Cardano (ADA), the 3rd largest cryptocurrency by market cap is strengthening its smart contract ecosystem. IOHK, the company behind Cardano, had made a series of announcements in the last few weeks highlighting how Cardano blockchain is progressing towards solidifying its newly launched smart contract feature. IOHK’s latest announcement that came yesterday during the ongoing Cardano Summit 2021, highlights its recent partnership with Chainlink to provide oracle integration for smart contract developers.
Cardano, a peer-reviewed and research-based blockchain were started by Ethereum co-founder Charles Hoskinson to solve some of the core issues with Ethereum e.g. super-high gas fees. Cardano is criticized multiple times for not having a Smart Contract where almost all other blockchains had it from the inception. But Charles Hoskinson, IOHK, and Cardano team has always ruled out criticism for building a foundationally strong decentralized ecosystem with peer-reviewed research. Cardano had recently launched its much anticipated smart contract via Alonzo upgrade and its native currency ADA had gained ATH crossing $3 USD on the crypto market.
What is an Oracle and why this partnership is important to Cardano blockchain?
A blockchain Oracle is a service that connects blockchain to off-chain data. It is important to understand that by the inherent design, any Blockchain is deterministic in nature that means on-chain data can’t access anything outside directly.
In a blockchain, the mechanism for agreeing upon a data value is called consensus, and determinism is important so that nodes can come to a consensus. You must have heard of Proof of Work (PoW) with Nakamoto Consensus or Proof of Stake (PoS) with Byzantine Consensus. Consensus is one of the key ingredients that make blockchain work in the first place.
But at the same time, if you are developing a DeFi application using a smart contract, you have to access data outside the chain to execute the contract constructs. For example, if you are building decentralized trustless parametric crop insurance, you will need weather data from weather channel APIs to execute your contracts. Oracle solves this problem while been decentralized. Chainlink is one such decentralized oracle network that provides data to a blockchain.
This partnership is very important because it will see Cardano integrate Chainlink’s oracles to support developers as they prepare to start building smart contracts for decentralized finance (DeFi) applications. The integration will potentially enable hundreds of billions of dollars of value locked to be secured on the Cardano Protocol, especially in the DeFi sector.
The Chainlink oracle network has a “tremendous amount of respect for the Cardano ecosystem,” especially the technical team behind the project and the collaborative nature of the community.Niki Ariyasinghe, head of blockchain partnerships at Chainlink Labs
Other partnerships that were unveiled during day 1 of the Cardano Summit 2021 include DISH’s telecom services, in an effort to boost adoption for the blockchain while transforming the entire model of the telecom industry. Partnership with Veritree, the global land restoration and tree planting verification company, will now secure its records using Cardano’s blockchain. Partnership with leading esports and gaming platform Rival, a fintech venture studio and fund UBX, and finance identity-based solution AID:tech.