Episode 64: Makerdao (DAI) with Nik Kunkel

MikoBits Blockchain NFT and DeFi show

On Oracles, trust vs cost: lack of trust is expensive

What are Oracles? It's this mechanism for getting data from off of the blockchain onto the blockchain. And, you know, predominantly, those Oracle's are used for prices of things. And most of DeFi right now, right is utilizing credit to some extent, right. So you need to know the prices of things to know how much you should let someone borrow. You know, you need to know the prices of things to know when you need to liquidate right up position. So Oracle is really critical infrastructure to the functioning of DeFi. And so I think he kind of touched on one of the issues, which is, how do you, as a user, trust the data that the Oracle is showing. So that's one of the big problems. I think the other problem is cost. Right. So how expensive is it to run an Oracle? And I think you'll find that frequently, you end up having to make a trade-off there. Right, in terms of the security of the Oracle versus the price?