As a decentralized financial tool, the Indigo Protocol relies on data delivered through Oracle services to ensure consistent and accurate iAsset pricing. This post outlines Indigo’s Oracle needs, the solution that Indigo has adopted for launch, and the Indigo Labs team’s efforts to develop additional Cardano-native Oracle options.
Indigo’s Oracle Needs
The Indigo Protocol has been designed from the start to be Oracle-agnostic, but at the same time, Indigo has specific datum requirements. Being Oracle-agnostic means that Indigo has the option to use any available Cardano-native Oracle — providing that it conforms to Indigo’s datum feed standards for the iAssets that may be whitelisted today and in the future. While the decentralized Oracle solution landscape on Cardano is continuing to rapidly develop, it does not yet include a decentralized Oracle solution that meets the datum standards of the Indigo Protocol.
Indigo’s Current Oracle Solution
Since there are at present no Cardano-native Oracles that meet Indigo’s datum standards, for now, Indigo has been launched using its own fault-tolerant and geo-diverse Oracle solution powered by Chainlink. Chainlink is the most well-known, widely-used, and trusted Oracle services provider in existence today, and is an integration partner of the Indigo Protocol. Through Chainlink, the Indigo Protocol can access a wide range of Oracle price-feeds.
The Chainlink Oracle solution works by pulling data from Chainlink price feeds established on the Ethereum blockchain. Specifically, when the value or price of any whitelisted iAsset fluctuates, price data is collected from long-established Chainlink nodes on the Ethereum blockchain automatically and saved on the Cardano blockchain by an updating datum as part of an Oracle NFT dedicated to that iAsset. The datum of this iAsset-specific NFT which Indigo references is updated hourly, in line with the actual update cadence of Chainlink’s feed updates. Every time a new price is recorded on Ethereum, the Oracle NFT is updated to contain the most recent and accurate value for the iAssets. This value is then fed to Indigo’s on-chain and audited Oracle validator script in an automated and secure manner.
This initial Oracle solution is not the Indigo Protocol’s final Oracle solution. Indigo Labs continues to work closely with Cardano-native Oracle providers such as Charli3 & Orcfax, as well as with Chainlink, to help develop more robust and decentralized Oracle solutions that conform to Indigo’s datum standards. We anticipate that these Oracle providers will deliver secure and reliable decentralized Oracles custom-created for the Cardano blockchain in the near future, which will help further expand the iAsset options available to Indigo users.
In addition to working with these Oracle providers, Indigo Labs has collaborated with Charli3 to introduce an Oracle CIP. As a consumer of Oracle data, Indigo aims to be able to support multiple data feeds from different providers for maximum decentralization and redundancy. If each Oracle provider is using a different datum structure, these particular data structures have to be supported by Indigo’s smart contracts. With a standard in place, Indigo can support this standard and with multiple data providers. Indigo Labs has worked closely with Charli3 to introduce the first draft to the Cardano Foundation CIP repository, which you can find here.