What is a Blockchain Oracle? Umbria’s Oracle System Explained
No, we’re not talking the clairvoyant old lady in The Matrix. In the Web3 space, oracles connect blockchains to the off-chain physical world. This means decentralized apps (dApps) can access and interact with traditional external data sources and systems. This ultimately enables smart contracts to execute based upon this IRL information, which can be anything from temperature and stock market data to football match results and flight details.
The Role of the Narni Bridge’s Oracle
Umbria’s bridge oracle determines the finality of transactions on the underlying networks’ blockchain (finality being the moment that a cryptocurrency transaction is guaranteed/final and cannot be cancelled, altered or reversed) and sends users’ funds to their chosen destination network from the liquidity pools.
The bridge oracle is a partly-on-chain, partly-off-chain system, which negates the unnecessary on-chain operations that can be handled off-chain to dramatically speed up cross-chain transactions. It monitors activity on supported cryptocurrency networks by interfacing directly with multiple blockchain network nodes. It detects the Narni bridge transactions as they are confirmed on the underlying network’s blockchain and actions the necessary subsequent transactions to complete the user’s asset migration to the destination network.
Security
The oracle for the Narni bridge inherits the cryptographic security of the underlying blockchain network as a consequence of listening exclusively to network activity and honouring the underlying network’s consensus mechanisms. It cannot be triggered externally and has no direct interface with users. The security of the bridge oracle is a consequence of its stand-alone architecture. It doesn’t accept messages from outside users, it simply watches transactions arrive on the cryptocurrency networks and takes the appropriate action to finalise the bridging transaction.
The oracle is able to infer which network the user intends to bridge to by noting the wallet address that received the asset. Transactions broadcasted by the oracle are final due to the immutable nature of the blockchain. The oracle is designed in such a way that it can be upgraded, maintained or shut down in the event of an emergency. Due to its partially off-chain nature, its configuration and deployment across time is very flexible.
It is also extremely robust against malicious attack for two reasons:
a) It does not need to accept messages from anywhere except the trusted underlying network nodes
b) The oracle can operate from a secret location and can be redeployed in a completely new location at any time.
Development of the Narni Bridge’s oracle system
We’ve recently completed the build of a new infrastructure, which makes the Narni bridges’s oracle system more modular. The update has generalised the underlying core systems of the oracle so the code that each blockchain oracle requires can be more easily abstracted thereby reducing complexity and increasing efficiency for adding further blockchains to the platform in the future.
More details can be found in Umbria Network’s Whitepaper.
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