How Does an Off-Chain Reporting (OCR) Mechanism Improve the Efficiency of Decentralized Oracles?
OCR allows oracle nodes to sign and aggregate data off-chain before submitting a single, final, and cryptographically verified report to the blockchain. Instead of each node submitting its own data on-chain, which consumes high gas, OCR bundles the data.
This significantly reduces the transaction costs (gas fees) and network congestion associated with frequent, high-fidelity data updates.
Glossar
Reporting
Disclosure ⎊ Reporting within cryptocurrency, options trading, and financial derivatives fundamentally concerns the systematic conveyance of information regarding positions, transactions, and risk exposures to regulatory bodies, exchanges, and counterparties.
Off-Chain Aggregation
Mechanism ⎊ Off-Chain aggregation within cryptocurrency derivatives represents a process of consolidating order flow and liquidity from multiple decentralized exchanges (DEXs) or sources external to a primary on-chain order book, optimizing execution prices for traders.
OCR Mechanism
Computation ⎊ The OCR Mechanism, or Off-Chain Reporting, is an advanced oracle design where the computationally intensive task of aggregating and validating data from multiple sources is performed off-chain by a decentralized network of nodes.