eOracle and Oracle Validated Services: a modular oracle bet
Thread1,010 words
Thesis that eOracle's four-layer OVS model on EigenLayer can break the Chainlink and Pyth oligopoly with specialized, permissionlessly integrable oracles secured by $11.5B restaked ETH. Uses LINK at $13.5B FDV and PYTH at $4B as comps.
Key claims
eOracle secured by $11.5B restaked ETH
LINK FDV $13.5B, PYTH $4B
Likely to launch below $1B FDV and could reach a few billion
๐ฒ๐ข๐ฟ๐ฎ๐ฐ๐น๐ฒ = ๐ง๐ต๐ฒ ๐ข๐ฟ๐ฎ๐ฐ๐น๐ฒ ๐๐ป๐ฑ๐ด๐ฎ๐บ๐ฒ
Oracles are absolutely crucial data infrastructure for Web3.
It's a billion $$$ industry vertical, currently dominated by just a few large players like @Chainlink or @PythNetwork.
One of my major bets of the cycle is set to shatter this oligopoly and change the oracle game forever.
Meet @eoracle_network and the OVS model. โ
Oracles solve the challenge of securely and accurately feeding off-chain data (like real-world events or asset prices) onto a blockchain and into the apps that live on it.
Unfortunately, oracle services today follow a "one-size-fits-all" approach, which limits developer flexibility. While most oracle services aim to support and provide various types of data, most are in reality limited to price feeds.
Additionally, contemporary solutions have very limited validator networks, are often permissioned systems and lack crypto-economic security.
What needs to happen?
Web3 holds the promise of being a verifiable, open, and more equitable internet, freeing us from the constraints and flaws of the closed-source, walled gardens in Web2.
However, oracle infra is not yet ready to support this ambitious vision.
Why?
Let's have a look at Web2, where data provision evolved naturally into specialized services:
โค Sports data comes from sports experts (e.g. @Sportradar)
โค Financial data comes from financial experts (e.g. @YahooFinance)
โค Weather data comes from meteorological experts (e.g. Weatherstack)
Each provider focuses on their core competency and there is no "one-size-fits-all". A stark difference to the current data infrastructure in Web3.
Why does this specialization matter?
It significantly improves data access for builders which can plug into highly specialized services, able to provide specific data with the highest quality and reliability, while also covering their entire niche. Let's take Sportradar as an example. You can literally get live data on amateur football games in countries like Germany or the UK.
The same kind of specialization on different data types needs to happen in the oracle space, in order to make Web3 apps competitive at scale.
So, how can we get there?
The answer is simple: @eoracle_network.
eOracle is a decentralized oracle network built on @eigencloud, and extending Ethereum's trust layer to the oracle space.
It is however not a single provider that does it all.
eOracle pioneers the concept of Oracle Validated Services (OVS) to bring Web2's data specialization to blockchain dApps.
To do so, eOracle leverages a four-layer architecture:
โ ๐๐ฎ๐๐ฒ๐ฟ ๐ญ: ๐๐๐ต๐ฒ๐ฟ๐ฒ๐๐บ - ๐ง๐ต๐ฒ ๐๐ผ๐๐ป๐ฑ๐ฎ๐๐ถ๐ผ๐ป
โค The new internet's base layer
โค Provides fundamental security & decentralization
โค Home to >1 million potential validators
โ ๐๐ฎ๐๐ฒ๐ฟ ๐ฎ: ๐๐ถ๐ด๐ฒ๐ป๐น๐ฎ๐๐ฒ๐ฟ - ๐ง๐ต๐ฒ ๐๐ฟ๐ถ๐ฑ๐ด๐ฒ
โค Connects Ethereum validators to eOracle
โค Ensures cryptoeconomic security through restaking
โค Harmonizes validation and slashing across services
โ ๐๐ฎ๐๐ฒ๐ฟ ๐ฏ: ๐ฒ๐ข๐ฟ๐ฎ๐ฐ๐น๐ฒ - ๐ข๐ฟ๐ฎ๐ฐ๐น๐ฒ ๐๐ป๐ณ๐ฟ๐ฎ๐๐๐ฟ๐๐ฐ๐๐๐ฟ๐ฒ
โค Core infrastructure layer for all OVSs
โค Manages validator connections
โค Offers a framework & SDK for permissionless oracle creation
โ ๐๐ฎ๐๐ฒ๐ฟ ๐ฐ: ๐ข๐ฉ๐ฆ๐ - ๐ฆ๐ฝ๐ฒ๐ฐ๐ถ๐ฎ๐น๐ถ๐๐ฒ๐ฑ ๐๐ฎ๐๐ฎ & ๐๐ผ๐บ๐ฝ๐๐๐ฎ๐๐ถ๐ผ๐ป ๐ฆ๐ฒ๐ฟ๐๐ถ๐ฐ๐ฒ๐
โค Provides specific oracle services*
โค Built and operated by domain experts, tailored to specific dApp needs
* ) ๐๐ฐ๐ณ ๐ฆ๐น๐ข๐ฎ๐ฑ๐ญ๐ฆ ๐๐บ๐ฃ๐ฆ๐ณ ๐๐๐, ๐๐ณ๐ฆ๐ฅ๐ช๐ค๐ต๐ช๐ฐ๐ฏ ๐๐๐, ๐๐ฏ๐ด๐ถ๐ณ๐ข๐ฏ๐ค๐ฆ ๐๐๐, ๐ฆ๐๐ฑ๐ฐ๐ณ๐ต๐ด ๐๐๐
๐๐ฎ๐๐ฎ ๐๐น๐ผ๐ ๐ง๐ต๐ฟ๐ผ๐๐ด๐ต ๐๐ต๐ฒ ๐๐ฎ๐๐ฒ๐ฟ๐:
โค Data is gathered by specialized providers.
โค Providers connect to their relevant OVS.
โค OVSs process & validate data using eOracle infra.
โค Eigenlayer coordinates validator participation.
โค Ethereum ensures security and decentralization.
โค dApps access validated data from the OVSs with reliability & specificity.
What are the benefits of this architecture?
The architecture of the OVS model brings several key advantages that set it apart.
First, it enables a clear separation of roles, ensuring that each layer has specialized expertise, particularly at the application level.
This structure not only enhances security by establishing a strong foundational layer but also supports scalability, allowing the infrastructure to grow alongside demand.
Additionally, it creates a credibly neutral marketplace for specialized data and computation services, where each supply meets demand, abstracting complexities for app builders that do not have to bother to build it all themselves (e.g. specialized sports data oracles, etc).
For builders aiming to provide data and computation within their area of expertise, the OVS model offers simplicity and efficiency.
By lowering barriers to entry, it eliminates the need to bootstrap a validator network, leveraging Ethereum validators through Eigenlayer.
Similarly, it removes the requirement to build oracle infrastructure from scratch by using eOracle, allowing developers to concentrate solely on their specialized oracle products.
This drastically reduces development time, cutting it from years to mere weeks, and brings down costs without compromising security.
Will there be a token?
Yes anon.
The points program for @eigencloud operators that secure the eOracle AVS was launched back in April already and airdrop distribution to restakers is likely.
eOracle will also use an innovative merit-drop approach to distribute tokens to stakeholders who truly want or need the protocol to succeed, using a mechanism driven by on-chain metrics.
Check the comments for more info on this and what it means for you!
What I do want to point out though, is where the competitors / peers stand in terms of valuations:
- $LINK is valued at $13.5B FDV.
- $PYTH sits at $4B FDV.
eOracle will be the first and only oracle infra layer in the market that is modular, programmable & fully customizable.
It can be permissionlessly integrated on any chain (vs. chains having to pay Chainlink millions), and is crypto-economically secured with $11.5B in restaked $ETH.
All of this makes eOracle the most versatile and secure solution, and especially amid the modular expansion and imminent appchain season, permissionless & secure data access will be more important than ever before.
eOracle has already secured major integrations, including @ether_fi and @LayerBankFi, which leverage app-specific oracle & compute implementations built on eOracle for key processes within their applications.
Definitely see this reach a valuation of a few billions. If it launches below 1B FDV (likely will imo), this is probably not a bad play (pending tokenomics obviously).
NFA but recommend to DYOR.
Learn more about the @eoracle_network Merit-Drop. โ
x.com/zerokn0wledge_/status/1836434237056258481
eOracle partners with @ether_fi. โ
x.com/zerokn0wledge_/status/1846920174781313241
eOracle partners with @LayerBankFi. โ
x.com/zerokn0wledge_/status/1851712536695181691
3 more images on X
What came next ยท since 13 Nov 2024
Show how the 2 covered assets moved
This breakdown analyzes the project without making a call on the token, so price moves since publication are shown as market context.
Since then
Zero has written 14 more pieces on eOracle since this one.
Daily closes in USD from DefiLlama and Yahoo Finance. Only a bullish or bearish call in a thesis or market take is tracked; explainers, lists, maps and mentions are neutral context. Not financial advice.