Chainlink Achieves Key Scalability Upgrade With Launch of Off-Chain Reporting (OCR)
OCR’s new off-chain computation model reduces gas costs for node operators by up to 90% and increases the amount data brought on-chain by 10x
After over a year of in-depth research, development, and security audits, industry-leading blockchain oracle solution Chainlink has officially launched Off-Chain Reporting (OCR) on mainnet, marking a major milestone in the scalability of Chainlink’s decentralized oracle network. With this latest version of its core client, Chainlink, which currently secures over $10 billion in smart contracts, is significantly improving the efficiency of how data is aggregated by oracles and delivered to blockchain-based smart contracts. Estimates indicate that OCR can reduce node operating costs like transaction fees by up to 90%, allowing for a 10x increase in the amount of real-world data that can be brought on-chain by the network for use by smart contracts.
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“Historically, the growth of smart contracts is connected with the rate at which off-chain market data can be put on-chain for the creation of vertically focused use cases like decentralized finance. Chainlink’s initial launch correlated heavily with the initial growth of DeFi and continues to underpin the continued expansion of the space’s leading lending, insurance and derivatives smart contracts/protocols. Chainlink OCR’s 10X scalability improvement will initially accelerate this existing dynamic, enabling even more DeFi applications to go live. This newest version of Chainlink will also enable oracles to provide more data to other categories of smart contracts such as insurance, gaming/NFTs, and many others, resulting in growth across several different sectors. Chainlink OCR is rapidly accelerating Chainlink’s scalable future as the world’s leading provider of highly validated data and trust minimized off-chain computation” said Chainlink Co-Founder, Sergey Nazarov.
OCR improves the scalability, security, and performance of the Chainlink Network by allowing Chainlink nodes to cost-effectively aggregate data off-chain. Nodes can fetch data from one or multiple data sources, sign it with a unique private key, and then broadcast it to the rest of an oracle network off-chain. Once a sufficient threshold of responses is reached, a single transaction containing every node’s observation is transmitted on-chain and then validated by a smart contract, avoiding the need for multiple nodes to pay blockchain transaction fees. As a result of this increased efficiency, OCR will increase the decentralization of oracle networks, reduce onboarding costs for new nodes, reduce on-chain network congestion on blockchains like Ethereum, reduce deviation thresholds for on-chain oracle updates, and reduce oracle network latency during blockchain congestion.
Additionally, beyond accelerating the rate at which the Chainlink Network can bring data on-chain, like Price Feeds and Proof of Reserves, OCR will also set the foundation for Chainlink oracle networks to perform new types of trust-minimized off-chain computation in a scalable, efficient, and cost-effective manner. Whether it’s combining numerous data types to build on-chain indexes or calculating insurance quotes using a variety of parameters, OCR will allow the Chainlink Network to provide smart contracts with a more advanced and broader range of trust-minimized computations, further enabling smart contract applications to generate real-world value for users across different industries.
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