The Future of Cosmos and the Importance of Oracles in Inter-Blockchain Communication
The year 2022 was a challenging one for Cosmos, with setbacks in its vision of inter-blockchain communications (IBC) and the collapse of the Terra Luna ecosystem. However, there are still projects like dYdX and Seda that remain committed to the network and its IBC vision.
How Oracles Enhance IBC
- Smart contracts are limited in their ability to query data outside of blockchains.
- Oracles enable access to external data, expanding the use cases for smart contracts.
- For example, in lending markets, multichain oracles allow querying price data from multiple chains simultaneously.
The Technological Breakthrough of Seda
- Seda, a cross-chain oracle protocol, achieved significant success within a short period.
- Within eight weeks of its launch, Seda became the second-largest oracle, securing over $2.7 billion in total value locked.
- To scale efficiently, Seda implemented a system where the main chain aggregates data and pushes smart contracts to subchains.
Ensuring Security in Oracle Technology
- Educating users about building secure bridges and understanding liquidity is crucial.
- Smart price data modules, such as time-weighted average price, can mitigate risks in volatile environments.
- Establishing metrics like liquidation thresholds and collateralization ratios can enhance protocol stability.
Hot Take
Despite the challenges faced by Cosmos in 2022, the commitment of projects like Seda to the vision of inter-blockchain communications is promising. The role of oracles in enabling data transmission and expanding the capabilities of smart contracts cannot be underestimated. As the ecosystem matures and security measures improve, the potential for Cosmos and its IBC vision remains strong.
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