Imagine traditional banking services like Mastercard or Visa instantly connecting to DeFi liquidity pools and offering their customers higher yield returns. Or an art collector instantly knowing the value of an NFT by pulling its performance metrics and data, rather than relying on sheer speculation. These tools are coming, thanks to fully integrated oracle solutions on blockchain.
What Are Oracle Solutions?
Oracles connect public and private blockchains, serving as a bridge between centralized entities and the world of decentralization. The problem with most blockchains, however, is that they have not been developed as fully integrated infrastructure with native oracles. Additionally, most bridges are one-to-one, thereby fracturing liquidity across multiple bridges and communication pathways.
As DeFi has developed, better oracle solutions have been needed, and SupraOracles has developed a hub-and-spoke system designed to integrate with the most widely used blockchains, starting with Ethereum and EVM compatible chains, like Avalanche, as well as other chains like Solana later. The use cases arising from this model will further blockchain adoption, while streamlining on-chain experiences that rely on data analytics and performance metrics of cross-chain assets.
NFT Pricing
The problem with pricing NFTs is that these digital assets are subject to individual preference: Beauty is in the eye of the beholder. Nonetheless, generative art and profile pictures are merely the tip of the iceberg when it comes to the tokenization of non-fungible assets, which actually includes the majority of physical world assets. Oracles can help price these assets: When we are able to attribute performance metrics or pricing data to NFTs through oracles on a blockchain, we can transmute previously unproductive assets into yield generating resources.
The missing element for NFTs are decentralized performance analytics and content access controls, such that the original creator may control where, how long and who can view their content. If these were in place, the creator could monetize their ideas, art and knowledge. Oracles are chiefly required among the technologies that facilitate this particular use case, which will unlock opportunities and latent value.
CBDCs and Public Blockchains
In a world where CBDCs (central bank digital currency) are becoming mainstream and public blockchains are widely in use, the interchange between these paradigms will enable traditional financial institutions to tap into the liquidity of DeFi ecosystems for further yield. Dipping into public liquidity pools is particularly salient in a financial environment where banks are providing little to no interest rates.
In order to connect private and public blockchains together, the Mastercards and Visas of the world will need to bridge with DeFi in a secure fashion. To facilitate cross-chain DeFi which interacts with CBDC and cryptocurrencies, oracles are an absolute necessity for both foreign exchange and cryptocurrency data conversion.
Joshua Tobkin is the founder and CEO of SupraOracles, a powerful blockchain oracle that helps businesses bridge real-world data to both public and private chains, enabling interoperable smart contracts to automate, simplify and secure the future of financial markets.
