Chainlink to Provide 10x Data With New System Upgrade

Decentralized oracle provider Chainlink has announced its largest network upgrade to date, which could reduce node operating costs by up to 90%, the firm said in a press release on 24 February.

Called Off-Chain Reporting (OCR), the new upgrade will change how the oracle network combines data from multiple sources, by introducing an off-chain consensus round. Up till now, the network had to bring the data on-chain — which was then aggregated — but this method is becoming less viable with time, mainly because of the rising gas costs and on-chain congestion. Chainlink’s co-founder, Sergey Nazarov, commented on the OCR upgrade:

“This newest version of Chainlink will also enable oracles to provide more data to other categories of smart contracts such as insurance, gaming/NFTs, and many others, resulting in growth across several different sectors. Chainlink OCR is rapidly accelerating Chainlink’s scalable future as the world’s leading provider of highly validated data and trust minimized off-chain computation.”

With OCR, Chainlink will now be able to aggregate data entirely off-chain — with each node signing off on its data source — and then passed to a smart contract on the blockchain, which verifies that a quorum of nodes agreed on this data. By doing so, Chainlink will be able to lower the gas costs of its nodes by 90% — as they will no longer be required to pay for multiple transactions to bring the data on-chain — reduce the load on the Ethereum network, and increase the amount of real-world data provided on the blockchain by 10 times.

OCR will further benefit some of the services already provided by Chainlink, such as the Proof-of-Reserve, which allows oracles to provide on-demand data regarding reserve funds. The upgrade will also allow Chainlink’s oracle network to provide “new types of trust-minimized off-chain computation”, further enabling smart contract applications to generate real-world value for users across different industries.