Gem Spotlight- Oasis Network
For this edition of Gem Spotlight, I wanted to take a look at a project called Oasis Network and why I think it could be a project to watch over the coming few weeks for its launch and going forward as a project in 2021. Oasis Protocol Foundation looks to support projects focused on making that privacy-first Internet a reality. From building privacy-preserving applications to developing more powerful tools for the network, to improving how it operates.
Introduction
If you could summarize the progress of cryptocurrency in 2020 with one word, it would likely be the word “DeFi”.
Decentralized Finance or DeFi (which is technically two words formed into a portmanteau) is the ecosystem in which all participants can take part in financial services based on a network not owned by a centralized authority. This ecosystem has blown the doors wide open for opportunities, with record numbers for participants, record highs on the amount of money in the system, and projects available. This isn’t just about owning a cryptocurrency independently of a bank, however. As of today, DeFi lets you participate in projects similar in nature to savings accounts, money markets like Aave, collateral loans, and hedge funds. In addition, crypto lends itself to extra abilities unique to the DeFi space like liquidity mining (also known as yield farming), governance, and automated market makers. DeFi is very likely here to stay.
Future-Proofing DeFi Complexity
With all the celebration and fervor of DeFi in the eyes of crypto holders, the ever-present “elephant in the room” is that usability is growing faster than the network - in layman’s terms there’s too many cars on the road - leading to issues of scalability and speed. The Ethereum blockchain - arguably the leading DeFi chain - is facing issues of congestion. This leads to either slowing confirmation times or forcing transactions faster by paying more in gas fees. Needless to say, DeFi will need some future-proofing in this way. There have been hundreds of discussions about the problems regarding scalability in something that the DeFi space really needed six months ago or more. Ethereum has several considerations for its 2.0 implementation, including zero-knowledge proofs (ZKPs) as its foremost thought, but the DeFi space shouldn’t rely just on Ethereum only if it wants to truly scale.
With all this being said, let’s talk about Oasis Network. They have a robust project to solve these issues of scalability and data exchange for financial services.
The Oasis Network Blockchain
Accurately advertised as a blockchain platform, the Oasis Network is a Layer 1 solution for open finance. Built with both privacy and scalability in mind, the Oasis blockchain can handle 1,000 transactions per second compared to Ethereum at 13 tps as it stands without ETH 2.0 implementation. Oasis can also take advantage of parallel execution transactions to make it even faster. This will allow by default to have lower transaction fees so everyone wins. This enables a complete, functional, and future proof blockchain on the foundational layer out of the box. With this ability, DeFi doesn’t need to rely just on Ethereum. Imagine a larger DeFi ecosystem composed of multiple Layer 1 chains that can handle throughput. This is a solution that needs to come sooner or later and Oasis Network has the keys ready to go. The project also takes advantage of Intel Software Guard Extensions, also known as SGX, which is a blockchain integration system that incorporates privacy features which they call attestation. This has similar characteristics to ZKPs but with more robustness including arbitrary and multiparty computations.
Oasis Network doesn’t stop at scalability and privacy though. What’s unique about the Oasis project and an eye-catching feature for DeFi is the ability to transfer unique data and data types called Tokenized Data.
The ROSE Garden
The ROSE Garden is Oasis’ novel mechanism to reward the native token to the community in exchange for making the network safer. The ROSE Garden has two components which are ROSE farm and ROSE cultivate. ROSE Farm allows participants to receive ROSE in exchange for temporarily adding USDC or USDT to the ROSE Farm pool, which increases liquidity and farm incentives. ROSE Cultivate on the other hand is where participants receive more ROSE in exchange for staking the farmed ROSE. All participants can access ROSE farm which gives access to cultivate, and is a great mechanism that helps both liquidity and participants.
Oasis has partnered with Coinlist to make this staking and reward mechanism as strong as possible and I really think it gives a good balance of ROI. Users can add liquidity in return for ROSE and then receive even more ROSE for staking their ROSE further down the line with the cultivate method. I think offering mechanisms such as this is great for both the ecosystem and the participants. Participation Window starts: October 29th, 00:00 UTC so it is already live, you can check out more details here.
Tokenizing Data
For the most part, crypto projects have been light on certain data types. DeFi and other crypto tend to keep features front and center on money exchange, staking, yield farming, and governance issues instead of traditionally archaic things like messaging and other data exchange. The Oasis Network has built this in mind too, since a future proof project will eventually require this. Their solution is something they simply call Tokenized Data. This feature can be used to hold larger amounts of data on the Layer 1 chain that is encrypted, which can be used for things like dApps, privacy integrations, and API connections. This allows users to integrate certain data without the owner of that data to give over its source code or ownership. Data providers on the network can lend their data in favor of having that data staked - which gives users rewards for participation in the network, sort of like a “data liquidity” pool.
Blockchain Details
The Oasis Network is a Layer 1, proof of stake blockchain with two sub layers - one called a Consensus Layer and another called a ParaTime Layer. The Consensus Layer gives the high transaction output and scalability which is run by a set of nodes. The ParaTime Layer are parallel environments that compute on a shared level which helps with efficiency and privacy. These sub-layers are crucially separate to enable Oasis Network to function as intended.
The high performance of the network is mostly attributed to the architecture above; the parallel separation along with the Intel SGX enables the layer. This enables the workload to be distributed without losing the integrity of the chain.
Conclusion
DeFi will need major solutions in order to scale beyond the next couple of years and Oasis Network has solutions ready in mind. Their project is a Layer 1 solution that can handle next-level scalability which can help share DeFi uses from Ethereum and other chains like Polkadot. The chain can handle up to 10,000 tps out of the box with ability to add to that scale. In addition, Oasis uses two sub-layers that can act independently in order to run faster and more securely. Oasis Network is looking ahead at the future of DeFi and getting tomorrow’s solutions up and running today.
If you enjoyed this newsletter please make sure to sign up with your email address, it's free and I write newsletter content a few times a week! I enjoy writing these articles! If you would like to find out more about Oasis Network, take a Deep Dive into who they are. Also, check out their Twitter https://twitter.com/OasisProtocol. Thanks again.