Decentralized applications use smart contracts in their work, many of which need to be able to receive information from the outside world in order to comply with the terms of the contract. For example, to calculate the exact ratio of the price of one cryptocurrency to another during an exchange, or information about the completion of a payment, or data from various sensors, chips, scanners in real time, or data from digital sources — servers, databases, cloud storages. But blockchains and smart contracts cannot access data outside of the network they are deployed on. They need intermediaries between the contract and the source of information.

Oracles are intermediaries between external and internal sources. Blockchain oracles are algorithms that run on the nodes of a particular blockchain.

The Cosmos ecosystem also needed its own oracle to obtain safe and reliable asset price data, as accurate price data is critical to a leverage protocol that is sensitive to even the smallest price movements. Existing oracles do not have data on small assets that are part of the Cosmos ecosystem, such as OSMO, JUNO, KUJI and UMEE. They are focused on assets with the largest market capitalization, the well-known BTC and ETH.

With these needs in mind, the Umee developers decided to use Terra’s oracle design as a base to create their own oracle.

Umee is a decentralized platform for cross-chain operations between networks. With its help, users borrow and lend crypto assets and transfer capital between blockchains. Umee is technically built on top of the Cosmos SDK. and an Ethereum virtual machine to link other DeFi applications. Umee uses Inter-Blockchain Communication (IBC) of the Cosmos protocol to develop internetworking. Umee operates as a framework for users and developers that leverages liquidity and cross-network.

IBC is a protocol for transferring data between different blockchains, which does not impose strict restrictions on the type and format of data that is transferred between blockchains.

The result of the team’s work was a decentralized network of oracles — Ojo. Ojo is a proprietary network to provide the highest quality, reliable and affordable data feeds. Ojo is a decentralized oracle network that will receive price data from various sources and use advanced security mechanisms.

Decentralization of blockchain oracles is a necessity today. The centralized type of oracles was the first to appear, but it showed many problems. A centralized oracle has one operator, which is the only source of information. The risks are obvious. The effectiveness of the contract depends entirely on one source. Any negative interference has the worst consequences for the contract. Now the crypto industry welcomes the new standards of decentralized blockchain oracles — these are systems that combine many oracles. A group of nodes is selected from them, each oracle of which performs its own “section” of the request.

Ojo is very democratic. Ojo data streams can be used by anyone working with IBC-enabled blockchains without permission. Now it can be, for example, the Osmosis and Umee blockchains. Connecting to Ojo’s data feeds is pretty easy.

At first, Ojo provides an opportunity for everyone to use the data for free. This is done in order to support the development of the Cosmos ecosystem. Ojo data streams will create healthy competition in the oracle chain and improve the infrastructure. Given that Ojo has the ability to provide the most reliable data feeds on all IBC-enabled blockchains, this network will quickly find its adherents and become deeply rooted in Cosmos. After that, Ojo will start monetizing its services.

Ojo validators will receive data from various internal and external sources, so the risk of any source giving incorrect information will be minimized. Ojo will have a robust filtering engine that will filter out erroneous data in real time. Data errors will be revealed by comparison with data from other sources.

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