Decentralized oracle network Chainlink has announced the mainnet launch of the network update Off-Chain Reporting (OCR). Announced via the company blog, the update will serve as a replacement to the previous FluxAggregator model. This launch marks a significant milestone for the decentralized oracle networks in terms of scalability.
For Chainlink oracles, operating costs will likely be reduced by as much as 90% due to significant improvements in the efficiency of data computation across oracles. Additionally, the implementation of OCR stands to enable the Chainlink network to increase the development of universally connected smart contacts across Decentralized Finance (DeFi) markets.
This acceleration will also span throughout other industries. Users of DeFi markets can enjoy the immediate benefit of real-world data extended to smart contract applications being increased 10x.
Implications for further waves of progress throughout the industry are vast. An increase in on-chain data of this magnitude has the potential to spur further innovative measures across DeFi markets. This could also extend to blockchain-based gaming and decentralized insurance.
It could also spread to various other sectors with ties to decentralized technology as more datasets are made available. It would help by providing smart contract developers with the tools to leverage them for a growing variety of financial markets and products.
OCR marks the third version of the Chainlink Core client. As of its debut, all Chainlink nodes operating in-production will be running clients of both OCR and Flux Monitor in parallel as a means of generating security and scalability by way of redundancy. Such a measure will ensure the necessary automatic failover protection bearing the occurrence of a black swan event. The importance of multi client diversity will be well demonstrated if it serves to enhance the hyper-reliability of all Chainlink networks.
This increase in off-chain data is not the only benefit that OCR will pose for the Chainlink Network. Other enhancements include increased decentralization of oracle networks, higher frequency on-chain oracle updates, cost-efficient onboarding of new nodes as well as reductions in both on-chain network congestion and oracle network latency.
For Chainlink users, this can mean increases in accuracy, availability, and difficulty in tampering. Developers can likely expect data that is even more precise and current with regards to smart contract applications. This new data may also be more sensitive to small price movements.