Binance launches its own Oracle service

Binance launches its own Oracle service — this could spell trouble for Chainlink.

Binance launches its own Oracle service — this could spell trouble for Chainlink.

With the launch of its own Oracle service, Binance has expanded its influence in the DeFi space even further. The data processed within the Binance ecosystem now runs through its internal Oracle system as well. The world's largest crypto broker is completing the vision of the BNB Chain as a total solution, and the broker also wants to add more partners to the network, increasing pressure on the Oracle provider Chainlink.

Connection between off- and on-chain

Oracles play a key role in processing data in blockchain networks. They receive data, relay it to smart contracts, and thereby secure applications that rely on incoming information. For example, travel insurance on a smart-contract basis, and current exchange prices, are supplied by Oracles.

Oracles also enable data exchange in the other direction: from blockchains to the "real world". As a translator between data issuers and decentralized networks, they serve as a bridge between the off-chain and on-chain worlds.

What has largely been covered so far by Chainlink as the largest Oracle network. With its own Oracle service, Binance could gradually break this monopoly.

Binance on track for expansion

According to Binance, the Oracle space offers "huge possibilities." Through smart contract traffic, they would serve "as the backbone of Web3." Several partners within the BNB Chain ecosystem are already supported with the Oracle solution.

The broker's clearly stated ambition: the Oracle service is "a next step in Binance's journey to become the main supplier of all traffic." Not only in DeFi, but also for supply chains, insurance and healthcare sectors, and blockchain-based decentralized identities, Oracles are playing an increasingly important role. With plans to extend to other blockchains, Binance may make Chainlink's Oracle network less central.