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Chainlink and World Economic Forum propose Industry Oracle Standard

  • The World Economic Forum (WEF) develops a framework with Chainlink to foster the integration of oracles with legacy systems.
  • In addition to recommending the implementation of oracles, the WEF also advocates the adoption of cryptocurrencies.

In an effort to promote the interoperability of legacy systems with blockchain technology, Chainlink, and the World Economic Forum have published a paper. Entitled “Bridging the Governance Gap: Interoperability for Blockchain and Legacy Systems,” it is intended as a framework to facilitate integration, accelerate development, and encourage adoption of a “holistic standard” for building a bridge between legacy systems and blockchain environments.

Among the legacy infrastructure that the publication contemplates are governments, institutions, companies, among others, are mentioned. According to the WEF, these entities could create new use cases and especially increase user confidence in data secured by a blockchain or a distributed general ledger technology-based system.

In particular, the publication shows interest in the integration of smart contracts through oracles, such as Chainlink, with an external system. Oracles are middleware that facilitates the input of information from outside a chain (off-chain) into the blockchain (on-chain) in a secure and reliable manner, as shown in the image below.

Chainlink LINK

Source: http://www3.weforum.org/docs/WEF_Interoperability_C4IR_Smart_Contracts_Project_2020.pdf

The model was reviewed by industry leaders across the blockchain ecosystem and representatives from the World Economic Forum’s Centre for the Fourth Industrial Revolution, and provides several guidelines for the adoption of a holistic industry standard. Head of Data, Blockchain and Digital Assets for the World Economic Forum, Sheila Warren, had the following to say about the proposal:

This framework is an important step in providing concrete guidance to ensure that stakeholders can effectively evaluate opportunities, challenges, and potential actions to facilitate much-needed interoperability that can help unlock the benefits of distributed ledger technologies.

World Economic Forum advocates using cryptocurrencies

The framework envisages that integration between Chainlink, legacy systems, and smart contracts will bring benefits in key areas. For example, in increasing the transparency and accountability of public entities, reducing corruption, validation, and increasing the protection of important data. Chainlink co-founder Sergey Nazarov said:

The paper highlights some of the key considerations for both financial institutions and government IT initiatives, demonstrating their ability to become “blockchain-enabled” using their existing IT infrastructure with the help of a blockchain oracle such as Chainlink.

Therefore, the WEF makes recommendations that entities can implement to begin with the adoption of the framework. First, they recommend using an interoperable oracle service with several blockchains. Second, the WEF proposes contributing to open source communities.

Third, but not least the WEF also recommends the use of crypto assets. These could be Bitcoin, Ethereum or some of the stablecoins that are used to drive smart contracts in the DeFi sector. Nazarov added:

The ability to provide hyper-reliability in the connection between existing systems and next-generation smart contracts is what Chainlink has already been doing for some of the world’s leading enterprises for many years now. We are now seeing a rapid acceleration in the amount of enterprises seeking to utilize multiple blockchains through a decentralized oracle like Chainlink.

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Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

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