Oracle Machine Industry Analysis: Finding the Second rise Curve

The Oracle Machine is a key infrastructure in blockchain systems that connects off-chain data and smart contracts. Fundamentally, the core competitiveness of Oracle Machine projects is mainly reflected in four aspects: the comprehensiveness and reliability of data acquisition, the acquisition of exclusive data and value capture, the security and decentralization of verification mechanisms, and the transmission efficiency and network robustness.

It is expected that by 2030, the overall market size of the Oracle Machine industry will be between $13.8 billion and $23.1 billion. Chainlink, as the industry leader, has a wealth of data sources and extensive project collaborations; Pyth Network has advantages in transmission speed and financial data acquisition; Redstone is currently the only Oracle Machine that supports both push and pull pricing methods.

In the future, the Oracle Machine will no longer overly rely on providing price feeding services for DeFi projects. Real-world assets (RWA) are expected to become a strong second rise curve for the Oracle Machine industry. Emerging businesses such as DePIN, AI, and DeSci also have the opportunity to integrate with the data services of the Oracle Machine, becoming new driving forces for industry revenue growth.

The Development History of Oracle Machine

2014 and earlier: Oracle Machine demand began to emerge, and the decentralized prediction market Augur was launched.

2015-2016: Ethereum co-founder Vitalik Buterin proposed the concept of Oracle Machine, and Oraclize launched the first decentralized Oracle Machine service.

2017-2018: Chainlink was established, proposing the concept of a decentralized Oracle Machine network ( DON ).

2019-2021: The DeFi explosion led to a surge in demand for Oracle Machines, with projects like Band Protocol and Tellor being launched one after another.

2022-2023: Oracle Machine services expand to multi-chain and multi-scenario. Chainlink launches cross-chain interoperability protocol (CCIP), Pyth Network goes live on mainnet.

2024-2025: Oracle Machine services expand from DeFi to areas such as gaming, NFTs, and insurance. The demand for IoT Oracle Machines increases with DePIN applications, and AI begins to explore integration with Oracle Machines.

Oracle Machine track market size

By the end of 2024, the total market value of the Oracle Machine project will be $10.55 billion, accounting for 11.8% of the total DeFi market value. Based on Grand View Research's forecast for the DeFi market, this article proposes two hypothetical scenarios to estimate the market space for the Oracle Machine:

• Optimistic scenario: The Oracle Machine market size maintains 10% of the DeFi market size, reaching $23.1 billion by 2030.

• Neutral Scenario: The Oracle Machine market size remains at 6-8% of the DeFi market size, reaching 13.8-18.4 billion USD by 2030.

Main Projects in the Oracle Machine Track

Chainlink

Chainlink is the absolute leader in the Oracle Machine industry, providing services such as price feeds, automation, verifiable random functions, and cross-chain operations. In 2024, price feed service revenue will account for 95% of the project's total revenue.

Chainlink's main services include:

1. Feed Price Service: Obtain data from multiple independent nodes through various high-quality data aggregators, perform local aggregation and cleaning, and then submit it on-chain.

2. Automated Services: Includes Keeper trading automation services and Automation 2.0, which can automatically execute operations triggered by specific events.

3. Cross-chain Protocol: CCIP provides smart contract developers with a general infrastructure that has computational capabilities, allowing data and smart contract instructions to be transmitted across various blockchain networks.

4. Verifiable Random Function: Generate one or more random numbers for each random number request and attach a cryptographic proof.

5. Enterprise Privacy Data Services: Provide opportunities for enterprises to sell data and API services to the blockchain environment, enabling the on-chain of privacy data, off-chain computation of contract logic, and on-chain transactions of privacy data, among other functions.

Pyth Network

Pyth Network is an Oracle Machine project strongly supported by the Solana ecosystem, characterized by low latency and financial data acquisition. Its main price feeding service occurs on the Solana chain, making it difficult to expand its market share on Ethereum.

The main services of Pyth Network include:

1. Price feeding service: Provides corresponding SDKs for different types of public chains such as EVM chains, Solana, Sui, etc.

2. Random Number Generation Service: Pyth Entropy is the random number generation product it launched.

3. Fast Relay Service: Express Relay aims to eliminate on-chain MEV( maximum extractable value), allowing users to prioritize transaction processing through a bidding mechanism.

Redstone

Redstone is a cross-chain Oracle Machine project that has completed integration with over 70 public chains. Its features include support for both push and pull models, as well as the exploration of the AI Oracle Machine architecture CLARA.

Redstone's main services include:

1. Push Model: Push data to the chain through off-chain relays, achieving customization and automation of pricing feed services.

2. Pulling the model: On-chain smart contracts actively call the Oracle Machine interface when data is needed, improving gas efficiency.

3. AI Oracle Machine Architecture CLARA: A blockchain communication layer framework designed to enable seamless communication between agents.

RWA opens the Oracle Machine track's second rise curve

Real-world assets ( RWA ) have become a new battlefield for the extension of Oracle Machine capabilities, with the potential to unlock a multi-billion dollar incremental market with reliable off-chain data keys.

1. Demand for RWA pricing services rises: McKinsey predicts that by 2030, tokenized real-world assets will reach $20 trillion. The Oracle Machine, as an important infrastructure for RWA, can achieve significant revenue growth.

2. Oracle Machines that have provided services for RWA projects:

   • Chainlink supports the pricing of tokenized RWAs in the Backed Finance.
   • Redstone introduces Eurozone government bond ETF data sources to the crypto world
   • Pyth Network provides price feed services for the RWA platform Ondo Finance.
   • The DORA 2.0 of the Supra public chain provides RWA pricing services.
   • Chronicle Labs launched the RWA Oracle Machine "The Verified Asset Oracle"

3. High-threshold off-chain data modeling for non-financial assets: Oracle Machine needs to provide more complex services for non-financial assets such as real estate, charging piles, and photovoltaic components, including access to data sources that reflect asset status and influencing factors, and integrating mathematical models to convert this information into reliable on-chain prices or risk assessments.

Multi-type Data Dedicated Oracle Machine, Industry rise Curve from 2 to N

The service capability of the Oracle Machine is transitioning from "general transmission" to "vertical processing", building dedicated collection, verification, and uploading systems for specific types of data.

1. IoT Data Oracle Machine: Supports DePIN capacity expansion, such as Echolink has completed the connection of approximately 8 million hardware devices.

2. Code Oracle Machine: It may be used for DEX code vulnerability checks, such as Uniswap's vulnerability bounty program.

3. Biological Macromolecule Oracle Machine: Provides infrastructure for Crypto × Biotech, potentially utilizing medical journals or databases as data nodes to support the token value of macromolecules.

Conclusion

The Oracle Machine is gradually evolving from a "universal data layer" that standardizes financial protocols to a "multimodal infrastructure" that supports vertical scenarios. As the demand for more modal data on-chain increases and the performance of smart contracts improves, RWA is expected to become the main second rise curve in the Oracle Machine track. At the same time, vertical specialized Oracle Machine startup projects will continue to emerge, bringing new growth momentum to the Oracle Machine industry.