The yr 2022 was not an excellent yr for Cosmos and its imaginative and prescient of inter-blockchain communications (IBC). The collapse of the Terra Luna ecosystem (the largest protocol on Cosmos on the time), pressure between co-founders and a fall within the token’s worth all solid a shadow on its future prospects. That mentioned, initiatives similar to dYdX and cross-chain oracle protocol Seda proceed to name the community house and are adamant about its IBC imaginative and prescient.
At the moment, Seda says it allows over 12 million information feeds throughout 24 networks. In an interview with Cointelegraph at EthCC Paris, Jasper de Gooijer and Peter Mitchell, co-founders of the Seda protocol (previously often known as Flux), mentioned the significance of oracles in cross-chain bridges and the way they defend the worth they permit.
Cointelegraph: How do oracles add worth to IBC?
Jasper de Gooijer: The present downside is that sensible contracts can solely question information exterior of blockchains themselves, proper? That tremendously limits the quantity of use circumstances that sensible contracts have, similar to in lending markets. So in these markets, if you’d like data on worth on, say, six chains directly, you want six oracle suppliers, and that is whenever you want multichain oracles.
CT: What’s the greatest accomplishment or technological breakthrough up to now within the Seda ecosystem?
Peter Mitchell: We launched Seda a couple of yr in the past. And inside eight weeks, we grew to become the second-largest oracle, securing over $2.7 billion in whole worth locked. After which we realized that we couldn’t monitor and scale this into one thing like 200 chains, proper? It could be not possible to have sturdy monitoring of worth feeds.
So the innovation we’ve constructed on Seda is that the principle chain aggregates the info after which pushes the sensible contracts to the subchain. And so, quite than deploying the oracle contract on each new chain, we simply deploy this single sensible contract.
CT: In gentle of current high-profile oracle exploits, what are some methods of protecting the expertise safe?
JG: The principle level is actually simply schooling. Folks ought to know that they need to not construct a bridge with lots of of hundreds of thousands of whole worth locked if the [underlying] token solely has like $10 million of liquidity on decentralized exchanges. The second factor is constructing sensible worth information modules, so you’ll be able to swap tokens for one thing like time-weighted common worth, which makes it much less prone to slip in risky environments.
PM: Like Jasper was saying, in case you have a token that is being borrowed in opposition to $100 million, and also you solely have, let’s say, $10 million in liquidity on-chain, then you’ll be able to’t actually liquidate $100 million or $50 million positions in opposition to that type of liquidity. So organising metrics like liquidation thresholds and collateralization ratios beforehand can actually arrange the protocol for fulfillment.
BIG REVEAL
1/ We’re thrilled to announce that we have now rebranded from Flux Protocol to @sedaprotocol, a brand new commonplace for information transmission throughout web3!
Say goodbye to centralized management over information & hey to a future the place information flows freely pic.twitter.com/GYttNGuwuJ
— SEDA (@sedaprotocol) January 16, 2023
This interview has been edited from its authentic format for readability.
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