Last week, ICON Foundation announced plans to integrate the ICON public chain with Chainlink, a leading decentralized oracle project. In this post, we’ll discuss this collaboration and the potential impact it has on both ICON and Chainlink.
What is a Decentralized Oracle?
Before we dive into the ICON-Chainlink integration, let’s define what a decentralized oracle is. By design, permissionless blockchains like ICON execute smart contract logic in a deterministic manner – all validator nodes should return the same result after executing the logic. This is easy for basic internal network operations like making ICX transactions and claiming I-Score, but it gets a little messier for smart contracts that involve external inputs like the current USD price of ICX or the current temperature in Tokyo.
A blockchain smart contract has no awareness of the outside world, so in order to produce accurate results, it needs a reliable source of data – that’s where oracles come in. An oracle feeds data about the outside world to a blockchain, which can then use the data to execute smart contracts in an accurate manner. For example, if you and a friend are betting on whether it’ll snow next Wednesday with a smart contract, you’ll need some sort of oracle to provide accurate weather information to the smart contract logic. In this case, the oracle could be something as simple as an API from weather.com.
In the example above, the weather.com API is a centralized oracle. Blockchain is all about decentralization, so relying on centralized oracles doesn’t really make sense. What if your friend secrelty paid off weather.com to misreport the forecast next Wednesday? The smart contract would have no idea, and you’d lose the bet. The solution to this is a decentralized oracle project like Chainlink that is capable of aggregating data from multiple sources in order to present an accurate truth.
We won’t get into Chainlink’s technical details in this post, but if you’re interested in learning more, I’d recommend starting with the whitepaper.
ICON x Chainlink = Awesome
Now let’s talk about why the ICON-Chainlink integration is such a big deal. In addition to being a smart contract platform, ICON is focused heavily on inteoperability and bridging blockchains to “hyperconnect the world”. Currently, ICON has completed a proof-of-concept for its Blockchain Transmision Protocol (BTP), which will allow private loopchain-based blockchains to connect via the ICON public chain. Commercialization of BTP is expected to occur in the first half of 2020, and public-to-public connections with ETH, EOS, and other industry-leading blockchains is in the works as well.
Since interoperability is ICON’s main focus, the integration with Chainlink allows all blockchains connected to ICON to access decentralized oracle data from Chainlink nodes – the implications are huge.
- Private loopchains that require decentralized oracle data will be able to connect to Chainlink nodes via the ICON public chain. For example, if an insurance company that uses a private loopchain needs accurate weather data that is aggregated from many sources, it can utilize the “off the shelf” ICON-Chainlink integration – this saves time and money.
- Instead of developing integrations with Chainlink, other public chains may choose to fetch oracle data via the ICON public chain instead.
I’m especially excited about the potential impact of the ICON-Chainlink integration on companies that are already utilizing ICONLOOP’s loopchain in a production environment. Having easy access to accurate data from decentralized oracles via the ICON public chain can help loopchain-based businesses streamline operations and design new services and products for customers.
With this ICON-Chainlink integration in the works, do you still believe ICONLOOP’s extensive list of private loopchain clients will never use ICX?