For years, the blockchain industry has been defined by the excitement surrounding smart contracts or tamper-proof digital agreements that automatically execute when a certain condition is met. Let’s talk about Why you should consider using hybrid smart contracts.
Popular DeFi applications nowadays allow users to borrow, lend, trade, save, and create assets now rely on the oracle network to fetch, validate, and provide aggregated data from the real world.
For DeFi giants the oracle network can collect accurate price data in a highly reliable and tamper-proof way. Price data is used to execute liquidations, determine lending rates, and verify limit orders by providing fair market valuations for cryptocurrencies, and more.
Hackers know this and often try to manipulate price data, causing great harm to DeFi applications that rely on low-quality data or insecure oracles. To avoid this problem, many DeFi applications have turned to oracle networks that fetch data from high-end data providers and include nodes operated by professional DevOps teams.
The hybrid rising smart contract model is also a boon for DeFi developers; instead of trying to figure out how to build an infrastructure to securely source price data for their smart contracts.
In addition to DeFi, the hybrid smart contract model is being used to build all kinds of interesting applications. Decentralized oracle networks are now capable of feeding data onto weather blockchains from sources like the National Oceanic and Atmospheric Administration through Google Cloud or Accuweather, meaning projects like Arbol It is possible to build parametric insurance policies that automatically payout when there is a certain weather condition.
The ability to receive insurance instantly when it rains too much or too little is vitally important to farmers around the world, most of whom do not have access to reliable insurance products. timely payments. With the combined smart contracts, a farmer can hedge against weather risks with just a smartphone, ensuring that just one bad weather season won’t cause bankruptcy.
Because hybrid smart contracts can interact with our real world, they can also be used to incentivize or incentivize important behaviors. For example, the Green World Campaign, along with Cornell University’s Cryptocurrency and Contracts Initiative (IC3), is building satellite imagery-based hybrid smart contracts to reward those who help reinvigorate agriculture on important lands, such as through afforestation. As oracle networks report increased tree cover in satellite imagery, land managers are paid for their hard work transparently and fairly.
Based on their very nature, blockchains cannot securely generate randomness. As a result, many blockchain applications that rely on random number generation are often attacked or exploited, reducing trust from users. This poses a huge problem when it comes to all sorts of NFT games and applications that are based on random outcomes, whether they be random prize pools, rare NFT drops, PvP battles, or even generating in-game items. With insecure or ambiguous randomness, the outcome of blockchain games and the rarity of NFTs can be called into question.
While the initial blockchain-based smart contracts played a huge role in the creation of tokens and dApps, the subsequent development involved smart contracts that could interoperate with anything outside beyond blockchain, connect this new world with our current world for a potentially powerful synergistic value proposition on par with the effect of the internet on computers.
Want to get more information about hybrid smart contracts – contact SmartOSC experts
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