HALO, a new opportunity in DeFi industry in 2020, why is it so highly respected?
In 2020, the oracle machine market headed by Chainlink is developing rapidly
Needless to say, the popularity of DeFi is now quite like the beginning of 2017. The related fields around DeFi have been paid more and more attention. For example, there are many opportunities in oracle machine, which offers quotations for DeFi products. Phenomenon-level projects like Link have already appeared.
With the rise of DeFi products, people realize that code, that is, law, has really begun to penetrate into the world and become more and more important. DeFi has made many attempts and explorations in such a professional and complex financial field.
According to the data of DeFi Market Cap, the current market size of the whole DeFi field is close to 8 billion US dollars. In the oracle machine market, which is closely related to decentralized financial projects, the market value has also doubled, jumping from 1.152 billion US dollars at the beginning of the year to the current level of about 3.275 billion US dollars, with a cumulative increase of 184%; The total market value accounts for about 1% in the whole cryptocurrency field, an increase of 317% compared with the beginning of the year.
Growth of total market value of oracle machine projects in 2020 (source: Coinmarketcap； Data up to: August 6, 2020)
In Chainlink, after a user sends a data request on the chain, each node operator will provide API information to the user. In the service process, nodes can get LINK token as a reward. DOS Network, as a decentralized oracle machine network, also obtains the data needed by smart contracts through the nodes under the chain.
Although the leader project Chainlink occupies the vast majority of the oracle machine market, it can be seen from the data of Coinmarketcap that the market value of this project in the oracle machine market has not increased significantly since 2020, and has remained at about 88%, and even declined greatly in some time periods. This shows that with the expansion of Chainlink market, other oracle machine projects are also developing rapidly. Such as Chainlink, HALO, BAND, NEST, DOS and Tellor.
Issues with current oracle machine projects
The application on blockchain network is called decentralized application (DApp). DeFi is DApp of finance. All DApp are implemented based on smart contracts. Without oracle machine, the development of blockchain will be limited to using only a little bit of asset data in the chain, which obviously does not meet people’s expectations.
In the DEFI protocol, most of them need to use chain price; For example, the closing price required for mortgage lending, the timely price required for transaction flash exchange, and the clearing price required for financial derivatives, etc. If there is no price on the chain, these DEFI protocols cannot complete the logical closed loop on the chain. At this time, it is necessary to use a price oracle machine like LINK to solve the problem of missing price information in the chain.
A practical and efficient DEFI protocol needs an oracle machine which can provide a “highly deterministic market information source” to provide the core data such as price information and volatility for the protocol.
However, most of the current oracle machine projects either have directional errors or have incentive mechanism design problems. As the connector between the real world and the blockchain world, including LINK, whether Oracle is centralized or not has always been a key issue in the exploration of major blockchain projects.
HALO came into being. HALO adopts decentralized prediction machine scheme and node ecological mechanism of quotation+double-role authentication. Any user can become a quotation node through low threshold pledge HALO, and get mining reward. However, institutional authentication nodes audited by HALO community and ordinary authentication nodes with high threshold can provide ultimate security for the whole network in authentication and arbitration. This mechanism takes into account both decentralization and data anti-attack.
For the quotation node, any user can become a quotation node after meeting the specified mortgage rate; Authentication nodes are divided into two types: One is the 25 institutional authentication nodes selected for HALO. This kind of node is applied by a third party in the name of an institution, and can become a formal institution authentication node only after it is approved by the HALO network and a certain number of Halos are locked.
In HALO network, the main differences among the three types of nodes are as follows:
The other is the common authentication node. Under the condition that enough HALO is mortgaged as a security deposit, any user can become a authentication node.
Oracle machine market brings new opportunities
Recently, the rapid development of DeFi ecology has brought an opportunity to the oracle machine market. Except Chainlink, which successfully ranked among the top ten cryptocurrency market value rankings last month, the token price of most other oracle machine projects has also shown a soaring trend of multiple or even dozens of times without exception.
Oracle machine in 2020 is expected greatly. From the perspective of DeFi market, people are willing to pay for reliable and tamper-proof data sources. With the diversification of blockchain application scenarios, it has gradually become a trend to build a platform to realize the unified integration of blockchain and the outside world of blockchain. In this way, the demand for oracle machine will become stronger and stronger. Related HALO projects and research will also show a substantial increase.
These projects, innovations and applications will make the communication between blockchain and the current Internet or the real world more efficient and real. The advantage of HALO is that the threshold for ordinary users to be data importers is greatly reduced, which can greatly encourage more data off the chain to be sent onto the chain. HALO, as a tunnel for data interaction between blockchain and the real world, has many application scenarios. By using the random signal marking technology to select the quotation group, it can continuously provide safe and effective quotations for all blockchain applications that need to interact with data off the chain: Crypto asset derivatives trading platforms, insurance applications, lending platforms, decentralized forecasting markets, blockchain-based Internet of Things applications, and so on. Hence, this kind of advanced prospect prediction may be the main reason why oracle machine system projects like HALO are favored.
Although it is in its infancy, its potential can still be expected.
The soaring price of oracle machine has given the market more confidence. However, it is necessary to be wary that the development of oracle machine technology is still at a very early stage. On the premise of no use demand, the bullish and active investment in oracle machine projects in the market is more due to FOMO sentiment. Furthermore, the emerging forecasting machine project has the characteristics of centralized assets, small market volume, low transaction depth and so on. The relevant oracle machine currencies can be expected in the short term.