We note that the most popular oracle within the cryptocurrency industry is the Chainlink project. However, that doesn’t stop other alternatives from popping up – and Binance Oracle is proof of that.

Overall, the BNB Chain network does need improvement. As Solidus Labs found out the day before, the network is home to the largest number of fraudulent blockchain projects. According to experts, 12.02 percent of the total number of smart contracts are scam – that’s 168,000 units.

Share of scam projects on different blockchains

Second place here goes to Etherium with a figure of 7.89 per cent.

How has the BNB Chain blockchain improved?

According to Decrypt’s sources, projects with Binance Oracle integration include some of the largest startups in the ecosystem: the Venus lending protocol, the Alpaca Finance revenue farming platform and the Ankr liquid steaming solution.

Note that the profitability of so-called revenue farming on DeFi-platforms is declining in a bearish trend. Analysts at Delphi Digital have shared a chart of profitable farming on the Aave (in red), Compound (in green) and Curve (in blue) platforms, all shown against a backdrop of ten-year US Treasury bonds (in yellow).

Profitable farming on different DeFi platforms

BNB Chain investment director Gwendolyn Regina commented on the announcement with the following quote.

Using oracles to significantly increase a smart contract’s knowledge of what is happening outside of the blockchain will be crucial, as it will be able to respond to external events with certain actions.

Projects in the Early Bird programme

Initially, Binance Oracle will provide price indices for the most popular digital assets. This will deepen the integration of the exchange with third-party platforms and will be the next step in strengthening the interoperability of different platforms.

Blockchain oracle flowchart

The blockchain above shows a simplified working principle of Binance Oracle. Information here flows from the offchain environment into the blockchain via a data provider and then the offchain oracle. It connects to the oracle on the blockchain, which processes the information in a convenient way for decentralised applications. Ultimately, the purpose of all this is to provide data securely to the blockchain. This is very important because incorrect data can lead to the theft of funds from crypto-asset loan platforms.

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The exchange’s announcement puts a lot of emphasis on security: intelligent algorithms will check price indexes for accuracy and consistency, all while synchronising with a data monitoring architecture. Binance representatives said that the entire process is carried out continuously. Each data stream will be monitored using a distributed “threshold signature scheme” and verified using Binance’s public encryption key.

Blockchain oracles are an important part of the cryptocurrency ecosystem, but they can also be the target of hacking attacks. A prime example is the recent hack of Solana-based trading platform Mango Markets. The CEO of cryptocurrency exchange FTX, Sam Bankman-Fried, stated that hackers managed to steal more than $100 million in that incident due to the peculiarities of the blockchain oracle associated with Mango Markets.

The attacker was able to withdraw the funds in the form of after the MNGO token artificially rose in value. For the oracle and the Mango Markets platform engine, such terms meant that the hacker supposedly had enough collateral for the loan, although this was not the case. Here is the relevant cue.

Oracle accurately reported the current price of MNGO. It’s just that the “current price” was not really close to the “fair price”.

MNGO token price movement on FTX during the hack

This is why FTX uses EWMA price bands and the IMF factor. The former concept does not account for dramatic changes in the price of an asset over short periods of time like a five-fold increase in a couple of minutes, while the latter changes the margin requirements of a trader’s account depending on the size of their position.


We believe the innovation will benefit what is happening in blockchain. And while Chainlink has traditionally been regarded as the leader among oracles, the new project will also contribute to the security of various DeFi projects. And this, in theory, will reduce the "income" of hackers and make the digital asset industry more secure.


What do you think about it? Share your opinion in our Millionaire Crypto Chat. There we will discuss other important developments related to blockchain and decentralisation.