Crypto exchange Binance has introduced an oracle network for its BNB Chain ecosystem to connect the blockchain to real-world data and vice versa. Venus, a lending protocol; Alpaca Finance, a yield farming protocol; and Ankr, a liquid staking solution, have already been integrated into the Binance Oracle.
With oracles, smart contracts are able to access data that exists outside of a blockchain. Gwendolyn Regina, BNB Chain’s investment director, in a statement, said using oracles to dramatically increase the smart contract’s knowledge of what’s going on outside of the block, allowing it to react to external events with specified actions, will be important. Binance Oracle will initially provide index prices for the most popular digital assets.
Regina said security: smart algorithms, will check prices for accuracy and consistency, and a data monitoring architecture has been implemented. It should be noted that the network’s recovery time objective is nearly zero. Every data feed will be monitored with a distributed “Threshold Signature Scheme” and verified with the Binance public encryption key. This will ensure that data is not modified. But then oracles have recently been exploited in crypto hacks. An example is the $100 million exploitation from the Mango Markets wherein Sam Bankman-Fried, the FTX CEO, blamed the design of the oracle providing MNGO token price. The hacker took off with a $100 million loan after driving up the price of the MNGO token and making it look like they had more collateral than they did. Bankman-Fried said the oracle was accurately reporting the current price of MNGO, but the “current price” wasn’t really anything close to the fair price.