GENEVA, Dec. 9, 2020 /PRNewswire/ -- The World Economic Forum has collaborated with Chainlink, the most widely used decentralized oracle network, on a paper that lays out a new standard for integrating traditional infrastructure with blockchain technology. The paper, "Bridging the Governance Gap: Interoperability for Blockchain and Legacy Systems", proposes an open source framework to achieve interoperability between legacy systems and Distributed Ledger Technology (DLT) through the use of decentralized oracle networks. Blockchain oracle networks provide an easy-to-integrate abstraction layer that bridges legacy digital infrastructure and blockchain environments. This opens up a new realm of smart contract use cases for technologically-enforced financial contracts, automated insurance payouts, and more.
"Organizations have long recognized the importance of connecting blockchain systems to legacy infrastructure and data sources," said Sheila Warren, Head of Data, Blockchain and Digital Assets and Member of the Executive Committee at the World Economic Forum. "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."
Oracles are secure middleware that connect blockchain-based smart contracts with real-world data, enabling blockchain applications to interact with any off-chain environment, including legacy systems. The paper recommends that legacy stakeholders who currently operate large enterprise or government IT integrate with a decentralized oracle network composed of multiple security-reviewed nodes to provide security guarantees around both data integrity and data delivery from legacy systems to various blockchain networks.
The paper, reviewed by industry leaders across the blockchain ecosystem and representatives from the World Economic Forum's Centre for the Fourth Industrial Revolution, provides several guidelines for the adoption of a holistic industry standard:
- Contribute to or join a large open source community building on a common interoperability framework
- Adopt an oracle network that operates across all blockchain environments
- Use decentralization to validate the integrity of data inputs and provide highly available, tamper-proof data exchange
- Demand oracles that support access to authenticated data sources and credential management capabilities
- Utilize crypto assets to provide crypto-economic guarantees
- Leverage oracle networks with marketplaces and reputation frameworks to identify high-quality node operators
- Build on a generalized oracle network with multiple security layers for defense in depth
Chainlink Co-founder Sergey Nazarov said, "The existing systems powering global finance, global trade, and existing government systems do have a place in a blockchain-based future. By applying blockchain oracles, these systems can effectively be upgraded to work with blockchains. 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. 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."
To read the full white paper, visit http://www.wef.ch/interopblockchain.
Chainlink is the most widely used and secure way to power universally connected smart contracts. With Chainlink, developers can connect any blockchain with high-quality data sources from other blockchains as well as real-world data. Managed by a global, decentralized community of hundreds of thousands people, Chainlink is introducing a fairer model for contracts. Its network currently secures billions of dollars in value for smart contracts across the decentralized finance (DeFi), insurance, and gaming ecosystems, among others.
About the World Economic Forum
The World Economic Forum, committed to improving the state of the world, is the International Organization for Public-Private Cooperation.
SOURCE Chainlink; World Economic Forum