Blockchains have undoubtedly revolutionised our approach to data, trust, and decentralisation. But in their quest for security and autonomy, they've also become isolated fortresses.
These isolated entities face difficulties in achieving seamless communication with other blockchains or accessing external data from the open internet.
This limitation restricts the potential of decentralised applications that could thrive on interconnected data sources.
Let's take a look at how Flare's State Connector looks to solve this problem.
Whilst recognising the challenges that emerge from these isolated blockchains, the State Connector aims to offer a decentralised solution to help simplify the flow of data. Here's how:
The State Connector relies on specific entities, known as attestation providers, to vouch for the accuracy and integrity of this data. These providers act as intermediaries that verify and attest to the correctness of external data before it is integrated into Flare.
The attestation process initiates with a request. This request could come from a user, a smart contract, or any part of the Flare network that requires data from an external source.
Upon receiving the request, attestation providers spring into action to retrieve the required data, from third party sources.
Once the data has been retrieved, the attestation providers each provide their data to the State Connector smart contract, in what is called a commit-and-reveal method. This is done to ensure that each provider sources their own data and is not influenced by the data from other providers.
With multiple attestation providers in the ecosystem, it's essential to have a unanimous agreement on the data's validity. If more than half of the attestation providers submit the same information to the smart contract, then it is made public. If a consensus is not reached then the attestation has failed and would need to be re-submitted, if needed.
"The answers are stored in the State Connector smart contract for a week, where anybody can read them, including the original requester."
By bridging the gap between isolated blockchains and the broader internet, the State Connector unlocks a plethora of innovative use cases for decentralised applications (DApps). Some examples could include:
By harnessing the power of the State Connector, DApps can transcend the limitations of single blockchains and offer users a richer, more integrated experience, all while maintaining the core principles of decentralisation and trust.
A data provider's role is to gather information from real-world sources and submit it to the FTSO.
If the FTSO deems this information accurate, in relation to other submissions, then the provider is rewarded, along with any token holders who have delegated votes to them.
Data providers can obtain the required data from any source they wish. With regards to crypto price data, typical sources would be exchanges, price aggregators and other oracles.
It's important to have access to many different sources, as the data obtained may differ considerably.
Building out reliable and resilient infrastructure is critical to the success of any data provider.
Often providers choose to run their infrastructure using a cloud based solution, such as AWS, or Google Cloud.
A typical provider setup can include dedicated nodes, a price submitter tool, a database to organise and an application to process the data.
Once data has been gathered, it needs to be analysed and processed in some way before being submitted to the FTSO.
The data needs to validated and checks made to ensure any 'bad' data is excluded. This can all be done automatically, based on pre-defined conditions.
Each provider should create their own unique algorithms, that process the data in a way that ensures the final output represents what they themselves deem to be accurate.
Once data has been gathered, it needs to be analysed and processed in some way before being submitted to the FTSO.
The data needs to validated and checks made to ensure any 'bad' data is excluded. This can all be done automatically, of course, based on pre-defined conditions.
Each provider should create their own unique algorithms, that process the data in a way that ensures the final output represents what they themselves deem to be accurate.
Accurate submissions lead to more rewards, which in turn should lead to a provider gaining more vote power.
There is a cap on the maximum vote power any one provider can obtain, before the rewards their delegators receive are diluted.
Some providers also offer other incentives to gain additional vote power. This includes building useful tools for the community and NFT giveaways, amongst other things.
Data providers charge a fee for the service they offer. It's how they are able to fund the operation of their service.
The FTSO system gives a provider the freedom to set any fee they choose; however the higher the fee they charge, the less rewards their delegators will receive, which could drive them to delegate to a alternative provider.
