World Economic Forum (WEF) Partners with Chainlink to Release an Industry-Wide Oracle Standard
- WEF partners with Chainlink to conceptualize an industry oracle standard.
- Open-source frameworks to connect Traditional and Digital Ledger Technologies.
Geneva-based World Economic Forum (WEF) has partnered with Chainlink, a decentralized oracle network, to create an industry-wide oracle standard that lays out new ways to integrate traditional software into the rising DLT systems blockchain technology.
In a 40-page concept paper titled, “Bridging the Governance Gap: Interoperability for Blockchain and Legacy Systems,” co-authors Sergey Nazarov, founder of Chainlink and members of the WEF, aim at interoperability between DLTs and the legacy systems to harness the power each of the systems offers to institutions, corporations, and governments. The paper reads,
“The approach to building blockchain middleware as the middle layer that can bring both the systems together will help in accelerating the positive effects of blockchain and distributed ledger technology where they are used and bring out the best of both worlds.”
However, the integration of the two fields faces a challenge in enticing enterprises to adopt DLTs given the lack of direct connection between the legacy and DLT systems, the paper further explains. To this end, the paper advocates the use of decentralized oracles, proposing an open-source framework standard to connect smart contracts to external data sources to integrate traditional and DLT systems.
The paper explains technical details on how legacy systems and DLTs can integrate to offer more efficient systems. For legacy companies wishing to use blockchain systems, It further explains how digital systems can be enhanced to talk to smart contracts.
This open framework structure aims to improve transparency and accountability, reduce corrupt behavior using smart contracts, and enhance data validation through decentralized oracles and information security.
A move towards DLT-legacy interoperability is a ‘crucial step’ to bring blockchains' desirable qualities to the traditional enterprise world. The authors further call on the governments, authorities, and policymakers and enterprises
“to evaluate these suggestions as per their operational environment and initiate building capabilities for exploiting and employing DLTs for their existing legacy systems.”
Despite the potential that smart contract systems offer to legacy systems, the paper issued several challenges and limitations DLTs face, including unclear regulation, limited scalability, high transaction fees (on some), and data dissemination risk on public blockchains.