Chainlink (LINK) Update: OCR

Chainlink has officially announced the launch of its system of Off-Chain Reporting or Off-Chain Reporting (OCR) on  the main network. Chainlink is the most common and secure way to power universal 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 of people, Chainlink offers a fairer model for contracts.

“Historically, the growth of smart contracts has been linked to the on-chain ingestion rate of off-chain market data for the creation of vertically oriented use cases such as decentralized finance. The initial launch of Chainlink was largely associated with the initial growth of DeFi and continues to support the continued expansion of the field’s leading lending, insurance, and derivatives smart contracts/protocols. Chainlink OCR’s 10X scalability improvement will initially accelerate this existing dynamic and enable more DeFi applications to come to life. This latest version of Chainlink will also enable oracles to provide more data to other smart contract categories such as insurance, gaming/NFTs, and others, which is resulting in growth in several different industries. Chainlink OCR is rapidly accelerating Chainlink’s scalable future and minimized off-chain computing trust as the world’s leading provider of highly validated data Chainlink Co-Founder, Sergey Nazarov.

With the OCR version of Chainlink in smart contracts, the way data is collected by oracles and delivered to blockchain-based smart contracts significantly increases efficiency and reduces processing costs by up to 90%, the project specifically said. It will also enable the Chainlink network to accelerate the development of smart contracts both in DeFi markets and at different other institutes.

What is OCR?

OCR allows Chainlink nodes to collect data off-chain in a cost-effective manner, improving the scalability, security, and performance of the Chainlink network. Nodes can ingest data from one or more data sources, sign it with a unique private key, and then broadcast it to the rest of an off-chain oracle network.

When an adequate response threshold is reached, a single transaction containing the observation of each node is transmitted on-chain and then verified by a smart contract, eliminating the need for multiple nodes to pay blockchain transaction fees. As a result of this increased efficiency, OCR will increase decentralized management of oracle networks, reduce onboarding costs for new nodes, reduce on-chain network congestion on blockchains like Ethereum, reduce deviation values with on-chain oracle updates.

What Are the Benefits of OCR Update?

OCR has announced that with the announcement of new oracle networks, it will provide more data on-chain as additional advantages of this update:

  • Additional accuracy, availability and increasing disengagementless management system of oracle networks for Chainlink users,

  • High-frequency on-chain oracle updates to provide even more precise and up-to-date data to smart contract applications that may be more sensitive to small price movements.

  • Cost-effective commissioning of new nodes to make participation in oracle services running on the Chainlink network even more decentralized

  • Minimizing on-chain network congestion by reducing the load of Chainlink oracle networks on high-demand blockchain networks like Ethereum

  • We can sort it as oracle network update to ensure that data happens quickly to smart contracts even during blockchain network congestion and extreme market fluctuations. The release of OCR is considered the most important update in the history of the Chainlink Network and is the basis for accelerating the launch of additional oracle networks for the smart contract ecosystem as a whole in DeFi projects. With this increase in the amount and scope of data brought onto the chain, it is a harbinger that new smart contracts will be built.