Mon, 11 Apr 2022 09:27:48 +0000
The Algorand ecosystem has seen unprecedented levels of adoption. The network has been rising in popularity as investors seek a sustainable and cost-efficient alternative to the expensive and slower blockchains.
Algoracle, a project created to provide Algorand with a native oracle service was created to bootstrap the ecosystem’s expansion. This can only move forward by connecting its decentralized applications (dApps) to the real world.
Algoracle facilitates this process by providing the network with a decentralized bridge to connect smart contracts with real-world data. This service is critical for the expansion of any blockchain-based ecosystem.
Data from Token Terminal indicates that Ethereum, one of the largest networks in terms of dApps numbers, saw an explosion in its monthly revenue. This growth was recorded from April 2020 when it stood below $1 billion to its current $14 billion.
The main driver for this growth has been the adoption of its decentralized finance (DeFi) protocols and non-fungible tokens (NFTs). Conversely, these dApps require an oracle service to operate, offer a product or use case, process transactions, and onboard more users.
Simply put without an oracle, there is no growth. At its yearly high, Algorand saw as many as 1.8 million active addresses. These users will support the network’s next era of adoption, but they need the tools and services that will enable it. Algoracle is the bridge that will make it happen.
Unlike competitive services, Algoracle leverages Algorand’s unique consensus algorithm. Called Pure Proof-of-Stake (PPoS), it allows Algoracle to operate as a fully decentralized service without the limitations of a traditional oracle.
In that sense, Algoracle is a step forward for oracle as it can provide newer and more complex dApps with a native Verifiable Random Function (VRF) mechanism. This improves the oracle’s performance, efficiency, scalability, and uptime.
Algoracle and the VRF mechanism features will enable the service to power a new branch of use cases. For example, smart contracts will be able to receive data, and their upgraded infrastructure will allow them to send data into the real world.
In that way, a user could receive notifications from their NFT marketplace, receive or send data on a decentralized exchange (DEX), and more. It is the next generation in DeFi and smart contract interaction. This could allow dApps operating with Algoracle to communicate and potentially support cross-chain transactions.
Over the past year, Algoracle has partnered with Brave New Coin, Kaiko, Nomics, AlgoGuard, Equito Finance, Glitter Finance, and many others. Their collaboration with Glitter Finance has enabled them to power their DeFi services comprised of a yield generation solution, a cross-chain bridge, and a cross-chain NFT marketplace.
This goes to show the importance of an oracle solution for the Algorand ecosystem and its vast array of use cases. When the partnership was announced, David Dobrovitsky, founder and CEO of Glitter Finance said:
The Glitter Finance technical team, working in concert with the technical team of Algoracle has developed new innovations that will greatly enhance and change the way blockchain and cross-chain bridges work and will allow for much greater solidity and stability for the Glitter Protocol (…).