Cosmos-based Layer-1 blockchain project called Umee (UMEE) recently announced the launch of the first native oracle for IBC tokens called Orion. The project is being backed by Umee’s own decentralized validator set, with pricing data coming from centralized and decentralized exchanges alike.
We are launching #Orion for @cosmos🪐 #Orion is the 1st native oracle for IBC tokens, backed by #Umee’s decentralized validator set with pricing data from CEXs & DEXs.
Read on from @Macauley64 @Blockworks_👇https://t.co/LlgJgfsOVQ
— Umee 🌊 (@Umee_CrossChain) July 7, 2022
Cosmos gets its own oracle
Umee is a cosmos-based lending and borrowing platform, and it is closing in on launching its first price oracle service within the Cosmos ecosystem. Naturally, price oracles are very useful for DeFi projects, especially when it comes to lending and borrowing platforms where having the accurate price of various coins is of great importance, especially for things such as interest calculations.
The oracle is called Orion, and it will not only be useful for Umee, but any dApp, DeFi protocol, and other blockchain product that relies on smart contracts. The reason for this is that oracle services act as the way for blockchains and their products to retrieve accurate information from outside the chain. This real-world data cannot be brought to the blockchain in any other way, and especially not in real-time and with the required accuracy.
Brent Xu, the CEO of Umee, noted that Cosmos has a lot of DeFi, but not a single oracle that works for IBC (inter-blockchain communication) protocol-based tokens. Of course, the crypto industry has other oracle services, with Ethereum-based Chainlink being the first and the largest at this time. There is also Band Protocol which is itself based on Cosmos, like Orion. However, neither of these projects implemented a price oracle for Cosmos native assets, as they are mostly focusing on cross-chain use cases.
Who can use Orion?
So far, projects that require accurate price data have been forced to seek out workarounds, although they are neither reliable nor as accurate as oracles, which can reflect negatively on the projects themselves. Oracles are by far the most reliable way of obtaining price data, as they draw information from multiple data sources — in this case, about half a dozen trustworthy exchanges such as Binance, Coinbase, and DEXes. However, this is also only true for the initial period, and the project will likely obtain additional data sources in due time.
Umee’s own upcoming borrowing and lending application will be the Orion oracle’s first customer, although others will also be able to implement it, if they choose to do so. Xu further noted that the special thing about Orion is that every time when someone takes price information, it is the equivalent of an IBC transaction taking place on-chain. However, the thing that project can do is it can allow these transactions to carry information from the Umee blockchain to any other Cosmos blockchain out there, in the form of price data.
The oracle is scheduled to go live next month, and it will come alongside a major new upgrade to the Umee protocol. So far, the project has been testing its service on its test network, and quite rigorously, at that.
To learn more visit our Investing in Umee guide.
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