This project aligns well with the core values of Ethereum, aiming to create a decentralized oracle and a data & computation marketplace through EigenLayer. However, this also reveals a relatively weak business model, with profit expectations that may not be stronger than other Oracle projects. Achieving profitability could take some time, especially considering the typically low revenue-generating capacity of Oracle projects.
Compared to ChainLink, the leading decentralized oracle project, eOracle’s only fundamental advantage is its OVS (Oracle Validated Service), which allows developers to create customized oracles and sell them on eOracle’s marketplace. This essentially operates like a decentralized software marketplace, where eOracle plays the role of the platform. If this market matures and generates positive growth momentum, eOracle has the potential to take off. Additionally, it will become even more appealing if eOracle can provide more cost-effective decentralized oracle services.
Currently, the participation options are limited, primarily requiring the staking of ETH or LST tokens. Whether to participate or not should be determined through your research (DYOR).
Risks:
There currently needs to be detailed public information about the eOracle team. However, we can glean some insights from the Aegis protocol paper written by its technical team. The paper credits the following individuals:
We can tentatively assume that the above individuals are all members of the eOracle team, suggesting that eOracle is likely an Israeli-based team.
The ultimate goal is to build a fully decentralized, permissionless, and trustworthy neutral data and computation marketplace.
Target Customers and Revenue Sources:
OVS Developers:
OVS (Oracle Validated Service) refers to custom oracle builders who develop their own oracles on the eOracle infrastructure. Builders can create OVS and offer them on the eOracle marketplace, or developers can use them in their own applications.
Specifically, OVS developers can independently configure data sources (such as financial data, real estate data, or any other type of data) and build custom aggregation logic for applications. This allows data to be processed and combined in a way that best suits the application, enhancing its functionality and performance.
Dapp Developers:
Dapp developers can integrate their Dapps with eOracle to access the price data provided by eOracle.
Partners:
EigenLayer and Node Operators:
eOracle is built on EigenLayer, benefiting from the crypto-economic security supported by Ethereum validators. Operators can register to contribute to the eOracle ecosystem and earn rewards. (Note: The rewards mentioned for “data validators” are actually secured by EigenLayer, while “chain validators” who maintain the EO chain will also have their own incentives.)
As of August 6, 2024, no funding information for eOracle is available on Rootdata.
Here, using data from Token Terminal, we reference the revenue or total gas fees used by decentralized oracle projects like ChainLink, Pyth, and UMA.
ChainLink:
Revenue and average revenue per user (ARPU) data are shown in the chart below:
The Gas fee data used by Pyth Network (revenue data is missing) is shown in the figure below:
The Gas fee data used by UMA (revenue data is missing) is shown in the figure below:
As seen, the revenue generated by a standalone oracle project is relatively low, fluctuating between a few hundred to a few thousand dollars daily. For comparison, consider the daily revenue of leading lending project Aave and DEX leader Uniswap:
Aave:
Uniswap:
The daily revenue of Aave and Uniswap, often reaching several hundred thousand dollars, clearly shows that oracle revenues are not in the same league (of course, this assumes the data from Token Terminal accurately reflects the income of oracle projects). Therefore, if eOracle relies solely on oracle-generated revenue, its income potential may not be very significant. To break through, it may need to explore other avenues (the simplest being token issuance and sales, or fundamentally, expanding into derivative businesses to broaden revenue sources, depending on the project’s direction).
Dual Token System: ETH + eOracle Native Token
As suggested by Vitalik, eOracle adopts a dual-token approach, using Ether (ETH) as the primary component of its security, ensuring that the “budget” required to attack the protocol is high, and that the “cost” of attacking the system based on the native oracle token is also significant. Additionally, the native token will be used to incentivize positive behavior, penalize malicious actors, and decentralize ownership and governance. This allows eOracle to benefit from the stability, crypto-economic security, and flexibility provided by Ether while aligning with the native token.
However, the specific allocation and distribution plan for eOracle’s tokens has not yet been disclosed, which is something to keep in mind.
eOracle Points are awarded to both operators and ETH delegators, quantified based on the amount and duration of staked ETH. Operator points are derived from the total accumulated points associated with each operator.
Stakeholder points = number of staked tokens (ETH or LST) × number of staking hours
For example, if a user stakes 1ETH for 10 days, the points earned will be 110 days 24 hours/day = 240.
If a user stakes multiple tokens, the staker’s total points are the sum of those points.
Operator points = total points of all users under it * 0.03
For example, if 5 users entrust a total of 10 ETH to operator A for a total of 10 days, then the points obtained by the operator are 1010 days 24 hours/day * 0.03 = 72. Of course, if the operator itself also has staked funds, it will also receive corresponding staker points. I will not give an example here.
eOracle is the first Ethereum-native oracle, designed as a modular and programmable data layer secured by Ethereum and built on EigenLayer. It provides decentralized applications with native security for real-world connections and off-chain computational capabilities, backed by the decentralized network of re-staked Ether and Ethereum validators. The mission of eOracle is to create a fully decentralized, permissionless, and trustworthy neutral data and computation marketplace.
Comparison between eOracle and traditional oracle:
Closed market vs. open market
Traditional oracles act as intermediaries, controlling the cost, supply, and diversity of data. In contrast, eOracle’s data marketplace eliminates intermediaries, instead leveraging the largest and most diverse network of blockchain validators. This allows validators and decentralized applications (dapps) to interact directly within an open market, bringing a broader range of high-quality data to the ecosystem. The direct relationship between validators and dapps benefits both parties by creating cheaper and more cost-effective data. In this market, efficiency and inclusivity unlock new innovations and opportunities.
Closed operations vs. global distributed operations
Contrary to the decentralized nature of the blockchain ecosystem, traditional oracle nodes are registered and operated by a selected group of nodes. eOracle, supported by nodes operated by Ethereum validators, extends the security and values of Ethereum’s PoS (Proof of Stake) to the oracle space.
Brand Trust vs. Ethereum Security Trust
Traditionally, oracles rely on staking pools branded with their own identities, introducing additional trust assumptions and attack vectors for consumer applications. By leveraging Ethereum validators, eOracle allows applications to access secure data without introducing new participants or attack vectors into their security considerations.
Opaque vs. transparent and programmable
In the past, insular oracle systems with obfuscated aggregation were implemented to compensate for the limitations of verification. However, with the advent of EigenLayer and re-staking mechanisms, eOracle adheres to ecosystem standards for incentives, transparency, and crypto-economic security.
Restricted access vs. permissionless integration
Open and free access to information is not only a value of the ecosystem but also a key aspect of innovation. Any decentralized application on any blockchain can access and use eOracle data. Applications are no longer constrained by infrastructure limitations, which previously hindered industry progress, but can instead use the required data anywhere without sacrificing efficiency.
The security at the foundational level is provided by EigenLayer. EigenLayer’s smart contracts manage the network’s cryptographic identities, stake records, and validator sets, enabling eOracle to slash the funds of malicious validators.
EO-Chain is a dedicated Proof-of-Stake (PoS) blockchain operated by EigenLayer operators (Ethereum validators who have re-staked their ETH to secure the network). EO-Chain offloads computation from the main blockchain (i.e., Ethereum mainnet), reducing costs and latency while maintaining decentralized incentives for oracle operators. This setup ensures that all computations are conducted on-chain, guaranteeing transparency and security. The core components of this layer include:
These are smart contracts on the EO-Chain that aggregate and verify data submitted by validators. These smart contracts generate digitally signed and verifiable data by consolidating the signatures of data validators, taking into account their respective voting weights.
Smart contracts can be permissionlessly deployed on consumer blockchains to integrate eOracle data. These contracts can verify the validity of signatures generated by the eOracle protocol, enabling dapps to read and use the data they require.
eOracle offers WebSocket and REST API services, allowing eOracle data to be used as a pull oracle. Combined with the eOracle Solidity SDK, dapps can automate their data usage using Python, TypeScript, or other automation solutions.
The process is divided into four stages: Reporting, Validation & Aggregation, Publishing, and Utilization.
Reporting
Any publicly accessible real-world data can be added to the eOracle network, where eOracle operators (referred to earlier as “Data Validators”) begin reporting on this data. The data sources for these reports come from various endpoints, such as WebSocket or API.
Users can set the reporting frequency and specify the values they wish to extract. Once operators acquire the data, they sign it and send it to the EO-Chain as a transaction.
Any operator with stake above the threshold can participate in reporting, with the weight of their report determined by the amount of stake they hold. Reports from a specific operator cannot be forged by others, and once received, their participation becomes an immutable part of the EO-Chain’s state.
Operators running eOracle nodes (referred to earlier as “Chain Validators”) receive transactions containing signed reports. The nodes then cryptographically verify the identity of the reporters. Due to the permissionless nature of the protocol, the reports are censorship-resistant. Smart contracts periodically aggregate verified reports using a specialized scheme - Oracle Validated Service.
Dapps can use eOracle’s standard aggregation, which employs advanced algorithms and protocols to identify and discard outliers, or define custom aggregation tailored to specific use cases. To achieve consensus and ensure security, computations are distributed across multiple validators and verified by them.
The aggregated computation process and its results become an immutable part of the EO-Chain. The decentralized, transparent, and permissionless nature of this process ensures the authenticity, accuracy, and verifiability of the reports and aggregation results, which can then be published.
Publishing is the process by which eOracle’s aggregated data is released onto the target blockchain. The target blockchain refers to the network where any decentralized application (dapps) wishing to use eOracle data is hosted. To provide eOracle data, each target blockchain has a smart contract that verifies, parses, and approves the data signed and generated by EO-Chain.
To save gas costs and enhance efficiency, the aggregated data is hashed and mapped to a leaf node of a Merkle tree, then associated with the eOracle state and signed by the current set of valid eOracle validators. eOracle uses a BLS digital signature scheme to enable efficient participation of large-scale participants through threshold signatures and signature aggregation. This cryptographic scheme allows the use of scalable signature schemes to protect the necessary assets.
Decentralized applications (dapps), individuals, and institutions can seamlessly interact with eOracle through its Solidity SDK, allowing them to access and utilize aggregated on-chain data whenever needed.
Users interested in low-latency or customized updates can also use eOracle’s REST API. This allows users to receive all the components needed to validate on-chain data and then execute dependent transactions. All cryptographic, encoding, and parsing tasks are abstracted by eOracle’s Solidity and TypeScript/Python SDKs.
Off-chain infrastructure can use eOracle’s WebSocket interface to cache aggregated data, providing a smooth, low-latency user experience, enabling instant integration and execution on user services. eOracle’s low-latency interface makes on-chain security and transparency more accessible, offering users a seamless experience.
This workflow is similar to ChainLink’s, as illustrated below:
The eOracle Validator Set is integrated into the Ethereum PoS Validator Set through the Aegis protocol, allowing Ethereum validators to participate in the eOracle network without any permission requirements.
Traditionally, changing the validator set over time is referred to as reconfiguration. Known solutions generally involve reaching consensus on updating the validator committee during the process of creating new blocks. In other words, the decision made in block i includes the details of the committee that will generate block i+1.
However, the validators for the eOracle chain are not determined on the eOracle chain itself; instead, they are established on Ethereum through restaking and unstaking operations. As a result, each block on eOracle contains a reference (hash pointer) to the latest Ethereum block. This implicitly determines the committee for the next block: namely, the set of restakers on that Ethereum block.
The issue arises when this differs from the classic scenario: the committee defined in an Ethereum block is temporary and becomes invalid once its members unstake. If this happens, our blockchain might end up running without an active committee.
We address this issue by introducing a new design called Aegis, the algorithm behind the EO-Chain, which uses the main chain (Ethereum) to protect a derivative chain (eOracle chain), much like the mythological shield it’s named after.
Aegis defines the validator set by referencing from the Aegis block to the main chain block, setting checkpoints on the main chain to continuously make decisions, and resetting on the main chain to establish a new committee when the previous one becomes invalid. This design ensures security at all times and allows for rapid progress when latency between Aegis nodes is low.
eBFT is a secure and novel network adopted by eOracle, comprising a consensus engine (IBFT) and an external validator set reconfiguration protocol (Aegis). It leverages the IBFT consensus engine to package blocks, provide specific network capabilities, and manage the network. The integration of eOracle’s EigenLayer smart contracts, used in conjunction with the Tendermint-based consensus engine, fully implements the Aegis protocol.
IBFT (Istanbul Byzantine Fault Tolerance) is a consensus mechanism designed to ensure that a blockchain network can reach consensus even in the presence of malicious nodes. Based on the Byzantine Fault Tolerance algorithm, IBFT requires at least two-thirds of the nodes to agree in order to confirm transactions and generate blocks. It operates by rotating block proposals among validators, where each validator takes turns proposing a block while others validate and vote on it. IBFT is characterized by high throughput, low latency, and rapid finality, making it well-suited for enterprise-grade blockchain applications.
Tendermint, a core contributor to the Cosmos network, provides essential tools for distributed networks. Its primary product, Tendermint Core, is a leading Byzantine Fault Tolerance (BFT) consensus engine that ensures the security and scalability of blockchain projects. Additionally, Tendermint offers the Cosmos SDK, a popular framework for building blockchain applications, and the IBC protocol, which facilitates inter-blockchain communication. These tools enable developers to easily create robust, decentralized applications.
The external validator set reconfiguration protocol (Aegis) within eBFT is implemented through a set of core smart contracts that adhere to Aegis protocol specifications. These contracts integrate restaking functionality, configure the validator set, and record commitments to the eOracle state.
Key Features of eBFT:
State Transition
IBFT 2.0 defines a series of state transitions that determine the on-chain consensus for the blockchain state. A validator proposes a block to be added, specifying operations to update the blockchain’s state.
Validators in the Ethereum validator set accept a valid proposed block. Each validator’s voting power is weighted by the amount of tokens they have staked. A supermajority of validators must validate a block for it to be accepted.
When a validator proposes a new block, the other validators verify it and vote on whether to accept it. This process can be repeated if necessary. In each round, a threshold number of validators must validate and sign the block before it can be added to the blockchain. If the threshold is not met, the next round begins, and another validator proposes a block, repeating the process.
If the proposed block is validated and signed by a threshold number of validators, it is accepted and reflected in the blockchain’s new state.
The block proposer is selected at the block generation rate to construct the block. The selection mechanism for proposers is based on Tendermint, implemented through a deterministic selection algorithm. Validators with more voting power are selected more frequently.
Benefits of Consensus
Voting Power Proportional to Stake: A validator’s voting power is proportional to the number of tokens they have staked. This means that validators with more staked tokens have more voting power and therefore greater influence in network decisions. This mechanism provides economic incentives for validators to act honestly and in the best interest of the network.
Economic Incentives Promote Honest Behavior: Since a validator’s rewards are directly tied to their performance in the network, they are strongly motivated to maintain the network’s stability and security. Any attempt to undermine the network through malicious behavior would result in a loss of staked tokens, reducing the incentive for such actions.
Leveraging the PolyBFT Stack: eBFT utilizes the PolyBFT stack, which takes advantage of its external staking design and cross-chain capabilities. This design allows eBFT to interact more flexibly with other blockchain networks, enhancing its security and scalability.
Aegis Protocol Integrates with EigenLayer: The Aegis protocol is integrated with Ethereum’s native validators through EigenLayer, ensuring the security and integrity of the network. This integration not only enhances eBFT’s fault tolerance but also enables it to leverage Ethereum’s robust community and ecosystem resources.
As of August 6, 2024:
When discussing oracle projects, it’s impossible not to mention the leading project, Chainlink. To be honest, eOracle aims to create a decentralized oracle network similar to Chainlink, with an architecture that also follows the model of Data Sources (Exchanges) → Data Collection Nodes (API Providers) → Data Processing Center (Oracle Chain) → End Users (Smart Contract Projects). However, there’s no clear advantage for eOracle over Chainlink in this regard.
Moreover, Chainlink’s range of services extends beyond price feeds (which address the reliability and tamper-resistance of data transmission). They also offer VRF (Verifiable Random Function) for ensuring the verifiability and tamper-resistance of on-chain randomness, and Chainlink Functions for lowering the barriers to connecting smart contracts with Web2 APIs, tackling issues such as the tamper-resistance and security of custom computation data.
Chainlink is also renowned for its strong focus on developer relations, providing extensive documentation and tutorials to help developers quickly get started with Chainlink. They regularly organize various events and competitions, such as hackathons, developer conferences, technical workshops, and offline meetups, offering related incentive programs for developers.
The Chainlink team is also quite impressive:
Furthermore, Chainlink is unmatched in ecosystem partnerships, securing over 400 protocols with a TVS (Total Value Secured) of $20.057 billion (ranking first according to Defilama).
If there’s one area where eOracle has taken a step beyond Chainlink, it would be its OVS (Oracle Validated Service). eOracle allows developers to create various custom oracles and sell them on the eOracle marketplace. This is akin to a decentralized software marketplace, where eOracle acts as the platform. If this market succeeds in the future and creates a positive growth flywheel, eOracle could have the potential to take off further. In short, for beginner developers without specific needs, Chainlink is undoubtedly the first choice. However, for more experienced developers, eOracle might be preferable, as it allows them to sell their products to others.
Additionally, if eOracle can offer lower pricing compared to established projects like Chainlink in the future, it could become even more attractive to developers.
Participation Opportunities
Restake ETH and LST
Rewards Description: eOracle Points
As mentioned earlier, the primary way to earn eOracle points currently is by staking ETH and LST tokens. Staker points = Number of Tokens Staked (ETH or LST) × Hours Staked.
Those with the resources can even register as eOracle node operators. Operator points = Total Points of All Users Under the Operator × 0.03.
Interaction Guide: Here’s a demonstration of how to restake ETH and LST tokens.
First, you need to restake ETH and LST tokens on Eigenlayer.
Enter and select the token you wish to restake, connect your wallet, and complete the restaking process.
Note 1: Generally, liquid restaking protocols like Renzo or Etherfi cannot be used for restaking because these liquidity restaking protocols often do not grant users the right to delegate node operators. This means you cannot be sure whether your restaked funds are allocated to eOracle or other projects.
Note 2: For more details on various concepts related to restaking, you can watch the general knowledge videos on Bilibili by our community, LYS Lab.
Reference links
https://app.eigenlayer.xyz/avs/0x23221c5bb90c7c57ecc1e75513e2e4257673f0ef
https://blog.eoracle.io/the-eoracle-ambassador-program-building-like-elon-einstein-edison/
https://blog.eoracle.io/the-end-game-for-oracles/
https://blog.eoracle.io/the-ethereum-oracle-now-live-on-eigenlayer-mainnet/
https://blog.eoracle.io/the-eoracle-points-program/
https://blog.eoracle.io/introducing-eoracle/
https://web3caff.com/zh/archives/84690
https://www.binance.com/zh-CN/square/post/8491430140657
https://foresightnews.pro/article/detail/35268
https://www.maxcrypto.space/p/chainlink
https://www.tuoluo.cn/article/detail-10098238.html
https://foresightnews.pro/article/detail/32719
https://tokenterminal.com/terminal/financial-statements/chainlink
This project aligns well with the core values of Ethereum, aiming to create a decentralized oracle and a data & computation marketplace through EigenLayer. However, this also reveals a relatively weak business model, with profit expectations that may not be stronger than other Oracle projects. Achieving profitability could take some time, especially considering the typically low revenue-generating capacity of Oracle projects.
Compared to ChainLink, the leading decentralized oracle project, eOracle’s only fundamental advantage is its OVS (Oracle Validated Service), which allows developers to create customized oracles and sell them on eOracle’s marketplace. This essentially operates like a decentralized software marketplace, where eOracle plays the role of the platform. If this market matures and generates positive growth momentum, eOracle has the potential to take off. Additionally, it will become even more appealing if eOracle can provide more cost-effective decentralized oracle services.
Currently, the participation options are limited, primarily requiring the staking of ETH or LST tokens. Whether to participate or not should be determined through your research (DYOR).
Risks:
There currently needs to be detailed public information about the eOracle team. However, we can glean some insights from the Aegis protocol paper written by its technical team. The paper credits the following individuals:
We can tentatively assume that the above individuals are all members of the eOracle team, suggesting that eOracle is likely an Israeli-based team.
The ultimate goal is to build a fully decentralized, permissionless, and trustworthy neutral data and computation marketplace.
Target Customers and Revenue Sources:
OVS Developers:
OVS (Oracle Validated Service) refers to custom oracle builders who develop their own oracles on the eOracle infrastructure. Builders can create OVS and offer them on the eOracle marketplace, or developers can use them in their own applications.
Specifically, OVS developers can independently configure data sources (such as financial data, real estate data, or any other type of data) and build custom aggregation logic for applications. This allows data to be processed and combined in a way that best suits the application, enhancing its functionality and performance.
Dapp Developers:
Dapp developers can integrate their Dapps with eOracle to access the price data provided by eOracle.
Partners:
EigenLayer and Node Operators:
eOracle is built on EigenLayer, benefiting from the crypto-economic security supported by Ethereum validators. Operators can register to contribute to the eOracle ecosystem and earn rewards. (Note: The rewards mentioned for “data validators” are actually secured by EigenLayer, while “chain validators” who maintain the EO chain will also have their own incentives.)
As of August 6, 2024, no funding information for eOracle is available on Rootdata.
Here, using data from Token Terminal, we reference the revenue or total gas fees used by decentralized oracle projects like ChainLink, Pyth, and UMA.
ChainLink:
Revenue and average revenue per user (ARPU) data are shown in the chart below:
The Gas fee data used by Pyth Network (revenue data is missing) is shown in the figure below:
The Gas fee data used by UMA (revenue data is missing) is shown in the figure below:
As seen, the revenue generated by a standalone oracle project is relatively low, fluctuating between a few hundred to a few thousand dollars daily. For comparison, consider the daily revenue of leading lending project Aave and DEX leader Uniswap:
Aave:
Uniswap:
The daily revenue of Aave and Uniswap, often reaching several hundred thousand dollars, clearly shows that oracle revenues are not in the same league (of course, this assumes the data from Token Terminal accurately reflects the income of oracle projects). Therefore, if eOracle relies solely on oracle-generated revenue, its income potential may not be very significant. To break through, it may need to explore other avenues (the simplest being token issuance and sales, or fundamentally, expanding into derivative businesses to broaden revenue sources, depending on the project’s direction).
Dual Token System: ETH + eOracle Native Token
As suggested by Vitalik, eOracle adopts a dual-token approach, using Ether (ETH) as the primary component of its security, ensuring that the “budget” required to attack the protocol is high, and that the “cost” of attacking the system based on the native oracle token is also significant. Additionally, the native token will be used to incentivize positive behavior, penalize malicious actors, and decentralize ownership and governance. This allows eOracle to benefit from the stability, crypto-economic security, and flexibility provided by Ether while aligning with the native token.
However, the specific allocation and distribution plan for eOracle’s tokens has not yet been disclosed, which is something to keep in mind.
eOracle Points are awarded to both operators and ETH delegators, quantified based on the amount and duration of staked ETH. Operator points are derived from the total accumulated points associated with each operator.
Stakeholder points = number of staked tokens (ETH or LST) × number of staking hours
For example, if a user stakes 1ETH for 10 days, the points earned will be 110 days 24 hours/day = 240.
If a user stakes multiple tokens, the staker’s total points are the sum of those points.
Operator points = total points of all users under it * 0.03
For example, if 5 users entrust a total of 10 ETH to operator A for a total of 10 days, then the points obtained by the operator are 1010 days 24 hours/day * 0.03 = 72. Of course, if the operator itself also has staked funds, it will also receive corresponding staker points. I will not give an example here.
eOracle is the first Ethereum-native oracle, designed as a modular and programmable data layer secured by Ethereum and built on EigenLayer. It provides decentralized applications with native security for real-world connections and off-chain computational capabilities, backed by the decentralized network of re-staked Ether and Ethereum validators. The mission of eOracle is to create a fully decentralized, permissionless, and trustworthy neutral data and computation marketplace.
Comparison between eOracle and traditional oracle:
Closed market vs. open market
Traditional oracles act as intermediaries, controlling the cost, supply, and diversity of data. In contrast, eOracle’s data marketplace eliminates intermediaries, instead leveraging the largest and most diverse network of blockchain validators. This allows validators and decentralized applications (dapps) to interact directly within an open market, bringing a broader range of high-quality data to the ecosystem. The direct relationship between validators and dapps benefits both parties by creating cheaper and more cost-effective data. In this market, efficiency and inclusivity unlock new innovations and opportunities.
Closed operations vs. global distributed operations
Contrary to the decentralized nature of the blockchain ecosystem, traditional oracle nodes are registered and operated by a selected group of nodes. eOracle, supported by nodes operated by Ethereum validators, extends the security and values of Ethereum’s PoS (Proof of Stake) to the oracle space.
Brand Trust vs. Ethereum Security Trust
Traditionally, oracles rely on staking pools branded with their own identities, introducing additional trust assumptions and attack vectors for consumer applications. By leveraging Ethereum validators, eOracle allows applications to access secure data without introducing new participants or attack vectors into their security considerations.
Opaque vs. transparent and programmable
In the past, insular oracle systems with obfuscated aggregation were implemented to compensate for the limitations of verification. However, with the advent of EigenLayer and re-staking mechanisms, eOracle adheres to ecosystem standards for incentives, transparency, and crypto-economic security.
Restricted access vs. permissionless integration
Open and free access to information is not only a value of the ecosystem but also a key aspect of innovation. Any decentralized application on any blockchain can access and use eOracle data. Applications are no longer constrained by infrastructure limitations, which previously hindered industry progress, but can instead use the required data anywhere without sacrificing efficiency.
The security at the foundational level is provided by EigenLayer. EigenLayer’s smart contracts manage the network’s cryptographic identities, stake records, and validator sets, enabling eOracle to slash the funds of malicious validators.
EO-Chain is a dedicated Proof-of-Stake (PoS) blockchain operated by EigenLayer operators (Ethereum validators who have re-staked their ETH to secure the network). EO-Chain offloads computation from the main blockchain (i.e., Ethereum mainnet), reducing costs and latency while maintaining decentralized incentives for oracle operators. This setup ensures that all computations are conducted on-chain, guaranteeing transparency and security. The core components of this layer include:
These are smart contracts on the EO-Chain that aggregate and verify data submitted by validators. These smart contracts generate digitally signed and verifiable data by consolidating the signatures of data validators, taking into account their respective voting weights.
Smart contracts can be permissionlessly deployed on consumer blockchains to integrate eOracle data. These contracts can verify the validity of signatures generated by the eOracle protocol, enabling dapps to read and use the data they require.
eOracle offers WebSocket and REST API services, allowing eOracle data to be used as a pull oracle. Combined with the eOracle Solidity SDK, dapps can automate their data usage using Python, TypeScript, or other automation solutions.
The process is divided into four stages: Reporting, Validation & Aggregation, Publishing, and Utilization.
Reporting
Any publicly accessible real-world data can be added to the eOracle network, where eOracle operators (referred to earlier as “Data Validators”) begin reporting on this data. The data sources for these reports come from various endpoints, such as WebSocket or API.
Users can set the reporting frequency and specify the values they wish to extract. Once operators acquire the data, they sign it and send it to the EO-Chain as a transaction.
Any operator with stake above the threshold can participate in reporting, with the weight of their report determined by the amount of stake they hold. Reports from a specific operator cannot be forged by others, and once received, their participation becomes an immutable part of the EO-Chain’s state.
Operators running eOracle nodes (referred to earlier as “Chain Validators”) receive transactions containing signed reports. The nodes then cryptographically verify the identity of the reporters. Due to the permissionless nature of the protocol, the reports are censorship-resistant. Smart contracts periodically aggregate verified reports using a specialized scheme - Oracle Validated Service.
Dapps can use eOracle’s standard aggregation, which employs advanced algorithms and protocols to identify and discard outliers, or define custom aggregation tailored to specific use cases. To achieve consensus and ensure security, computations are distributed across multiple validators and verified by them.
The aggregated computation process and its results become an immutable part of the EO-Chain. The decentralized, transparent, and permissionless nature of this process ensures the authenticity, accuracy, and verifiability of the reports and aggregation results, which can then be published.
Publishing is the process by which eOracle’s aggregated data is released onto the target blockchain. The target blockchain refers to the network where any decentralized application (dapps) wishing to use eOracle data is hosted. To provide eOracle data, each target blockchain has a smart contract that verifies, parses, and approves the data signed and generated by EO-Chain.
To save gas costs and enhance efficiency, the aggregated data is hashed and mapped to a leaf node of a Merkle tree, then associated with the eOracle state and signed by the current set of valid eOracle validators. eOracle uses a BLS digital signature scheme to enable efficient participation of large-scale participants through threshold signatures and signature aggregation. This cryptographic scheme allows the use of scalable signature schemes to protect the necessary assets.
Decentralized applications (dapps), individuals, and institutions can seamlessly interact with eOracle through its Solidity SDK, allowing them to access and utilize aggregated on-chain data whenever needed.
Users interested in low-latency or customized updates can also use eOracle’s REST API. This allows users to receive all the components needed to validate on-chain data and then execute dependent transactions. All cryptographic, encoding, and parsing tasks are abstracted by eOracle’s Solidity and TypeScript/Python SDKs.
Off-chain infrastructure can use eOracle’s WebSocket interface to cache aggregated data, providing a smooth, low-latency user experience, enabling instant integration and execution on user services. eOracle’s low-latency interface makes on-chain security and transparency more accessible, offering users a seamless experience.
This workflow is similar to ChainLink’s, as illustrated below:
The eOracle Validator Set is integrated into the Ethereum PoS Validator Set through the Aegis protocol, allowing Ethereum validators to participate in the eOracle network without any permission requirements.
Traditionally, changing the validator set over time is referred to as reconfiguration. Known solutions generally involve reaching consensus on updating the validator committee during the process of creating new blocks. In other words, the decision made in block i includes the details of the committee that will generate block i+1.
However, the validators for the eOracle chain are not determined on the eOracle chain itself; instead, they are established on Ethereum through restaking and unstaking operations. As a result, each block on eOracle contains a reference (hash pointer) to the latest Ethereum block. This implicitly determines the committee for the next block: namely, the set of restakers on that Ethereum block.
The issue arises when this differs from the classic scenario: the committee defined in an Ethereum block is temporary and becomes invalid once its members unstake. If this happens, our blockchain might end up running without an active committee.
We address this issue by introducing a new design called Aegis, the algorithm behind the EO-Chain, which uses the main chain (Ethereum) to protect a derivative chain (eOracle chain), much like the mythological shield it’s named after.
Aegis defines the validator set by referencing from the Aegis block to the main chain block, setting checkpoints on the main chain to continuously make decisions, and resetting on the main chain to establish a new committee when the previous one becomes invalid. This design ensures security at all times and allows for rapid progress when latency between Aegis nodes is low.
eBFT is a secure and novel network adopted by eOracle, comprising a consensus engine (IBFT) and an external validator set reconfiguration protocol (Aegis). It leverages the IBFT consensus engine to package blocks, provide specific network capabilities, and manage the network. The integration of eOracle’s EigenLayer smart contracts, used in conjunction with the Tendermint-based consensus engine, fully implements the Aegis protocol.
IBFT (Istanbul Byzantine Fault Tolerance) is a consensus mechanism designed to ensure that a blockchain network can reach consensus even in the presence of malicious nodes. Based on the Byzantine Fault Tolerance algorithm, IBFT requires at least two-thirds of the nodes to agree in order to confirm transactions and generate blocks. It operates by rotating block proposals among validators, where each validator takes turns proposing a block while others validate and vote on it. IBFT is characterized by high throughput, low latency, and rapid finality, making it well-suited for enterprise-grade blockchain applications.
Tendermint, a core contributor to the Cosmos network, provides essential tools for distributed networks. Its primary product, Tendermint Core, is a leading Byzantine Fault Tolerance (BFT) consensus engine that ensures the security and scalability of blockchain projects. Additionally, Tendermint offers the Cosmos SDK, a popular framework for building blockchain applications, and the IBC protocol, which facilitates inter-blockchain communication. These tools enable developers to easily create robust, decentralized applications.
The external validator set reconfiguration protocol (Aegis) within eBFT is implemented through a set of core smart contracts that adhere to Aegis protocol specifications. These contracts integrate restaking functionality, configure the validator set, and record commitments to the eOracle state.
Key Features of eBFT:
State Transition
IBFT 2.0 defines a series of state transitions that determine the on-chain consensus for the blockchain state. A validator proposes a block to be added, specifying operations to update the blockchain’s state.
Validators in the Ethereum validator set accept a valid proposed block. Each validator’s voting power is weighted by the amount of tokens they have staked. A supermajority of validators must validate a block for it to be accepted.
When a validator proposes a new block, the other validators verify it and vote on whether to accept it. This process can be repeated if necessary. In each round, a threshold number of validators must validate and sign the block before it can be added to the blockchain. If the threshold is not met, the next round begins, and another validator proposes a block, repeating the process.
If the proposed block is validated and signed by a threshold number of validators, it is accepted and reflected in the blockchain’s new state.
The block proposer is selected at the block generation rate to construct the block. The selection mechanism for proposers is based on Tendermint, implemented through a deterministic selection algorithm. Validators with more voting power are selected more frequently.
Benefits of Consensus
Voting Power Proportional to Stake: A validator’s voting power is proportional to the number of tokens they have staked. This means that validators with more staked tokens have more voting power and therefore greater influence in network decisions. This mechanism provides economic incentives for validators to act honestly and in the best interest of the network.
Economic Incentives Promote Honest Behavior: Since a validator’s rewards are directly tied to their performance in the network, they are strongly motivated to maintain the network’s stability and security. Any attempt to undermine the network through malicious behavior would result in a loss of staked tokens, reducing the incentive for such actions.
Leveraging the PolyBFT Stack: eBFT utilizes the PolyBFT stack, which takes advantage of its external staking design and cross-chain capabilities. This design allows eBFT to interact more flexibly with other blockchain networks, enhancing its security and scalability.
Aegis Protocol Integrates with EigenLayer: The Aegis protocol is integrated with Ethereum’s native validators through EigenLayer, ensuring the security and integrity of the network. This integration not only enhances eBFT’s fault tolerance but also enables it to leverage Ethereum’s robust community and ecosystem resources.
As of August 6, 2024:
When discussing oracle projects, it’s impossible not to mention the leading project, Chainlink. To be honest, eOracle aims to create a decentralized oracle network similar to Chainlink, with an architecture that also follows the model of Data Sources (Exchanges) → Data Collection Nodes (API Providers) → Data Processing Center (Oracle Chain) → End Users (Smart Contract Projects). However, there’s no clear advantage for eOracle over Chainlink in this regard.
Moreover, Chainlink’s range of services extends beyond price feeds (which address the reliability and tamper-resistance of data transmission). They also offer VRF (Verifiable Random Function) for ensuring the verifiability and tamper-resistance of on-chain randomness, and Chainlink Functions for lowering the barriers to connecting smart contracts with Web2 APIs, tackling issues such as the tamper-resistance and security of custom computation data.
Chainlink is also renowned for its strong focus on developer relations, providing extensive documentation and tutorials to help developers quickly get started with Chainlink. They regularly organize various events and competitions, such as hackathons, developer conferences, technical workshops, and offline meetups, offering related incentive programs for developers.
The Chainlink team is also quite impressive:
Furthermore, Chainlink is unmatched in ecosystem partnerships, securing over 400 protocols with a TVS (Total Value Secured) of $20.057 billion (ranking first according to Defilama).
If there’s one area where eOracle has taken a step beyond Chainlink, it would be its OVS (Oracle Validated Service). eOracle allows developers to create various custom oracles and sell them on the eOracle marketplace. This is akin to a decentralized software marketplace, where eOracle acts as the platform. If this market succeeds in the future and creates a positive growth flywheel, eOracle could have the potential to take off further. In short, for beginner developers without specific needs, Chainlink is undoubtedly the first choice. However, for more experienced developers, eOracle might be preferable, as it allows them to sell their products to others.
Additionally, if eOracle can offer lower pricing compared to established projects like Chainlink in the future, it could become even more attractive to developers.
Participation Opportunities
Restake ETH and LST
Rewards Description: eOracle Points
As mentioned earlier, the primary way to earn eOracle points currently is by staking ETH and LST tokens. Staker points = Number of Tokens Staked (ETH or LST) × Hours Staked.
Those with the resources can even register as eOracle node operators. Operator points = Total Points of All Users Under the Operator × 0.03.
Interaction Guide: Here’s a demonstration of how to restake ETH and LST tokens.
First, you need to restake ETH and LST tokens on Eigenlayer.
Enter and select the token you wish to restake, connect your wallet, and complete the restaking process.
Note 1: Generally, liquid restaking protocols like Renzo or Etherfi cannot be used for restaking because these liquidity restaking protocols often do not grant users the right to delegate node operators. This means you cannot be sure whether your restaked funds are allocated to eOracle or other projects.
Note 2: For more details on various concepts related to restaking, you can watch the general knowledge videos on Bilibili by our community, LYS Lab.
Reference links
https://app.eigenlayer.xyz/avs/0x23221c5bb90c7c57ecc1e75513e2e4257673f0ef
https://blog.eoracle.io/the-eoracle-ambassador-program-building-like-elon-einstein-edison/
https://blog.eoracle.io/the-end-game-for-oracles/
https://blog.eoracle.io/the-ethereum-oracle-now-live-on-eigenlayer-mainnet/
https://blog.eoracle.io/the-eoracle-points-program/
https://blog.eoracle.io/introducing-eoracle/
https://web3caff.com/zh/archives/84690
https://www.binance.com/zh-CN/square/post/8491430140657
https://foresightnews.pro/article/detail/35268
https://www.maxcrypto.space/p/chainlink
https://www.tuoluo.cn/article/detail-10098238.html
https://foresightnews.pro/article/detail/32719
https://tokenterminal.com/terminal/financial-statements/chainlink