In the first stage (before more than 1,000,000 users are connected to the Protocol), Oracle is closed and the result of its checks can only be made available externally by ZKP-mechanics. But what exactly does Oracle do?

If the Protocol addresses the unification issue based on the principle "centralization is a last resort, unification is useful", Oracle focuses on the decentralized system’s gradual creation of evaluation and analysis of second-order NFT entities, without resorting to a single, trusted, person/service.

To this end, Envelop applies a "simple to complex" transition system. That means, the first stage is a development of scoring, the evaluation of assets on the basis of quantitative and temporal parameters. And the second stage, is addition of voting by various actors of Web 3.0 systems (smart contracts, people, AI, owners of various DDS super-nodes, etc.), i.e. a classic anti-fraud is born. Finally, the last one is a stage of implementing transactional reputation of assets from the moment of their genesis to the end of their existence (burning, sending to "eternal" addresses, etc.), and here already AI-analysis-synthesis methodology works, which are impossible without big data (why is there a step-by-step transition from scoring to classic anti-fraud and only from it to AI-aspect) and work through ZKP-mechanics initially.

Let's briefly describe the principles of scoring system and anti-fraud system, created on its basis, because on the first stage (before full release and getting of client base of more than 1 000 000 people) all the results of system are transferred to Protocol and external sources exclusively through ZKP-mechanics, as it is mentioned above. However, such data can be supplied by any other Oracle.

First, Oracle uses possible open-sources:

  1. DDN registers;

  2. Open data from other oracles;

  3. Statistical reports on markets;

  4. Other data.

So, what is the functionality of Oracle? First, the Oracle is based on a primitive model of transactional reputation, i.e. quantitative criteria (number of assets within NFT, number of NFT shards; initial price of assets, etc.). Second, the Oracle is based on a temporal criterion (when NFT was created, when the invested asset was "created", what position it holds in general ratings, where it trades, what is liquidity, what is participation in DEX-, etc., etc.). Finally, here is subjective criteria meaning analysis of Twitter & Reddit (hereafter positive/negative criteria), etc.; analysis of social activity in official groups (if possible) or the most popular one, TOP-10; analysis of search results (also plus/minus scores - next step)

So, how will the Oracle help the Protocol to develop? There are as many as 10 areas of mutual primary interaction (so of course this list is open/not complete). They are listed below.

  1. Oracle makes it impossible to use NFT for "dirty" activities outside local communities. i.e. the Protocol can be used locally by drug dealers and criminals of other kinds, just like any other tool. But once they go outside, their reputation is greatly reduced (automatically, not by us). So, everything in this world can have negative consumption capabilities - from a kitchen knife (the most common tool of domestic crime) to TV. However, it all comes down to whether the tool was originally created for positive or negative activity at the end.

  2. Oracle allows for an objective assessment of the market, and this is how the Index was born. The First Decentralized NFT Index which evaluates not only the top projects, but also their transactional reputations in a single, quantified format. Being quantitative, the Index consists of the ratio of a different indicators’ number, i.e. the one takes into account the entities’ quality: NFT, initial assets, relationships of transaction participants, etc.

  3. Through whatever marketplace the Protocol users would enter, Oracle also allows obtaining objective information about the valuation of assets, without the direct involvement of the valuation entity (government agencies, banks, brokers, marketplaces themselves, etc.), purely on the basis of primitive models. It is this approach that allows scaling the level of Oracle virtually indefinitely: it is sufficient to comply with the requirements to unify the data provided.

  4. Oracle has the potential for secondary analytics, for example, storing rarity NFTs through what happens most often? Or how to find DDS anomalies and turn them into NFTs? That is, Oracle becomes a big data provider in its own right.

  5. Oracle allows exactly searching for anomalies of different order, and, thus, the one serves formally as a protocol, but in a different sense: as a tool for unification of markets, industries, etc. Why is this necessary? The simplest example is for there to be a single liquidity market where all participants of the process earn, not only those who use the most advanced practices of intercepting this liquidity.

  6. Oracle, passing several stages (scoring - classic anti-fraud - AI-anti-fraud), can become in the end one of the tools not only for full analytics of NFT-market and related processes (point 4 above), but also a full DAO where dependence on human-resource will be minimal, and, thus, it will become a semi-autonomous tool for integration of the Protocol. Example: SAO connects to DAO, and starts to test the Protocol in one of the cases. (Here we develop an algorithm of such case’s implementation and continuous updating/addition in standalone mode.) Now there is a problem of centralized oracles, and it obviously has to be solved sooner or later, because the Project can offer today a conceptual answer to this burning question.

  7. Oracle gives everyone the opportunity to become an analyst. And that is a separate and large stratum of development, if the Protocol suddenly reaches the ceiling of evolution. Or, more precisely, in those cases, whether you are a trader and a human or just a simple script, responsible for the simple IoT system sensor’s work, you have access to the Protocol through Oracle, both inbound (data filling) and outbound (the actual analysis of data located in the Project's repository) operations.

  8. One of the most important implications of creating Oracle is a full-fledged ecosystem for DeFi+DEX, DeFi+NFT, NFT+offline, etc. bundles. After all, every entity that is tokenized has to be evaluated somehow. When there is an evaluation format, it's easier than if you have to come up with new and new criteria over and over again.

  9. Since Oracle is built on a transactional reputation model, it can be used by services for a wide variety of activities:

    1. Conducting airdrop;

    2. Authorization on DEX without KYC (by analyzing assets);

    3. Ability to bequeath funds anonymously, etc.

  10. For the digital (crypto) offshore, Oracle means analogue mechanisms:

    1. Anti-fraud;

    2. Anti-phishing services;

    3. Performance analytics systems;

    4. Creation of a unified database of NFT standards in different valuation profiles, etc.

But most importantly, the Oracle allows you to move on to another important stage - the Index. And here's why.

Last updated