# Flare: Integrating Oracle Directly into Blockchain Core Protocol for Unmatched Data Integrity

Flare is a next-generation blockchain that directly integrates an oracle into its core protocol, guaranteeing the reliability and integrity of data. Through three key protocols—FTSO (Decentralized Price Feeds), Data Connectors (linking Web2 and Web3), and FAssets (leveraging non-smart contract assets)—Flare constructs a data-centric blockchain ecosystem.

Initially designed as a data infrastructure, Flare aims to evolve into a liquidity hub connecting various ecosystems, including Bitcoin, Ripple, and Dogecoin, through the launch of FAssets. This strategic move seeks to integrate non-smart contract assets into the decentralized finance (DeFi) ecosystem.

# The Achilles’ Heel of Blockchain Technology: Data

Blockchain is built on the principle of “Code Is Law,” establishing a trustless system that operates autonomously, offering security and trust unprecedented in traditional systems. However, this assurance hinges on the premise of “reliable data.”

Second-generation blockchains like Ethereum and Solana provide various functionalities through smart contracts. Yet, these contracts are entirely dependent on the accuracy and reliability of the input data. Even the most impeccably designed smart contract is vulnerable to manipulation or errors in the input data, risking the entire system.

To address this issue, the blockchain industry has introduced decentralized data providers known as oracles. However, these oracles operate outside the blockchain, failing to offer the same level of security and integrity. Additionally, their external nature introduces a single point of failure, and some oracles are controlled by a few nodes, exposing them to vulnerabilities.

Data is both an indispensable element and a potential Achilles’ heel for blockchain. Overcoming these limitations requires a novel approach that directly verifies and manages external data integrity within the blockchain itself. Flare is a project that presents a solution to this challenge.

# Flare: All for Data, One for Data

Flare specializes in providing a blockchain infrastructure tailored for data (“All for Data”). Most blockchains today rely on external oracles for data, ensuring blockchain security but not the reliability of the data provided by oracles. Flare aims to resolve this by integrating the oracle directly into the blockchain core protocol. This isn’t just a technical integration; it applies the blockchain’s security measures to the oracle as well. In an extreme scenario, hacking the oracle would require hacking the entire blockchain network, inherently guaranteeing data reliability and integrity. By unifying the blockchain and the oracle into one system (“One for Data”), Flare mitigates the security risks associated with external oracles.

Flare’s built-in oracles can be utilized for free, enabling developers to create Web3 services based on abundant data without needing external oracles.

# Key Protocols of Flare

Flare offers three main protocols based on its integrated oracle:

1) **FTSO (Flare Time Series Oracle)**: Provides decentralized price feeds.
2) **Flare Data Connector (FDC)**: Allows verified utilization of external chain and Web2 data within Flare.
3) **FAssets**: Facilitates the DeFi use of non-smart contract assets like Bitcoin, Ripple, and Dogecoin.

## FTSO: Decentralized Price Feeds

Flare’s FTSO offers decentralized, time series price data, crucial for various Web3 services, including DeFi. Most services still rely on centralized data providers, risking system reliability and stability in the event of data manipulation or errors. This issue was starkly highlighted in March 2023 when a technical glitch caused Berkshire Hathaway’s stock price to plummet by 99%, underscoring the vulnerability of centralized data systems.

To solve this, Flare operates a decentralized price feed system involving over 100 independent validators. These validators gather time series price data from various sources and submit it, with the optimal value being derived through the blockchain’s consensus mechanism. Illogical or manipulated data submissions are excluded, ensuring reliable and accurate data.

Moreover, each feed in FTSO involves over 100 validators, minimizing data deviations between feeds and significantly enhancing system reliability. Flare’s FTSO data aligns with major exchange prices, verified for accuracy and reliability.

In May 2024, FTSO Version 2 (v2) was launched, dramatically expanding data processing speed and scope. Formerly limited to cryptocurrencies, the price feeds now cover stocks, commodities, and various Web2 data, with update intervals shortened from 180 to 90 seconds and feed numbers expanded from 18 to over 50, with an infrastructure capable of supporting up to 1,000 feeds.

## Flare Data Connector: Bridging All Data

The Flare Data Connector enhances scalability and utility by linking external chain and off-chain data to the Flare ecosystem. Blockchains are inherently isolated, imposing constraints on real-world data integration.

For example, a Web3-based insurance service’s implementation can be limited or impossible without reliable data on weather or flight delays. Similarly, prediction markets like Polymarket face severe restrictions and risks if they cannot reliably fetch data, such as sports results. Additionally, interoperability with other chains is essential for the blockchain’s broader ecosystem development.

Designed to overcome these limitations, the Flare Data Connector is a protocol that connects verified data to the blockchain. A demo of Flare’s “2024 Paris Olympic Prediction Market” effectively illustrates this protocol in action. The service fetches reliable Olympic results through the data connector to reward users for accurate predictions.

When an external event is requested, independent attestation providers collect and verify data from multiple sources, such as the Olympic official API, ensuring the data’s reliability through a consensus mechanism.

The Flare Data Connector’s applications are vast, allowing the integration of any verifiable data available on the internet via an API. This could include online game item trade records or social media likes, significantly boosting scalability. Moreover, it supports verification of external blockchain data, such as Bitcoin or Ripple transactions, fostering interoperability. This enables new applications like trading NFTs issued on the Flare network with Dogecoin or Ripple.

## FAssets: Creating a Liquidity Hub Connecting Diverse Ecosystems
FAssets is a Flare protocol designed to enable non-smart contract assets to be utilized within the DeFi ecosystem. Built on FTSO and Data Connector technologies, FAssets open new possibilities for non-smart contract assets, such as Bitcoin, Ripple, and Dogecoin.

This technology is crucial for overcoming the limitations of first-generation blockchains like Bitcoin, Ripple, and Dogecoin. While Ethereum has soared through DeFi, first-generation blockchains lack smart contracts, confining them to simple transactions. FAssets expands the use of these assets by integrating them into DeFi services.

The issuance process involves users sending Bitcoin, for instance, and verifying the transaction through the Data Connector on the Bitcoin chain. Once verified, the Flare network issues an ERC20-based $FBTC token, usable within Flare’s DeFi ecosystem or bridged to other chains.

Given the significance of connecting and moving assets across multiple chains, stability is paramount. Flare ensures this through multiple mechanisms. Real-time price feeds from FTSO respond to price changes, while Flare’s consensus mechanism upholds process integrity and reliability. Additionally, FAssets employ an over-collateralization model to address trust issues associated with centralized bridge solutions.

Flare’s native stablecoin, USDX, fortifies FAssets’ system stability and liquidity. Users staking USDX receive cUSDX, used as collateral for non-smart contract asset DeFi activities, while providing stable returns based on U.S. Treasury bill rates. This strengthens the collateral base, maintaining stability and liquidity amid market volatility, expanding FAssets’ utility.

# Advancing the Web3 Industry

## Activating Non-Smart Contract Assets

Non-smart contract assets hold a significant share of the Web3 industry. Assets like Bitcoin, Ripple, and Dogecoin represent over 70% of the entire cryptocurrency market capitalization. Flare aims to establish itself as a liquidity hub by connecting this vast market to the Web3 ecosystem.

Central to this vision is FAssets. On December 18, 2024, Flare launched FAssets on the Canary Network “Songbird,” minting $FXRP (Ripple-based FAsset) worth around $2 million within an hour, demonstrating strong market demand and expectations.

Flare is also growing its ecosystem through various DeFi services. Total Value Locked (TVL) is around $50 million, with active platforms like Kinetic (a lending platform), SparkDEX (a decentralized exchange), and Sceptre (a liquidity staking solution). The introduction of FAssets is expected to create synergies with these services and non-smart contract assets.

## Practical Applications of Blockchain Technology

Flare is poised to expand practical blockchain technology applications. The Flare Data Connector, for instance, bridges the gap between Web2 and Web3, accelerating industry adoption. Web3 ecosystems have struggled to trust Web2 data, while Web2 companies hesitate to share data due to security and privacy concerns. Flare’s built-in data oracle ensures safe on-chain use of off-chain data, addressing these issues with validated reliability and integrity.

In November 2024, Flare’s technology was recognized when it collaborated with China’s national identification system “RealDID” to introduce a cross-border KYC solution. This adoption in the highly regulated identity verification sector highlights Flare’s robust data infrastructure. Industry adoption of Flare is expected to expand, accelerating blockchain technology uptake by companies.

# Towards Industry-Wide Innovation

Flare aims to drive comprehensive industry change through technological innovation beyond blockchain data infrastructure. Flare’s vision, as revealed through recent announcements and developments, centers on two main goals: overcoming technological limitations in the Web3 ecosystem to establish a new service environment, and advancing artificial intelligence (AI) technology through blockchain.

## Overcoming Technical Limitations in the Web3 Industry

The Web3 ecosystem currently faces challenges in data utilization and high computational costs, hindering the development of complex consumer services requiring extensive data, such as Instagram or X. To address this, Flare is implementing various technical approaches.

Flare is expanding its infrastructure to provide up to 1,000 real-time data feeds, ensuring data reliability through decentralized validation. This rich data enables the development of more diverse services. Leveraging its data infrastructure and operational experience, Flare is also building a stable and efficient computing environment while researching trusted execution environments (TEEs).

By combining operational expertise with ongoing research and development, Flare aims to overcome current Web3 ecosystem limitations, supporting large-scale data processing and complex computations.

## Advancing AI Through Blockchain

Flare’s consensus mechanism can also contribute to AI advancements. AI, which derives meaningful results from learning high-quality data, risks degraded outcomes from incorrect data. Flare’s reliable data provision can enhance AI model quality and reduce biases. Moreover, Flare’s reward-and-penalty based consensus mechanism promotes accountable data generation, addressing the dwindling supply of high-quality data. This supports sustainable AI development, merging blockchain and AI technologies to unlock new innovative possibilities.

# Conclusion

Flare is a project with a clear vision to address industry-wide issues, extending beyond blockchain. Co-founder Hugo Philion emphasizes that while many projects focus solely on finance, Flare prioritizes technological advancements, reflecting its commitment to long-term value over short-term gains.

This principle is evident throughout Flare’s development process. Prioritizing reliability and stability, Flare meticulously plans major function launches only after thorough preparation and validation. Hugo underscores the importance of building systematically and steadily, aligning with Flare’s philosophy that prefers long-term trust and stability over immediate results.

This approach underscores Flare’s authenticity in establishing a trustworthy data infrastructure. Flare is more than just blockchain; it’s shaping the future of reliable data infrastructure, deserving close attention.

*This article is a comprehensive review by global Web3 research institution “Tiger Research” on “Flare: All for Data, One for Data,” available on Tiger Research’s official site.