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What Is the Difference between an ‘On-Chain’ and ‘Off-Chain’ Consensus Mechanism for an Oracle?

Off-Chain $=$ Speed/Cost; On-Chain $=$ Transparency/Cost (Execution Location)
Greeks.Live20.11.25

What Is the Difference between an ‘On-Chain’ and ‘Off-Chain’ Consensus Mechanism for an Oracle?

An off-chain consensus mechanism involves oracle nodes agreeing on the final price outside of the main blockchain, which is faster and cheaper. The final, agreed-upon result is then submitted on-chain with a cryptographic proof.

An on-chain consensus mechanism would require every node to submit its data and for the smart contract to perform the aggregation and validation, which is significantly more expensive and slower.

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