In the crypto world, an oracle is a crucial component that connects off-chain data to on-chain smart contracts. These play a vital role in making decentralized finance (DeFi) protocols possible, as they provide the necessary information for smart contracts to execute and trigger actions. One company leading the way in this space is DIA Data.
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With DIA’s novel, first-party DEX & CEX data scraping architecture that eliminates dependence on 3rd-party providers, it is poised to revolutionize the oracle industry. Dillon Hanson, the Business Development Manager at DIA Data, shares his insights on the current state of decentralized oracles and how DIA is making a difference.
Brief Introduction of DIA Data
Dillon starts the conversation by explaining how the original use case of DIA is to bridge the gap between the Web2 world and what happens in our day to day life and on-chain. Without this “Intermarry of information” these two would be isolated and inaccessible to each other. However, in the next era of Web3 where there are many different blockchains, there needs to be an oracle solution that can bridge the gap between them.
“As the industry has evolved, we’re in this cross chain ecosystem where there are multiple chains and the oracle use case has evolved beyond that.”
Dillon Hanson, Business Development Manager at DIA Data
Traditional token asset pricing still remains as the main demand for the data that DIA provides but what differentiates DIA Data from other oracle providers is their architecture. Dillon elaborates by explaining that they source data differently than other oracles. Rather than sourcing data from off-chain third-parties, DIA goes directly to the source. With data directly from the DEXs and CEXs, it allows them to provide improved transparency throughout their entire stack.
With direct sourcing customizable data feeds are also made possible as each data point is granular. To explain further, Dillon emphasizes that the direct source method prevents any tampering of data as it goes straight from the source to the blockchain. This increases trust in the data being provided on-chain and eliminates any potential for manipulation or inaccuracies.
Addressing Common Concerns with Oracles
There has been some fears circulating the Web3 community regarding hacks on oracles where pricing could be manipulated for a single party’s gain. However, Dillon pushes back on this narrative entirely by explaining that when third parties are involved, this can be a problem but for trustless direct source oracles like DIA Data, this is not an issue. With their recently announced Lumina architecture, they are transitioning into this trustless source oracle system. This eliminates the single point of failure that can occur with a centralized oracle provider and integrity of data is enhanced.
Additionally, this upgrade allows for the advancement of ZK technology which provides proof that data has not been tampered with. With such proof, it negates security risk by providing a trustless and transparent environment for data sourcing. On top of this, the team at DIA are implementing a cryptographic security system that’s mathematically proven. This duo layer system of security ensures that all data is fully vetted and secure before it gets integrated.
“We’re striving to support more assets than any other oracle.”
Dillon Hanson, Business Development Manager at DIA Data
By deploying dedicated contracts which are referred to as “scrappers” that pull data from swap events from specific liquidity pulls, DIA is able to provide much higher quality data. With data down to the pool level, concerns are alleviated that some have regarding the confusion of where exactly the data is being pulled from. This allows relief from inaccurate pricing that can result from market manipulations.
It’s no surprise that RWAs have been making headlines as of late, and with that comes to need for ZK proofs as discussed earlier. DIA Data, unlike other oracles, can provide this level of proof without sacrificing trust. The ability to go direct to the source also enables the oracle to provide data on various assets which broadens the scope of its applications.
Coverage and Accessibility
As the conversation continued, Dillon shared more insights into two core values the DIA holds: coverage and accessibility. With the aim to provide high-quality data on every asset class, DIA is certainly ahead of the curve compared to other oracles in terms of coverage. By tapping into various data sources such as Decentralized Exchanges (DEXs), Centralized Exchanges (CEXs), and pool level data, DIA is able to provide a comprehensive view of the market.
It’s becoming easier to deploy roll-ups on blockchains (a roll-up is basically a secondary blockchain that has some security characteristics of the main blockchain). With the ecosystem expanding, Dillon sees DIA expanding alongside it, reaching a high level of accessibility.
“For this what it looks like is transitioning from more of a permissioned protocol to a permissionless protocol.”
Dillon Hanson, Business Development Manager at DIA Data
The ability to deploy DIA oracles onto any chain will open up the doors to a wider range of applications. This level of accessibility combined with high-quality data will bring about accurate and reliable pricing for assets on any platform. Plus, with cross-chain compatibility, DIA is able to bridge the gap between different blockchains and provide accurate data across all of them.
The Three Components of The Lumina Stack
As the conversation began to come to an end, Dillon reviewed the three core components of DIA that make it stand out in the oracle space. Starting with feeders, these serve as the validator nodes on the chain. What these feeders do is fetch the most recent price data and run docker images. Essentially they are taking in all the real time trade data from all of the sources that DIA is sourcing. These validators are independently sourcing all of this information and delivering it onto the LaserNet.
Next, we have the pods. These pods are storing the price data on-chain and a smart contract creates the average out of all of the feeders’ data. Think of these pods as a storehouse where all of the data is securely kept and accessed by the smart contract for price retrieval. Finally, we have the Spectra, which serves as a bridge allowing for cross chain compatibility and data sharing across different blockchains.
With this three-layer architecture, DIA is able to provide high-quality data that can be accessed by anyone, anywhere at any time. This also ensures the accuracy of the data as it is independently sourced and validated by multiple nodes on the chain. The Lumina Stack not only provides reliable data for asset pricing, but it also bridges the gap between different blockchains and promotes interoperability in the decentralized finance space.
Final Thoughts
With the $DIA token being integral to the validation process, DIA is creating a self-sustaining ecosystem. Users will need $DIA in some instances to access DIA’s oracles. The feeders as mentioned earlier are incentived by this token for their services and stakers can also benefit by earning rewards for adding economic security.
The future is bright for the DIA oracle network as it continues to grow and expand its services. With the increasing demand for reliable and accurate data in the decentralized finance space, DIA’s role in providing quality data will only become more important. As more projects and platforms integrate with DIA, we can expect to see a significant impact on the overall efficiency and transparency of the DeFi market.
So, it is safe to say that DIA is not just a mere oracle network but a crucial component in the success of decentralized finance.