Ethereum's decentralized network and its smart contracts are completely isolated from the real world. This isolation ensures consistency, security, and integrity. However, this also poses a limitation: these smart contracts cannot access or validate external data on their own. So, what if the execution of a contract depends on the current price of gold, weather conditions in a particular city, or election results?
Oracles fill this gap. As messengers, they collect, validate, and deliver real-world information to smart contracts, thereby expanding the range of possibilities for decentralized applications.
Imagine the following situation:
Solidity
//A mock smart contract follows external data
contract GoldPriceBet {
Oracle OracleInstance;//An Oracle instance real-time gold instance
address bettor;
uint256 wagerAmount;
Function placeGoldPriceBet (uint PredictedPrice) external payable {
bettor = msg.sender;
wagerAmount = msg.value;
// Here, we would typically invoke the oracle to fetch the current gold price
}
}
Code comments:
OracleInstance;
This is a placeholder for our GoldPriceBet
contract to interact with to obtain the current price of gold (Oracle) contract.placeGoldPriceBet function allows users to place bets to predict the price
of gold. Ideally, after placing a bet, the oracles would be called to get the real-time price of gold and determine the results.Broadly speaking, oracles fall into two main categories:
Operated by a single entity or organization, centralized oracles are efficient and can obtain data quickly. Their Achilles' heel, however, is trust. The execution of smart contracts depends on the integrity of this centralized entity. Manipulated or erroneous data may lead to unexpected results.
In order to mitigate the shortcomings of centralized systems, decentralized oracles have sprung up. Here, a network of multiple oracles provides data. A smart contract may use an aggregation method, such as an average or median, to arrive at a value. By decentralizing data sources, these oracles reduce the risk associated with human manipulation or single points of failure.
Solidity
//An illustrative smart contract leveraging a flexible Oracle framework
contract CommodityPriceFeed {
Decentralized Oracle [] OracleArray;//An array of decentralized oracles
function deriveAveragePrice () external view returns (uint256) {
uint256 cumulativeValue = 0;
for (uint i = 0; i < oracleArray.length; i++) {
cumulativeValue += oracleArray[i].fetchPrice();
}
return cumulativeValue/ oracleArray.length;
}
}
Code comments:
DecentralizedOracle [] OracleArray; this is an array that stores multiple instances of decentralized oracles
.The
deriveAveragePrice
function calculates the average price obtained from all oracles in OracleArray. It goes through each of the oracles, gets the price, and then divides it by the number of oracles to get the average.The potential applications of oracles are very broad and diverse:
Financial platforms require real-time information on asset prices, interest rates, or other economic indicators. Decentralized derivatives platforms use oracles to ensure that contracts, such as futures and options, are settled based on accurate, tamper-proof market data.
Solidity
SolidityCopy code
//An example smart contract for a convenient option
contract DecentralizedOption {
Oracle PriceOracle;
uint256 strikePrice = 1000;//Example value
function exerciseOption () external {
uint256 currentPrice = priceOracle.fetchCurrentPrice ();
if (currentPrice strikePrice>) {
// Logic to exercise the option
}
}
}
Code comments:
DecentralizedOption
contract interacts with the oracles to obtain the current price.Oracles have promoted the development of decentralized insurance platforms, providing data such as weather patterns required for crop insurance, flight conditions required for travel insurance, or seismic activity required for earthquake insurance.
Solidity
contract FlightDelayInsurance {
Oracle FlightStatusOracle;
function claimInsurance (string flightNumber) external {
string status = flightstatusOracle.getFlightStatus (flightNumber);
if (strcmp (status, " Delayed") == 0) {
// Logic to compensate the insured
}
}
}
Code comments:
FlightDelayInsurance
contracts use oracles to obtain flight status.For decentralized supply chain solutions, oracles can provide verifiable data at every stage, from raw material procurement to product delivery, to ensure product authenticity and ethical procurement.
Solidity
contract supplyChainTracker {
Oracle LocationOracle;
address ProductOwner;
function verifyProductLocation (address ProductID) external view returns (string memory) {
return locationOracle.fetchProductLocation(productID);
}
}
Code comments:
Games that integrate real-world events, such as the results of sporting events or stock market movements, can be built in a decentralized manner by using oracles to obtain the necessary data.
Solidity
Contract SportsBet {
Oracle SportsResultOracle;
Function placeBet (string teamName) external payable {
// Logic for placing a bet
}
function resolveBet () external {
string winningTeam = sportsResultOracle.getMatchResult();
// Logic to reward winners based on the outcome
}
}
Code comments:
SportsBet
allows users to place bets on the results of sporting events.Ethereum's decentralized network and its smart contracts are completely isolated from the real world. This isolation ensures consistency, security, and integrity. However, this also poses a limitation: these smart contracts cannot access or validate external data on their own. So, what if the execution of a contract depends on the current price of gold, weather conditions in a particular city, or election results?
Oracles fill this gap. As messengers, they collect, validate, and deliver real-world information to smart contracts, thereby expanding the range of possibilities for decentralized applications.
Imagine the following situation:
Solidity
//A mock smart contract follows external data
contract GoldPriceBet {
Oracle OracleInstance;//An Oracle instance real-time gold instance
address bettor;
uint256 wagerAmount;
Function placeGoldPriceBet (uint PredictedPrice) external payable {
bettor = msg.sender;
wagerAmount = msg.value;
// Here, we would typically invoke the oracle to fetch the current gold price
}
}
Code comments:
OracleInstance;
This is a placeholder for our GoldPriceBet
contract to interact with to obtain the current price of gold (Oracle) contract.placeGoldPriceBet function allows users to place bets to predict the price
of gold. Ideally, after placing a bet, the oracles would be called to get the real-time price of gold and determine the results.Broadly speaking, oracles fall into two main categories:
Operated by a single entity or organization, centralized oracles are efficient and can obtain data quickly. Their Achilles' heel, however, is trust. The execution of smart contracts depends on the integrity of this centralized entity. Manipulated or erroneous data may lead to unexpected results.
In order to mitigate the shortcomings of centralized systems, decentralized oracles have sprung up. Here, a network of multiple oracles provides data. A smart contract may use an aggregation method, such as an average or median, to arrive at a value. By decentralizing data sources, these oracles reduce the risk associated with human manipulation or single points of failure.
Solidity
//An illustrative smart contract leveraging a flexible Oracle framework
contract CommodityPriceFeed {
Decentralized Oracle [] OracleArray;//An array of decentralized oracles
function deriveAveragePrice () external view returns (uint256) {
uint256 cumulativeValue = 0;
for (uint i = 0; i < oracleArray.length; i++) {
cumulativeValue += oracleArray[i].fetchPrice();
}
return cumulativeValue/ oracleArray.length;
}
}
Code comments:
DecentralizedOracle [] OracleArray; this is an array that stores multiple instances of decentralized oracles
.The
deriveAveragePrice
function calculates the average price obtained from all oracles in OracleArray. It goes through each of the oracles, gets the price, and then divides it by the number of oracles to get the average.The potential applications of oracles are very broad and diverse:
Financial platforms require real-time information on asset prices, interest rates, or other economic indicators. Decentralized derivatives platforms use oracles to ensure that contracts, such as futures and options, are settled based on accurate, tamper-proof market data.
Solidity
SolidityCopy code
//An example smart contract for a convenient option
contract DecentralizedOption {
Oracle PriceOracle;
uint256 strikePrice = 1000;//Example value
function exerciseOption () external {
uint256 currentPrice = priceOracle.fetchCurrentPrice ();
if (currentPrice strikePrice>) {
// Logic to exercise the option
}
}
}
Code comments:
DecentralizedOption
contract interacts with the oracles to obtain the current price.Oracles have promoted the development of decentralized insurance platforms, providing data such as weather patterns required for crop insurance, flight conditions required for travel insurance, or seismic activity required for earthquake insurance.
Solidity
contract FlightDelayInsurance {
Oracle FlightStatusOracle;
function claimInsurance (string flightNumber) external {
string status = flightstatusOracle.getFlightStatus (flightNumber);
if (strcmp (status, " Delayed") == 0) {
// Logic to compensate the insured
}
}
}
Code comments:
FlightDelayInsurance
contracts use oracles to obtain flight status.For decentralized supply chain solutions, oracles can provide verifiable data at every stage, from raw material procurement to product delivery, to ensure product authenticity and ethical procurement.
Solidity
contract supplyChainTracker {
Oracle LocationOracle;
address ProductOwner;
function verifyProductLocation (address ProductID) external view returns (string memory) {
return locationOracle.fetchProductLocation(productID);
}
}
Code comments:
Games that integrate real-world events, such as the results of sporting events or stock market movements, can be built in a decentralized manner by using oracles to obtain the necessary data.
Solidity
Contract SportsBet {
Oracle SportsResultOracle;
Function placeBet (string teamName) external payable {
// Logic for placing a bet
}
function resolveBet () external {
string winningTeam = sportsResultOracle.getMatchResult();
// Logic to reward winners based on the outcome
}
}
Code comments:
SportsBet
allows users to place bets on the results of sporting events.