Blockchains are digital islands; their isolation makes it hard to connect with external data. As these networks evolve to support increasingly complex applications, they need oracles to integrate verified, off-chain data securely.
The Flare Data Connector (FDC) is a decentralized oracle that bridges the gap by securely reading the state of other chains and providing data proofs from Web2. It provides developers with the necessary infrastructure for advanced decentralized finance (DeFi), cross-chain interactions, and a future Web3 landscape enriched with real-world insight.
What role does the Flare Data Connector perform?
The Data Connector allows developers to verify events outside Flare’s ecosystem, enabling tasks such as verifying transactions on other networks, accessing real-time sports scores, or automating insurance payouts based on weather data.
Flare Date Connector overview. Image: Flare
As well as boosting the potential of decentralized applications (dapps) relying on real-world information, the Data Connector allows for multi-chain interoperability, enabling developers to tap into liquidity and data from multiple ecosystems through integration on Flare.
How does the Flare Data Connector work?
The Data Connector is powered by a set of independent “attestation providers,” responsible for gathering and verifying data from external sources. Here’s how it works:
- Request created: Users, dapps or smart contracts submit a request to verify specific information (e.g. “Has transaction xyz been confirmed on the Bitcoin network?”).
- Request forwarded: The Data Connector forwards the requests to all attestation providers through an Ethereum Virtual Machine (EVM) event. This data log, created by smart contracts to record key events, is not stored on the blockchain, thus keeping costs low.
- Data retrieved and verified: Attestation providers securely retrieve and verify data. Once at least 50% of providers agree on the result, the Data Connector publishes it; otherwise, the request remains undecided.
The Flare Data Connector fetches real-word data using attestation providers. Image: Flare
The FDC supports several attestation types:
- Simple payment
- Non-existence of a payment with reference
- Balance-decreasing transaction
- Block height confirmation
- Address validity check
The FDC also allows Flare to connect to Bitcoin, Dogecoin, and XRP Ledger, enabling FAssets, the overcollateralized trustless bridging system built by Flare Labs.
What sets the Flare Data Connector apart?
The Flare Data Connector has built-in protocols and processes to optimize both scalability and security.
- Attestation packing: This enables multiple data requests to be verified with a single hash, keeping costs constant and improving scalability.
- Branching protocol: Where attestation providers disagree on a result, this function allows validators to pause operations until discrepancies are resolved, ensuring a safe, idle state and reducing the risk of chain forks (where validators would need to roll back transactions).
- The CCCR protocol (Collect, Choose, Commit, and Reveal): This mechanism prevents collusion by requiring providers to commit hidden answers and later reveal them for verification.
Flare Data Connector use cases
The Data Connector supports a growing array of innovative and practical applications, including:
- 🔗 Cross-chain DeFi: The Data Connector enables applications to confirm transactions on external blockchains and supports FAssets, Flare’s system for integrating non-smart contract tokens like Bitcoin and XRP into Flare, where they can be used in DeFi.
- ⏱️ Real-world applications (RWA): Access to time-sensitive information—such as sports scores or financial market events from APIs is enabled through the Data Connector. For instance, OI Predict is a prediction market that uses FDC to settle the prediction about the outcome of sporting games, showcasing how data from external APIs can be securely transmitted on-chain using FDC.
- 🛡️ Smart contract insurance: The Data Connector enables secure event verification, supporting platforms like GuardFi in delivering accurate, decentralized claims processing.
- 🆔 Decentralized identity verification: Flare’s model could become a blueprint for regulatory-compliant digital identity solutions. A trial is currently taking place to demonstrate how a KYC-compliant (know-your-customer) onboarding experience for Chinese visitors in Hong Kong can successfully verify identity without revealing personal information.
Expanding future use cases
Flare’s Data Connector bridges the gap between blockchains and real-world data, powering diverse applications in DeFi and new use cases like regulatory-compliant identity verification. Regularly updated with new features and data types, it aims to provide developers with a secure, scalable infrastructure to drive blockchain innovation, unlocking the transformative potential of integrated blockchain ecosystems.