OKCoin launches its oracle

Yesterday the OKCoin exchange announced the launch of its oracle to support decentralized finance (DeFi) and provide a reliable tool and source.

Specifically, we are talking about endpoint APIs that can be invoked by anyone, and so not only by exchange users.

The private keys will be stored by the exchange infrastructure in order to guarantee that there is no interference or manipulation of the price feed.

In fact, one of the problems of oracles is precisely that of reliability, since anyone can create one or pick parameters and pass them off as reliable.

There are few reliable and verified instruments, as pointed out by the CEO of OKCoin, Hong Fang:

“Accurate on-chain pricing furthers the legitimacy of the DeFi ecosystem, ensuring end users are receiving verified information that is signed by OKCoin. As a regulated cryptocurrency exchange, our goal is to establish trust within the crypto economy. Providing a reliable price feed is part of that mission.” 

What are oracles?

Oracles are a fundamental tool for decentralized finance (DeFi) because they allow tracking in real-time the prices of assets, for example, and thus check whether to close and liquidate the various debt positions of the various vaults or not, since if the price of a particular asset falls too much then a smart contract could start the liquidation phase and close a position.

It should be noted that having efficient and fast oracles also avoids the situation that occurred during the crypto crash in March, which triggered the sudden fall of the price of Ethereum (ETH) and was amplified by oracles who were unable to respond in time to the event by updating prices.

Interestingly, this oracle supports on-chain prices for the Compound protocol, thanks also to the fact that the same company has developed an SDK that allows obtaining reliable and verified prices.

Although for the moment these new APIs have not been released, there are already details of the parameters:

• Off-chain price data where sources, called Reporters, sign price data with a private key. Reporters can be anyone and make the signed data publicly available.
• Posting price data to Ethereum can be done by anyone with gas and a web3 connection
• On-chain storage is supported by a Data Contract on Ethereum. Timestamped price data is decoded from signed data and stored under the Reporter’s public key, with the Data Contract holding the Reporter’s most recent price information.
• Price views are made possible by the View Contract, which reads, parses, aggregates, and transforms data from the reported price feeds. These price feeds are selected by the on-chain application or user who requested the price data.

Finally, we recall that not so long ago Coinbase also launched its official oracle that is open to all thanks to the use of its API, thus we see that the various companies are moving increasingly towards DeFi.