The Umbrella Oracle integration marks Concordium’s first supported oracle.

In the dynamic landscape of Web3 and blockchain technology, ‘Oracles’ facilitate a seamless connectivity between blockchain networks and the tangible world. In this article, we will briefly define an oracle’s role in Web3 and the significance of this integration for Concordium´s ecosystem. Let´s dive into it !

What are Oracles and why are they important?

Oracles are trusted data conduits delivering external information and real-world events to smart contracts and DApps, empowering them to operate based on real-world data, transcending the limits of blockchain’s inherent knowledge.

They are important because they provide reliable data and enable smart contracts to make informed decisions and execute actions based on real-world information, thus enhancing the blockchain´s ability to interact with and respond to external circumstances.

What are the key functions of oracles in Web3?

Overall, oracles serve as trusted data feeds, delivering external data, off-chain inputs, and real-world events to smart contracts and decentralized applications (DApps) on a blockchain. But what other key functions and use cases do they serve in the blockchain industry? Here is a quick overview of the key functions of oracles in Web3.

Interoperability

Oracles enable cross-chain communication and interoperability by providing external data to multiple blockchain networks, allowing them to interact with each other. Interoperability enhances a blockchain´s adoption and simultaneously enables developers to tap into a broader range of resources, assets, and functionalities. This means they can leverage the strengths of multiple blockchains, combining them to create more versatile and powerful applications.

Decentralization

Many oracle solutions aim to provide decentralized data feeds, reducing reliance on a single centralized entity for data accuracy and integrity. Decentralized data feeds align perfectly with the core principles of Web3, offering increased trust, reliability, resilience, and flexibility to developers and users alike.

Security and Trust

Ensuring the reliability and security of data is a crucial function of oracles. Secure and trusted Oracle services are essential to prevent malicious data manipulation. The way in which Oracles prevent data manipulation is by cross-referencing data from multiple sources and using consensus checks, making it challenging for any one entity to tamper with the information, thereby ensuring data integrity for blockchain applications.

Use Cases

Oracles play a vital role in various fields, including but not limited to DeFi, Insurance, Supply Chain Management, Gaming, Healthcare etc. This can ensure fairness and transparency, as well as maintain data and privacy integrity.

Tokenization

An Oracle’s primary function is to gather, validate, and deliver real-world data to smart contracts for accurate decision-making. Some blockchain projects create their own native tokens, often referred to as “oracles,” which represent ownership or participation rights within a network. These tokens may be used to incentivize or reward participants in the network.

What does the Umbrella Oracle bring to Concordium?

Oracles are needed in a blockchain ecosystem to provide trusted, real-world data to smart contracts and DApps. They bridge the gap between on-chain and off-chain information, enabling decentralized applications to make informed, data-driven decisions.

Without oracles, blockchain applications would be limited to internal data, restricting their real-world functionality. Oracles enhance a blockchain’s utility in areas like DeFi, supply chain, and more.

Umbrella is a leader in the Oracle space and its integration with Concordium would attract developers and applications to use Concordium for commercial solutions, eventually increasing transactions over the chain.

Let us delve into some of the key benefits

The Highest Quality Data for every need

Umbrella Network is a customizable oracle able to support the many different needs that a Dapp may have, thanks to its broader suite of data solutions. This flexibility empowers projects to access tailored data feeds to their precise requirements and fuel their innovative products. The Umbrella data suite consist of three main solutions:

On chain data

It perfectly meets lending protocol, vaults and twap needs. This solution allows projects to set custom deviation triggers and heartbeat, using existing oracle integrations tominimize changes to their smart contracts.

Data Roll up

Ideal for projects that require massive and scalable data like prediction markets or ReFi projects. Thanks to its Merkle tree technology, Umbrella can aggregate thousands to hundreds of thousands of data points and write them on chain under a single unique Merkle root hash.

On Demand data

Ideal for options and spot trading Dex enables projects to set their own parameters to receive data.

A Community Owned & Decentralized Oracle

Thanks to its architecture Umbrella is able to provide diverse data sets from a wide variety of industries in a secure and decentralized manner. Unlike other oracles Umbrella’s Community-Run Decentralized Validator Network ensures data integrity and avoids centralization risks.

The data infrastructure supporting vital global industries is too critical to be controlled by a centralized party that’s why we’ve chosen Umbrella. As a community owned project, Umbrella is run by a DAO council which together with the core team work on the direction and execution of the project’s goals, ensuring a decentralized and democratic approach