Binance has introduced its Oracle service, Binance Oracle. As its name suggests, the service facilitates communication between blockchain applications and real-world information. Binance Oracle will initially only be available within the BNB Chain ecosystem, but the development team plans to bring it to other chains in the future. In a blockchain system, oracles are external services that pull in information from the outside world.
Binance Oracle and how it fits in the blockchain ecosystem
Oracles in the blockchain are third-party services that grant access to data outside of the blockchain’s internal nodes for use by smart contracts. Simply put, an oracle connects the digital ledger to the external ecosystem. Smart contracts can benefit from these services since they allow them to interact with off-chain data and proceed with their execution based on specified parameters. It guarantees that the right information is available to smart contracts at the right moment.
Binance has stated that about 1,400 applications that are already running on BNB Chain will immediately benefit from its oracle service. Already, over ten BNB Chain projects have implemented Binance Oracle integration. Furthermore, the service is capable of supporting other blockchains and will eventually include support for additional networks. The Oracle service will assist with a wide variety of BNB Chain ecosystem blockchain partners.
Oracles are key to operations in Web3. They supply the essential real-world data to the smart contracts that fuel a wide variety of use cases. Binance claims its new service is tailor-made for the requirements of DeFi applications and will provide a safe and reliable data feed to the blockchain.
Recently, hackers have exploited the absence of native oracle platforms in order to steal data. The protocols are vulnerable to attacks because millions of dollars worth of tokens can be stolen by manipulating the protocols’ reliance on oracles for lending. Binance says it will employ a decentralized “Threshold Signature Scheme” to keep an eye on all the data coming into the Binance Oracle system. To ensure no tampering, the service will use the Binance public encryption key for verification.