Ethereum co-founder Vitalik Buterin believes that the UNI token is a great price oracle for the decentralized finance industry due to its high market capitalization.
Oracles are assets that “connect” the Ethereum ecosystem with data from the real world. The most popular supplier of oracles is now the Chainlink project. Buterin called it “excellent,” but noted that there is room for alternative solutions.
The decentralized oracle, according to Buterin, should be based on a large market cap token, as this would make a potential attack more expensive.
“The efficiency of the oracle is not that important. An ineffective oracle can be supplemented with a function so that it is called only if one party to the transaction does not agree with the price offered by the other party. At the same time, it is extremely important to increase the cost of an attack, and here the capitalization of an asset plays a key role, ”said the co-founder of Ethereum.
Synthetic and algorithmic assets like the DAI stablecoin rely on oracle data. The Uniswap exchange itself will benefit from using UNI as an oracle, thanks to the emergence of new and reliable synthetic assets. The capitalization of the UNI token, according to CoinMarketCap, is $ 22 billion.
Chainlink is currently busy developing new off-chain pricing oracles. Second-tier networks operate off-chain – almost all data associated with a smart contract is stored and calculated outside the blockchain.
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