Binance has launched an oracle network for its BNB chain ecosystem that will connect the blockchain to real-world data and vice versa. At the same time, an early bird program was launched with ten BNB projects.
Projects that have already integrated the Binance Oracle include some of the largest teams in the BNB chain: lending protocol Venus ($770 million total value locked or TVL), yield farming platform Alpaca Finance ($510 million Dollar TVL) and liquid staking solution Ankr ($101 million TVL), according to DeFi Llama.
Oracles allow smart contracts to access data that exists outside of a blockchain. For example, a protocol might want its smart contract to be triggered based on security prices, macroeconomic indicators, or even weather data.
“Using oracles to dramatically expand the smart contract’s knowledge of what’s going on off-chain and allow it to respond to external events with specific actions will be critical,” said Gwendolyn Regina, Investment Director of BNB Chain, in a statement.
Initially, Binance Oracle will provide index prices for the most popular digital assets.
Binance Oracle data schema. Image: Binance
The announcement emphasized security: intelligent algorithms will check prices for accuracy and consistency, and a data monitoring architecture has been put in place. Binance said the network’s recovery time target, or its tolerance for downtime, is “close to zero.”
Each data feed is monitored with a distributed “Threshold Signature Scheme” and verified with Binance’s public encryption key to ensure the data is not altered, the company said.
Although they are often an important part of the blockchain ecosystem, oracles have recently been exploited in crypto hacks.
After an attacker stole $100 million from Mango Markets Solana DeFi trading platform, FTX CEO Sam Bankman-Fried blamed the design of the oracle that provided the MNGO token price in a Twitter thread.
The attacker was able to borrow $100 million after inflating the price of the MNGO token and making it seem like they had more collateral than they actually had.
“The Oracle [was] accurate reporting of current MNGO pride,” Bankman-Fried wrote on Twitter. “It’s just that the ‘current price’ wasn’t really close to the ‘fair price’.”
More recently, an attacker exploited a vulnerability in Curve Finance’s price oracle to stage a $220,000 flash loan attack on decentralized exchange (DEX) QuickSwap. The Polygon DEX closed its loan record after the attack.
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