As a bridge between business requirements and critical data of DeFi protocols, the prophecy machine is often invoked as a key network resource during the development of the DeFi ecosystem, playing the core role of “infrastructure”. In the recent “5-19 crash”, the high volatility of the market, the high frequency of the DeFi protocols and the users’ operational needs, also cannot be separated from the key support of the prophecy machine “not to drop the chain”, otherwise the MarkDao liquidation tragedy of “3-12” will be repeated, with irreversible and serious consequences.
What is Flux Protocol?
Flux Protocol, which launched its main network in August 2020, is the first DeFi protocol and decentralized application built and launched based on the NEAR protocol, and is currently dedicated to building a prophecy machine service for high-value protocols and data on NEAR, thus further driving the development of DeFi applications in the NEAR ecosystem and eventually becoming the core infrastructure of NEAR’s DeFi ecosystem.
As a scalable decentralized prophecy machine protocol, Flux not only provides various on-chain data (e.g. assets, commodities, events, etc.) to make market transactions for any digital asset or event.
Thanks to NEAR’s scalability, availability and innovative design driven by NEAR’s random beacons, users on Flux can use all kinds of on-chain data at a very low cost, such as creating and participating in prediction market transactions for less than $0.01 transaction fees.
According to the official plan, Flux Prophecy Machine will also be implemented across chains in the future to provide prophecy machine support services for L1 and L2 protocols with a wide range of usage scenarios.
The “security layer” design of economic incentive game
The typical “bZx Lightning Attack” in February 2020 not only opened the Pandora’s Box of Lightning Attack, but also revealed the risk of traditional prophecy machine feeding: the “attacker” manipulated the price of WBTC/ ETH on Kyber and Uniswap, perfectly exploiting bZx’s simple reliance on The vulnerability of the Uniswap price prognosticator feed was perfectly exploited to sell wBTC at 3x the normal inflated price.
In response, Flux Predictor introduces a “security layer” innovation that provides a wide range of validated data for various high-value DeFi protocols – essentially combining high throughput with economic guarantees, the Flux Predictor is optimized to support API, random and feed data, with The economic guarantee ensures security and guarantees the quality of the feed-valued data.
In the mechanism design, data requests sent through the network are verified and resolved by the verifier, who must place collateral in the network’s local assets, to protect the network through the economic guarantee mechanism, making it difficult for malicious actors to corrupt data requests. The economic assurance mechanism is based on a fluctuating data request cost model – the incentive received is proportional to the total value assurance (TVS) in the protocol, i.e., the model dynamically adjusts the amount of data request cost received by the verifier based on the increase or decrease of the total value assurance (TVS), thus ensuring that the verifier accurately provides the predicted data This provides a significant disincentive to malicious actors, and the model is designed to ensure that validators provide accurate predictive data. This provides a significant disincentive to malicious actors, as the incentive is reduced when the TVS in the protocol is reduced.
Also, to prevent extreme cases from making the financial incentive game a deterrent, for each data request, the user can customize the time span to challenge the results of the prediction machine. In turn, the verifier automates the monitoring of all data requests, and if incorrect data responses are detected from the user, they render a verdict on the response and bet the collateral asset on the outcome they believe to be correct.
At the same time, Flux incorporates a novel liquidity provisioning model by employing automated market making (AMM) for price discovery and creating an open and efficient order book, allowing Flux’s prophecy machine design to achieve finalized resolution times in as little as 30 minutes, faster than any existing fully decentralized prophecy machine.
This provides an additional “layer of security” to existing prophecy machine solutions by allowing the Flux prophecy machine to obtain organic data while quickly completing the validation of event results.
In addition to this, Flux Prophecy Machine can also leverage existing prophecy machines and feeds (Chainlink, Band, Uniswap) so that the aggregation of data contains both on-chain and off-chain key references, fully covering each market.
This multi-layer data aggregation mechanism also guarantees data reliability and tamper-proofness to the maximum extent, avoiding the vulnerability of single node data similar to the “bZx lightning loan attack” and providing developers with a secure and customized feed price guarantee.
Team and Investment and Financing
According to the official website, the core founders of Flux Protocol team, Peter Mitchell and Jasper De Gooijer, are both “crypto world veterans” who have been involved in building DeFi since 2017. Jasper was a scalability researcher at WEB3 and Peter founded EveryDapp.com, a project similar to the crypto world’s “pea pod”, and then worked on Plasma at the Ether Foundation.
Other team members also have rich backgrounds in native crypto, such as developing and maintaining DeFi projects (Rutile, bZx, etc.), as well as traditional Internet giants such as Oracle and Google, making the team highly professional overall.
On May 21, Flux recently closed a $10.3 million seed round led by Distributed Global, with participation from Coinbase Ventures, CoinFund, Uncorrelated Ventures, Figment Capital, IOSG Ventures, and others. Flux CEO Peter Mitchell said the funding will be used to drive DeFi on NEAR, a prophecy machine with high-value protocols and data, and to expand the team to bring in talent.
According to the official website, investors also include top investors such as a16z, Pantera Capital, Coinbase Ventures, in addition to Flux receiving a portion of a strategic donation from Figment’s newly established $16 million fund, whose goal is to ensure that the Flux prophecy machine is available to NEAR Protocol, as well as other L1 protocols and verification nodes on Ethernet scaling solutions, and Figment will provide a seamless verification experience for the Flux community.
A few thoughts on the Flux ecosystem
Flux Protocol, architecturally speaking, benefits from the underlying features of NEAR, thus realizing the advantages of a design designed for high scaling and high resilience, and at this level it does have the backbone to compete with the head prophecy machine on Ether.
Beyond that, Flux Protocol is differentiated by its ability to process, settle and finalize real-world data not only for the public market, but also for other protocols, by aggregating data to meet their diverse and customized needs.
Like Pulse, developers can use Flux’s corresponding open source tools to build a marketplace from scratch or integrate it into existing financial products, thus significantly reducing the cost and time of merging blockchain technologies while meeting customized data needs.
As of June 8, Flux Protocol has 10,500+ SDK downloads and more than 10 projects built on Flux Protocol, so we can say that the protocol ecosystem built around Flux has successfully taken its first step.
If we make a simple analogy, ChainLink, Band and other prophecy machine projects, almost all the DeFi protocols are inseparable, but more like browser plug-ins – essential, but only the pop-up demand when invoked, use it and go. Flux Protocol, on the other hand, is a killer application like WeChat Pay – thanks to its customizable embedding advantage, it can be deeply embedded into all kinds of DeFi protocols as a key component, and even take the core position to gradually form an ecology with itself as the center, which is a huge challenge, but quite courageous.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/read-flux-in-five-minutes-targeting-the-near-public-chain-as-an-essential-defi-core-component/
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