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Glossary

Optimistic Oracle

November 21, 2023 - Around 2 mins mins to read

Understanding the Optimistic Oracle

An optimistic oracle is an oracle that combines decentralized systems, such as blockchains, with real-world data. In this type of oracle, data is considered true if it remains undisputed within a specific timeframe. Unlike a price-feed oracle, which provides on-chain price information without error protection, the optimistic design offers a different approach.

Optimistic oracles have unique capabilities compared to price-feed oracles. While price-feed oracles primarily focus on asset prices, optimistic oracles can also provide arbitrary data and fulfill long-tail information requests that may not be feasible for price-feed oracles.

The optimistic oracle has a key advantage in its ability to protect smart contracts and users from manipulation of external data feeds. If incorrect data is detected, it can be disputed. This feature sets it apart from other oracle solutions, as their security relies solely on the reliability of their data feed.

Author: Hart Lambur

Hart Lambur is the co-founder of UMA, a decentralized financial contracts platform that aims to enable Universal Market Access. He has a background in computer science and previously worked as an interest rate trader at Goldman Sachs during the financial crisis. In 2013, he co-founded Openfolio, a personal finance tracking platform that was later acquired by a financial planning firm. Currently, he leads a team of researchers at UMA focusing on financial contract and oracle design.

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Glossary

Optimistic Oracle

Understanding the Optimistic Oracle

An optimistic oracle is an oracle that combines decentralized systems, such as blockchains, with real-world data. In this type of oracle, data is considered true if it remains undisputed within a specific timeframe. Unlike a price-feed oracle, which provides on-chain price information without error protection, the optimistic design offers a different approach.

Optimistic oracles have unique capabilities compared to price-feed oracles. While price-feed oracles primarily focus on asset prices, optimistic oracles can also provide arbitrary data and fulfill long-tail information requests that may not be feasible for price-feed oracles.

The optimistic oracle has a key advantage in its ability to protect smart contracts and users from manipulation of external data feeds. If incorrect data is detected, it can be disputed. This feature sets it apart from other oracle solutions, as their security relies solely on the reliability of their data feed.

Author: Hart Lambur

Hart Lambur is the co-founder of UMA, a decentralized financial contracts platform that aims to enable Universal Market Access. He has a background in computer science and previously worked as an interest rate trader at Goldman Sachs during the financial crisis. In 2013, he co-founded Openfolio, a personal finance tracking platform that was later acquired by a financial planning firm. Currently, he leads a team of researchers at UMA focusing on financial contract and oracle design.

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