Many different projects make use of Ethereum infrastructure to provide diverse and unique services. Chainlink, known for its oracle services, is stepping up its game. Off-chain reporting functionality may prove to be a significant game-changer in this industry.
Chainlink Takes the Next Step
When building a new layer of functionality on top of Ethereum, there is no time for stagnation. Developers need to keep pushing the boundaries of what can be achieved. In the case of Chainlink, there are different ways to make its oracles more robust. one option currently being explored is known as “Off-chain reporting.” An exciting way of aggregating data in a different manner.
Most people know that smart contracts are relatively dumb on their own. More specifically, the code has no way of interfacing with external data sources or the offline world. Through oracles, Chainlink aims to address this shortcoming. It is a service that is currently used by many other blockchain projects. Having multiple sources of data creates better transparency, among other things.
However, acquiring information can be done in many different ways. In a recent update, the developers are experimenting with aggregating data off-chain. This approach has multiple benefits, including cutting down on overall costs associated with the oracle service. Off-chain data aggregation also makes it easier to rely on even more data sources without spending any extra money.
In the current on-chain aggregation setup, all nodes must perform this task. That situation will change, as network nodes can acquire data and communicate with one another off-chain. As such, only one node needs to process information on-chain. The remainder of the nodes will provide small attestations instead of the entire data set.
A Welcome Change of Pace
Whereas most people will focus on the lower costs, that is not the only significant benefit. By moving most of the process off-chain, Chainlink is capable of achieving a far more decentralized status. Doing so will help improve network security for all users and participants. It is a win-win implementation and one that further highlights the blockchain’s potential.
Developers will improve the concept of off-chain aggregation further by leveraging Threshold Signatures. It was announced some time ago and provides a cost reduction. Additionally, these Threshold Signatures allow for multiple data oracles to combine their data into one single transaction. Every transaction only has one signature, having a positive impact on Ethereum’s gas requirements.
All of these developments confirm blockchain technology is a compelling solution. Building new concepts will introduce better scalability and lower price concerns. Chainlink is just one example of what is possible in this industry.
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