Chainlink, a major decentralized oracle network, makes it easier for the universal connection of smart contracts. Blockchains can securely interact with external data feeds and payment systems with the help of Chainlink. Of course, Chainlink plays a crucial role in expanding the capabilities of smart contracts by enabling access to real-world data and off-chain computation while maintaining the security and reliability guarantees inherent to blockchain technology. Despite being one of the leaders in the decentralized oracle space, Chainlink has several limitations. However, some of these limitations can be overcome by QED blockchain oracle network.
For example Chainlink has an average refresh rate of 120s, limiting many decentralized applications. They cannot deploy services requiring a faster refresh rate or demand lower data finality. Chainlink also embeds a lot of financial risk to protocols that rely on algorithms to manage collateral ratios in the event of sudden market swings.
While, QED is more effective in that it provides a refresh rate of 0.5s, enabling much more demanding financial market applications to exist. It also enables more automated high-frequency applications, as is expected in the machine-to-machine economy.
QED has the ability to offer an automated resource to control data quality. Thus, the protocol requires the utilization of external collateral bonds as their smart contract. QED rewards node operators who prioritize consistency and value. Existing oracle solutions such as Chainlink are unsuitable for commercial dApps. The same risk checks, accuracy measures, and aggregation formula in Chainlink protocol are also used without considering the commercial risks involved.
QED’s economic incentive model optimizes the performance of the ecosystem and the value of the QED token. The QED tokens are then given to oracles to incentivize and allocate ownership to ensure a healthy ecosystem. Most accurate oracles take control of the protocol to maintain high accuracy models.
If we are looking at true decentralization. Chainlink is decentralized in its oracle network (DON). Hence, it requires trusted and validated third parties during the execution and claim phases. Since it requires trusted and validated parties, it diminishes any decentralization argument and depreciates any cost benefits that exist for using smart contract technology.
QED, a decentralized oracle protocol, aims to achieve trust issues by distributing data points among multiple entities and modeling the blockchain network. DelphiOracle is the base software for QED’s and is the most used protocol on WAX.io. This is the most trusted blockchain ecosystem for NFTs, dApps and video games. The DelphiOracle has served as a multi-party source for truth, providing smart contracts with real-time prices for asset pairings on various blockchain networks for more than four years.
During the Black Thursday event – a major crypto crash that happened on March 12, 2020, Chainlink oracles stopped delivering their data. Operators could not push their transactions through, leading to the prices of the Chainlink reference data contracts being stuck during the crisis. Hence, operators had to unwind the previously submitted transactions using normal gas prices to push emergency transactions to help keep fees updated. Although the nodes remained stuck for about two hours, the Chainlink team was quick to respond to the situation.
QED protocol for oracle, the DelphiOracle software, was the only oracle that did not fail during the crypto black Thursday event.
Staking and economic incentives control the security in the Chainlink system. Hence, the link is subject to inherited risks as it runs on top of the Ethereum network. Thus, any bugs or issues within Ethereum always cascade down to Chainlink. For example, in September 2020, several Chainlink node operators suffered a spam attack, resulting in the draining of 700 ETH from their wallets.
The attack affected how node operators respond to queries, and thus resulted in high gas costs associated with Ethereum, and the use of a third token tied to network transaction costs. Oracle protocols such as Solana-based data oracle Pyth Network were hacked. The hack resulted in countless Mango Market BTC/USD pair traders suffering unfair liquidations with no recourse facilities.
The QED DelphiOracle is more secure as it has never been hacked. It has managed to deliver over 25 data points to various blockchains. QED ensures that its customers transact safely.
While Chainlink is known for its leading role in implementing decentralized oracles, it fails to achieve full decentralization and commercial viability. Evidence in the market shows that QED takes a unique approach in addressing flaws in oracles and other decentralized oracle protocols. So while there still is work to do to resolve these flaws, it looks like QED is a step ahead of others, especially concerning security and resilience.