chainlink’s Reward and Punishment Model are Decoupled

As explained above, Chainlink nodes deliver inputs into the system upon entry and provide security to reimburse requestors for erroneous information.

The Battle of the Best Oracle Solutions (The Alternatives)

There's no denying that blockchain technology and smart contracts are the world's most significant and refined advancements. They do, however, rely largely on oracle services for data. The information gathered is sometimes erroneous and untrustworthy. Data inaccuracy isn't the only issue these systems encounter. Some of these protocols also lack the bandwidth required for large-scale transactions to run smoothly.

Chainlink, for example, is widely considered a leader in the decentralized oracle sector. It could be considered a well-known oracle network. Although the oracle aims to expand the capabilities of smart contracts by allowing access to real-world data and off-chain computation while maintaining the security and reliability guarantees inherent in blockchain technology, it has a number of drawbacks, many of which other players, such as QED, are working to overcome.

QED

With an incredibly strong economic model linking numerous blockchains, smart contract platforms, and off-chain data sources, QED is capable of filling the vacuum in the crypto market. QED is positioned to be steps ahead of Chainlink in terms of oracle accuracy, finality, decentralization, resilience, security, and other critical criteria, and it is reasonable to conclude the protocol is a great alternative.

In terms of finality, QED can give data refresh rates of 0.5s, whereas Chainlink's typical refresh rate is 120s. This is even faster than new oracle protocols like SupraOracles, which have finalities of only 3-5 seconds. Rather than limiting the number of decentralized applications that can deploy services that require lower data finality or faster refresh rates, QED allows for more demanding financial market applications and more automated high-frequency applications to exist, which are expected in the machine-to-machine economy (IoT).

Chainlink stopped delivering data during the Crypto Black Thursday event. This means that the oracle protocol may fail to provide reliable on-chain data feeds in unfavorable situations, but this is not the case with QED. According to reports from observations, the QED alpha product, termed the DelphiOracle software, was the only oracle software to serve during the Crypto Black Thursday event, demonstrating a strong resilience.

The DelphiOracle programme, in particular, has never been compromised. The systems have provided over 25 million data points to multiple blockchains and are developed with security in mind. QED's execution is intended to be adaptable and practical. QED may connect oracle to smart contracts within a risk framework with financial and commercial logic because it is a multi-blockchain. It can also avoid recursive congestion and find the best execution venue. For decentralized Oracles, QED is positioned to be a viable alternative to Chainlink. It's a promising protocol to keep an eye on.

SupraOracles

SupraOracles is a powerful cross-chain oracle network to bridge real-world data to both public and private chains. Businesses and projects relying on this technology can enable interoperable smart contracts to automate, simplify, and secure the future of financial markets.

Their all-in-one solution is powered by a decentralised EVM-compatible cross-chain oracle that connects public and private blockchains with real-world data. Smart contracts will be able to better automate procedures and give enhanced security to consumers as a result.

SupraOracles delivers data directly on-chain, providing a fully decentralised, scalable, safe, and quick platform that goes beyond the DeFi area by broadening the use case of smart contracts.

The SupraOracles network also has a Multi-Helix Ledger (MHL) named "Unitychain," which allows for increased scalability and security without sacrificing network uptime. It also enables for simultaneous processing of nodes to ensure that only the appropriate nodes are involved in the consensus process. To improve security, this technology also allows for threshold cryptography and random sampling.

Razor Network

Razor Network is a decentralized oracle project that works on the Ethereum network, but it is not intended for Ethereum mainnet applications. Instead, it will work with a number of L1 and L2 blockchains to remedy the situation. The platform has a fully decentralized oracle and can connect smart contracts to data in a quick and secure manner. The testnet for the flagship product, the decentralized oracle network, has been created and the company has also provided a testnet browser for surfing testnet data.

Razor provides maximum game theoretical security to ensure that external data feeds to Algorand's blockchain are as safe and reliable as the network itself. Razor's end-to-end decentralised Oracle network is secured by a highly efficient Proof of Stake network that punishes disobedient nodes with a stringent Slashing mechanism.

Band Protocol

Founded in 2017 by MIT graduates Paul Nattapatsiri, Soravis Srinawakoon, and Sorawit Suriyakarn, Band Protocol (BAND) can be considered Chainlink’s closest rival project.

A major differentiating feature of Band Protocol is the fact that it is compatible with different blockchains, i.e., it is essentially a blockchain-agnostic protocol.

Although Band first launched in October 2019 on the Ethereum blockchain, it was relaunched in June 2020 on Cosmos (ATOM) with improved features and capabilities.

Furthermore, the debut of Band Protocol 2.0 on Cosmos saw the introduction of instant finality, a Cosmos-specific feature that eliminates the need to wait for multiple blocks to be generated to certify the authenticity of any given transaction. The concept of instant finality, for example, is absent from the Bitcoin and Ethereum networks.

Band is a cross-chain oracle protocol that is utilised by decentralised applications (dApps) on Ethereum, Cosmos, and other smart contract platforms. Furthermore, with Ethereum's escalating gas rates, it won't be long before projects based on other layer-1 solutions, such as Solana, Cardano, and Fantom, use Band oracles.

The native token BAND of the Band Protocol is important to the operation of the oracle service since it is utilised as an incentive for node validators to build new blocks and certify the data's trustworthiness.

DotOracle

It allows information to be seamlessly transferred between parachains, effectively solving the blockchain scalability problem.

DotOracle is the link between a real-world data source and Moonbeam and DeFi protocols' smart contracts, which are based on blockchains, particularly Ethereum. By combining a decentralised oracle with Moonbeam parachain, the goal is to blur the line between off-chain data sources and information within blockchains. It also enables the platform to provide a reliable and consistent data source for smart contracts.

DotOracle is exceptionally quick thanks to automated real-time data retrieval without compromising security. Furthermore, an end-to-end decentralised oracle network really decentralises the system. The platform secures the network by employing the Practical Byzantine Fault Tolerance distributed consensus mechanism and enforcing stringent penalties for misconduct. To reduce delay and boost the oracle's encryption and decryption performance, DotOracle uses the Elliptic Curve (EC) Multisignature technique. DotOracle is particularly transparent due to its interaction with the Polkadot-powered Moonbeam parachain.

Closing Thoughts

The crypto industry's future is multi-chain, so it's reasonable to predict that the blockchain oracle field will be dominated by protocols like Chainlink, Band Protocol, DIA, and others to cater to an industry with numerous blockchains powering the smart contract economy.

Furthermore, relying on a single blockchain oracle provider for data feeds could have serious consequences for projects, such as wasteful liquidations, erroneous data, and other undesirable results.

This makes it advisable for dApps to have various blockchain oracle protocols available for data retrieval, bolstering the case for numerous blockchain oracle protocols coexisting in the crypto sector.