The world has completely emerged into the blockchain technology which transforms businesses more reliably and secured based on frameworks. It is not always about dealing with Bitcoin blocks and a number of bitcoins to be transferred. A perfect example for this is decentralized finance (DeFi) which does not rely on central financial intermediaries. Considering this as a prominent factor, today’s world is shifting towards DeFi from the concept of centralization.
Centralization is managed by trusted entities or financial sectors where users may feel secure but it does not allow users to control or monitor. In order to avoid these issues regarding security and trustable entities, major platforms are shifting towards decentralization. This concept may help in providing an environment to the users where their data and assets are not maintained by a single authority. This concept is managed by a group of entities with high security and ensures complete control of data.
Significantly, Defi applications use blockchain and smart contracts to provide decentralized, peer-to-peer, and a transparent system. They rely on a large amount of external data into the blockchain in order to function, such as live currency values for real-time settlement, weather data for insurance with farmers, inflation data, and so on. However, accessing and transferring trusted data from the outside world onto the blockchain is a challenge. This is where Oracle comes in.
Additionally, Oracle bridges between blockchain smart contracts and external data sources in a traditional way using API to fetch data. Oracle obtains data from trusted sources and delivers it to the user via the blockchain application. Not every oracle will succeed in acting as a bridge between blockchain and external data sources. The primary feature in oracle is a decentralized infrastructure that ensures reliable data source.
Plugin On XinFin Ecosystem
XinFin ecosystem uses a decentralized oracle platform, Plugin, which offers cheap solutions for any smart contract on the network. Plugin connects the smart contract to the real-time world and ensures that the data it receives from the data feed provider is trustworthy by maintaining a high level of security. It handles off-chain computation by receiving feed from different providers and aggregating it.
GoPlugin.co collects data from various external sources, consolidates it, and ensures that the accurate value is provided to its users at all times. Moreover, PLI token in Plugin ecosystem is a powered token which is built on XinFin’s XRC20 Standard. It was developed mainly to reduce gas fees, increase transaction speed, and to deliver hundreds of Dapps with the ability to connect to Data Oracle and reach millions of individuals globally.
To avoid security problems but provide a blockchain peer-to-peer system, any decentralised oracle provider must depend on the community to select data sources and validators, as well as the rewarding and penalizing mechanism. Besides, Plugin employs a carrot-and-stick strategy to reward the best while penalizing the weakest actors. Furthermore, the primary factor using Plugin is it provides data feeds at a very low cost compared to other oracle providers. Thus, Plugin can be regarded as an cost-effective, scalable and highly trusted, decentralized oracle provider.