Blockchain was created in 1991 as a method of storing and protecting digital data. Blockchain is an open ledger that may be accessed by several parties at the same time. One of its main advantages is that the recorded data is difficult to change without the consent of all parties concerned. Blockchain technology aids in the verification and traceability of multistep transactions that require such verification and traceability. It can deliver secure transactions, lower compliance costs, and accelerate data transfer processing. Contract administration and auditing the origin of a product can both be aided by blockchain technology.
And the potential of blockchain and decentralization is further extended to a great level by smart contracts. A smart contract on the blockchain aims to make business and trading between anonymous and identified participants easier, sometimes without the need for a middleman. A smart contract reduces the formality and costs of traditional procedures while maintaining their validity and legitimacy. And with projects like QED Oracle Protocol, blockchain oracles and decentralization have reached a new level of efficiency.
QED: Decentralization With A Robust Economical Model
QED is an Oracle protocol and utility token concept intended to work with any blockchain or smart contract platform in the future. The original QED platform is made up of UX Network-based performance scaling components as well as Ethereum-based treasury and funding components for safe value layer settlement. The first version is responsible for Oracles sending data to smart contracts, which are commonly hosted on DeFi platforms. Other services or activities that Oracles must do to lay the groundwork for decentralized protocols and economies will be included in future rollouts.
So, what is the need for this? Here’s what you need to know!
Smart contracts, at their most basic level, can reduce transaction costs and boost efficiencies across a wide range of businesses. By removing the middleman and employing blockchain technology, they significantly reduce counterparty risk and provide transparency. Smart contracts, on the other hand, have various restrictions in terms of capacity.
For starters, smart contracts cannot pull data from or send data to any external system as a built-in feature. A financial smart contract, for example, would rely on market data to decide settlements. Similarly, before a trade finance contract can be completed, it must have trade documentation and digital signatures. A smart contract can’t use any of these traditional services directly, and it can’t generate any of the necessary data on its own. This constraint gives rise to the so-called “oracle problem.”
The oracle dilemma highlights the security and trust contradiction that exists between third-party oracles and smart contract execution that is not based on trust. It leads to the question of how real and dependable an external data source is. Smart contracts lose their “trusted execution” moniker as a result of this.
The limits of oracles when it comes to smart contracts are well-known, and multiple channels have risen to the challenge of developing decentralized oracle solutions. QED is an example of a platform that takes a novel response to the situation.
Why is QED The Solution?
With really no loss of implementation experience, QED embeds financial recourse in a codified and trustless smart contract environment. Decentralized protocols can now receive and transmit data while maintaining security and decentralization. This eliminates a significant barrier to entry for dApps and frees up capital seeking a reasonable industry experience. The key advantage of QED is that the reliability ranking of oracles is performed by a completely decentralized and automatic method that does not require the involvement of a third-party adjudicator.
This preserves the decentralized nature of the entire smart contract while also ensuring that no additional negotiation or arrangement is required of the parties beyond simply determining the fee for overall contract performance (which must always be determined).
As a secondary focus, the protocol employs an economic incentive model to optimize the ecosystem’s performance and the value of the QED token. Oracles are scored systematically on capital efficiency, ensuring that fees are directed to oracles with high actual history while eradicating underperformers.
Finally, to determine loss restitution, a post-execution resolution process is used. Customers can use the collateral claim process to recover their losses in the event of a loss. Furthermore, restitution of losses is obtained from collateral provided by incorrect oracles.
Oracles can supply data at scale to a significantly bigger customer base using QED, and smart contracts can access data at a frictionless cost that does not undermine their business case. QED provides Oracles and users with a balanced commercial environment in which to operate using decentralized protocols.
Oracle clients are protected against systemic risk by using bonded external capital.
The concept uses dynamic incentives and capital efficiency to incentivize Oracle’s correctness, resulting in increased system efficiency and performance.
The staking of QED tokens ties the token’s utility value to the return on Oracle collateral.
Lastly, when other oracle protocols have focused on technological advancements such as high throughput and frequency, QED is the first to consider the commercial side of things. Because it combines recourse mechanisms and other commercially oriented characteristics, it is projected to level the playing field between blockchain oracles and their consumers.