Chainlink Releases New White Paper Focusing on Smart Contract Management

Chainlink (LINK) has presented its new technical document on Thursday, detailing a planned expansion and a shift toward creating oracle networks for computing. The proposal would see Chainlink generalize its oracle network into a “metalayer” of decentralized oracle networks, or DONs.

The new architecture supports a broader selection of use cases, extending its set of services to off-chain data computation. In Chainlink’s vision, these computational oracles would create a class of “hybrid smart contracts” where some of the logic could be downloaded to the oracles.

The new oracle networks would continue to focus on functions that blockchains or even layer two networks cannot perform, as Chainlink co-founder Sergey Nazarov explained to Cointelegraph. An existing example of this framework is Chainlink’s verifiable randomness feature, which offers a crucial component for any on-chain lottery that needs a reliable source of randomness. In Chainlink’s view, this dependency makes these applications an existing example of hybrid smart contracts. “DeFi contracts, 95% of them, everything except DEX, are already hybrid smart contracts,” Nazarov added, referring to his use of external pricing.

In the vision outlined in the whitepaper, Chainlink would generalize and expand its existing computational capabilities:

“The extension here is really in the fact that you can put an arbitrary executable on an oracle network to run. And this greatly expands what an oracle network can do. “

Nazarov denied that Chainlink is not trying to replace existing blockchains or layer two solutions. Its aim is to be a flexible and customizable solution for computing data, which could be used to scale existing DApps or even just run cumulative schemas and other layer two solutions.. Chainlink would offer the choice of consensus mechanisms and nodes to each individual user, who would choose the trust guarantees they need.

“The Chainlink network is a configurable set of validators that can be configured to do whatever you want. […] It is not a blockchain. They [los validadores] they do not give you the status and all the guarantees of a chain of blocks, but they can give you any other type of calculation for which you want to configure them ”.

The practical uses of such a network will largely depend on what users want to do, but Chainlink expects various services to take precedence. One of them is the Fair Sequencing Service, a solution against miners’ extractable value, or MEV. The idea behind the platform is to allow the oracles to calculate a “fair” sequence of transactions that would minimize the extraction of value generated by initial operations and other techniques. As Nazarov explained, Blockchains have no conception of time, which is part of the reason why ordering transactions fairly is difficult and why oracle networks can help.

Oracle-based computing to aid certain blockchain transactions is not entirely new, with Chainlink being the most notable provider of specialized data. Recently, the Maker team also proposed using their oracle for a similar purpose by instantly verifying the validity of an optimistic summary and facilitating instant layer two withdrawals through Dai.

The new Chainlink whitepaper also introduces a number of other features, notably which offers a stronger incentive to report fraudulent transactions called superlinear engagement. In this mechanism, bribing a Chainlink node to provide bogus data becomes quadratically more expensive as more participation in the network is compromised. The system is based on mathematical fraud tests that entitle observers to the combined participation of all nodes if they correctly report an instance of fraud. A potential attacker would have to bribe all observers for the total amount they could win, an amount that greatly exceeds the total stake.

The new conception of the Chainlink network aims to greatly simplify the deployment of smart contracts. According to Nazarov, too many teams are forced to build a central infrastructure just to support their DApp:

“I want them to come out and create this hybrid smart contract very fast, just like they do in the world of the web, you know, in a weekend. And they don’t have to solve all this shit! That’s what I think the future is. “

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Chainlink Releases New White Paper Focusing on Smart Contract Management

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