Order

Ethereum

Security

<ul class="list-ic vertical"> 
 <li> <span>1</span> <a>ChainLink smart contracts are tamper proof, that is, their codes cannot be altered on interfered with.</a> </li> 
 <li> <span>2</span> <a>Manual selection and order-matching are possible to select Oracles.</a> </li> 
 <li> <span>3</span> <a>On-chain smart contracts are supported off-chain contracts to perform all the subtasks and all the data extraction from external resources.</a> </li> 
</ul> 
<p>ChainLink is a secured oracle network which resolves the technical challenge of connectivity. ChainLink is unique with other oracle solutions in its ability to operate as a fully decentralized network. These contracts are tamper-proof as no party can alter their code or interfere with their execution and this feature increases the trust in the smart contracts. With chainlink, smart contracts are externally aware, making them capable of interacting with off-chain resources which is necessary to replace the digital networks that are currently in use.&nbsp;</p> 
<h2 class="wp-block-heading" id="strong-on-chain-architecture-strong"><strong>On-chain Architecture</strong></h2> 
<p>ChainLink has an on-chain component consisting of three main contracts. The Reputation Contract tracks oracle-service provider performance metrics and validates the data.&nbsp; The Order Matching Contract takes a proposed service level agreement (SLA), logs the SLA parameters and collects bids from oracle providers. It then selects using Reputation Contracts and finalizes the oracle SLA. The Aggregating Contract collects the oracle providers’ responses and calculates the final collective result of the ChainLink query. Apart from these, it feeds oracle provider metrics back into the reputation contract. ChainLink contracts can be configured or replaced by users as needed and it is supported by their modular designs.</p> 
<p>The on-chain work flow is segregated between three steps: (i) Oracle Selection: A SLA is made up of requirements such as query parameters and number of oracles needed, specified by Oracle Service Purchaser. Other than this, the purchaser also specifies the reputation and aggregating contracts used for the remaining agreement. Purchasers can manually select, sort and filter oracles via off-chain listing services using reputation maintained on-chain, with a more robust set of data collected using logs of past contracts. The main intention of ChainLink is to maintain one such listing service which collects all chain-link related logs and verifies the binaries of listed oracle contracts. The use for these purposes is pulled from the blockchain that allows alternative oracle-listing services to be built. Purchasers submit SLA proposals off-chain and come to agreement before finalizing SLA on-chain. Manual matching is not possible for all contracts so Automated oracle matching is also being proposed by ChainLink through the use of Order matching contracts. ChainLink nodes then decides to whether to bid on the proposal or not with the contracts only accepting bids from nodes that fulfill SLA requirements. If the oracle service provider bids on a contract, then they need to attach a penalty amount which will be lost as per the conditions mentioned in SLA. Bids are accepted entirely in the bidding window and then oracles is selected from the pool of bids. To un-selected bids, penalty amount is returned and a finalized SLA record is created. Selected oracles are notified and start performing assignment detailed by SLA. (ii) Data Reporting: The off-chain oracles execute the agreement and report back on-chain after the new oracle record has been created. (iii)&nbsp; Result Aggregation: Oracles reveal their results, which will be fed to the aggregating contract. Then the aggregating contracts tallies the collective results and a weighted answer is calculated. The validity of each oracle response is then reported to the reputation contract. Finally, the weighted answer is reported to the specified contract function in USER-SC.</p> 
<h2 class="wp-block-heading" id="strong-off-chain-architecture-strong"><strong>Off-chain Architecture</strong></h2> 
<p>Off-chain, <a href="https://www.thecoinrepublic.com/2023/08/08/chainlink-price-prediction-keep-link-crypto-on-radar/" target="_blank" rel="noreferrer noopener">ChainLink</a> used to consists of a network of oracle nodes connected to the Ethereum network, and it is intended to support all leading smart contracts network. ChainLink nodes are powered by the standard open source core implementation that handles scheduling and connecting with common external resources, standard blockchain interactions. Software extensions known as external adaptors are also added to support additional off-chain services. Both public blockchains and private networks in enterprise settings enables the nodes to run in a decentralized network is the motivation for the chainLink network. ChainLink core node software is responsible for interfacing with the blockchain, scheduling and balancing work access its various external services. This work is formatted as assignments and each assignment is a set of smaller jobs known as subtasks processed as pipeline. Outcome of one subtask is the input for the next subtask and thus reaching final result. Apart from these subtasks, there are custom subtasks defined by creating external adaptors. With the development of different types of adaptors by different adaptors, it is essential to ensure compatibility within these adaptors. ChainLink operates with a schema system to specify inputs for each adapters and how they should be formatted and then adapters specify output schema to format output of each subtask.</p> 
<h2 class="wp-block-heading" id="strong-security-of-oracle-strong"><strong>Security of Oracle</strong></h2> 
<p>It is necessary to maintain the security of the oracle because if a smart contract gets incorrect or false data feed, then the payout can be made to the incorrect party and if smart contract insurance data feeds could be tampered by the insured party, then there are chances of insurance fraud. Users rely on blockchain for its security properties as it correctly validates data and prevent it from being altered. An oracle should serve as an effective trusted third party which provides correct and timely response with very high probability.&nbsp;</p>

ChainLink Smart Contracts Resolves the Challenge of Connectivity

Table of Contents

Thecoinrepublic.com

Other articles published on Oct 18, 2023

XRP Takes Center Stage: Fueling NFT Trades and Payments in the Futureverse

Vitalik Buterin Made a Statement About the Ethereums He Sent to Stock Exchanges!

Nigeria ranks 9th, as Morocco, and Tunisia top list of best African countries for remote work

Bitcoin price holds $28K range as institutional investor maneuvering boosts sentiment

US Treasury sanctions Gaza-based crypto exchange

Foxconn and Nvidia CEOs Announce Enhanced AI Collaboration

Join our free newsletter for daily crypto updates!