The most cheap and efficient Oracle. What is Chronicle Protocol?

Andrii Stepanov
Marketing Manager
6 Minutes Read

Chronicle Protocol’s Innovative Oracle Solutions

The Chronicle Protocol, developed by Chronicle Labs, is an Oracle service born out of the MakerDAO ecosystem, focusing on providing transparent, scalable, and cost-effective Oracle solutions to bridge verifiable data securely onto and between blockchains. The protocol’s Scribe architecture employs an Optimistic Schnorr hybrid design, which aims to ensure data reliability while significantly saving gas costs, especially on Ethereum Layer 1.

 

 

Chronicle Protocol is a notable Oracle solution in the decentralized finance (DeFi) sector, specifically serving MakerDAO by safeguarding over $5 billion and at times over $20 billion, aiming to enhance the transparency and security in Oracle networks.

Here’s the detailed information in response to your queries:

1.Origin and Background:

  • Chronicle Protocol was co-developed by Niklas Kunkel, who initially co-developed the first Oracle on Ethereum in 2017 to facilitate the creation of SAI, a predecessor to DAI. Over time, Chronicle has evolved to guard assets within MakerDAO, helping it become a leading DeFi protocol and the largest on-chain lender

2. Functionality

  • Chronicle aims to address challenges faced by Oracle providers and users while granting universal access to its decentralized protocol for all developers. It emphasizes the verifiability of data to eliminate the need for trust and showcases an on-chain dashboard called The Chronicle for tracking data origin. It also plans to launch on Polygon zkEVM initially, extending its services to Spark Protocol and other blockchains subsequently

3.Improving Transparency in Oracle Networks:

  • Chronicle emphasizes verifiable data to ensure the integrity of DeFi. The protocol has an on-chain dashboard allowing anyone to track the origin of every data element, thereby creating a high-integrity, censorship-resistant layer for data transmission. This feature enhances the overall decentralization and security of the protocol, setting a high standard for on-chain data transparency

4.Key Technical Terms and Comparison to Chainlink:

  • Chronicle uses the term ‘Oracle’ to denote the smart contract, such as a cryptocurrency pair like BTC/USD, representing one Oracle, with each pair constituting a separate Oracle.
  • Chainlink uses the term to describe their data providers – what the Chronicle refers to as Validators.
  • Chronicle reduces Oracle gas fees by over 80% through a novel cryptographic primitive called Scribe. This is a notable improvement over Chainlink, which has higher gas fees for its Oracles.
  • No moral hazard regarding security ↔ update cost.
    Chainlink’s update cost is linear dependent on the number of nodes signing the data. The more secure, the more they pay for an update. Utilizing Scribe, Chronicle has broken this linear dependency.

5.Scribe System:

  • Scribe is a next-generation Oracle cryptographic primitive. It significantly reduces Oracle gas fees by utilizing Schnorr signature aggregation, solving a fundamental Oracle problem by decoupling the number of validators or signers from the cost to verify an Oracle update. This innovation leads to a substantial reduction in operational costs, paving the way for scalable Oracles that provide real-time and precise data without security trade-offs.

6. Benefits of Schnorr signatures over ECDSA signatures:

  • Size Efficiency: Schnorr signatures are a fixed 64 bytes, unlike the longer format of ECDSA signatures1.
  • Linearity: Schnorr signatures possess a linearity property not found in ECDSA, making them more efficient and feature-rich
  • High Efficiency and Privacy: Schnorr signatures offer high efficiency, and increased privacy while preserving all the features and security assumptions of ECDSA, including smaller signature sizes, faster verification times, and improved resistance against certain types of attacks
  • Signature Aggregation: Schnorr signatures allow for the merging of multiple messages or transactions into a single signature, simplifying transaction representation and potentially saving space on the blockchain

7. Functioning and Advantages of Chronicle’s Optimistic Scribe Architecture:

  • The Optimistic Scribe architecture uses the Schnorr cryptographic technology to compress data from multiple feeds into a single signature, thereby enhancing the reliability of the resultant data. However, verifying Schnorr signatures is resource-intensive, leading to high gas costs and slow execution, especially on Ethereum L1.To mitigate this, Chronicle Oracles are optimistic on Ethereum L1; proposed prices are initially assumed to be accurate and can be disputed by third parties. If no successful disputes occur within a certain period, the prices are considered finalized. This design bypasses on-chain verification of Schnorr signatures, resulting in significant gas savings of 52% and 66% for L1 and L2, respectively.Benchmarks:
  • L1 using ScribeOptimistic: Ethereum Transaction Example
  • zkevm L2 using Scribe: Polygon zkEVM Transaction Example

8.Benefits of Scribe Architecture for Users and Businesses:

  • The Optimistic Scribe architecture, by significantly reducing gas fees and improving data reliability through signature aggregation, presents a cost-effective and reliable solution for users and businesses interfacing with blockchain applications. Besides that, Chronicle has unique features that can enhance the security level of Oracles.
  • Totally verifiable.
    • Chronicle is the only Oracle protocol to offer complete cryptographic verifiability – API3. From the moment any data point is sourced up until it is pushed on-chain – everything is cryptographically signed and verifiable. What you can see on the Chronicle dashboard.Businesses or Dapps that use a verifiable Oracle enables a new level of accountability for protocols and Dapps, allowing users to self-verify why the Oracle reported a value that led to the Dapp liquidating their position, etc.Companies and Dapps that are devoted to these core values of verifiability and transparency can reinforce this identity to attract new values-driven users and retain current, ones by using cryptographically & legibly verifiable infra such as Chronicle.

9.Economical Benefit:

So in this context, the Chronicle offers a huge amount of economic benefit due to the lower operational cost via gas efficiencies. Say there is a fixed subsidy of $500k paid to Chainlink and Chronicle to cover Oracle usage on Chain A. Chronicle Oracles can update more often and run for longer on this fixed subsidy than Chainlink’s, as the cost to run for the Chronicle is far lower. This gives blockchains a longer runway to bootstrap their ecosystem.

Outside this model, the cost-efficiency of the Chronicle Oracle infrastructure also allows the Chronicle to pass these savings on to the end user, representing a far lower subscription fee than other SaaS-type Oracle models.

Finally, Scribe has been designed as a single implementation on EVM chains. Chronicle can deploy Oracle infra quickly and easily, allowing Chronicle to charge lower integration fees for EVM chains vs Chainlink.

Why Chronicle?

Chronicle’s approach aligns with the crypto industry’s core values of transparency, scalability, and cost-effectiveness. Chronicle is the first Oracle protocol to offer cost-effective Oracles and verifiable data. The protocol aims to bridge verifiable data securely onto and between blockchains, fostering trust and compliance within the DeFi sector, which resonates with the broader objectives of the crypto industry.

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