How Do Decentralized Oracle Networks (DONs) Improve Data Integrity for Smart Contracts?
DONs improve integrity by sourcing data from multiple independent nodes and aggregating it using cryptographic methods, such as a median or weighted average. This decentralization makes it exponentially harder for a single entity to corrupt the data feed.
The consensus mechanism among the nodes ensures that the final data delivered to the smart contract is robust, reliable, and resistant to single-point-of-failure attacks.
Glossar
Data Integrity
Provenance ⎊ Data integrity within cryptocurrency, options trading, and financial derivatives fundamentally relies on establishing an immutable provenance for each transaction and data point.
Decentralized Oracle Networks
Architecture ⎊ Decentralized Oracle Networks (DONs) represent a robust infrastructure designed to provide reliable external data to smart contracts without relying on a single, centralized entity.
Integrity
Data ⎊ Data integrity is the assurance that market information, particularly asset pricing feeds from oracles and trade execution records, remains accurate, consistent, and unaltered throughout its lifecycle.
DONs
Data Availability Guarantee ⎊ The mechanism ensuring that off-chain computation results or data required for on-chain verification are published and accessible to the network validators when needed, preventing computational deadlock or denial of service.