rewrite this title Flare Co-Founder: Decentralized Data Will Power ‘Future Value’ of Crypto Industry – Decrypt

Data powers the crypto industry—but the limitations of today’s oracles threaten its security, decentralization, and usability, according to Hugo Philion, Co-Founder of “blockchain for data” Flare.

“There are really only very few things you can do without data,” Philion explained during his recent sitdown interview with Decrypt. “Data powers pretty much most of the value of the current use cases, and we think most of all of the future value,” in the crypto and blockchain industry.

However, he explained, the industry’s reliance on off-chain oracles poses risks. “The problem with having an external entity providing the data is that you can’t be certain how that works,” he said, adding that, “today’s oracles have not really been looking strongly at security and decentralization and usability.”

The worst-served data item on two leading oracles has “only five entities that are serving the price now,” he pointed out. As well as working out how to integrate external data services, blockchain developers have to figure out if they firstly have the data I need, and secondly, whether the data I need has enough people serving it for me to feel “at least moderately comfortable with the risk.”

Using restaking to secure oracles introduces the risk of slashing from the base layer, Philion added. “It’s essentially a little bit like using more and more financial engineering,” he said. “You may think that a risk isn’t large, but it can become very, very large very quickly.”

Decentralizing data

Flare’s solution is to use existing Web3 decentralization tools and blockchain technology to “adequately and safely insert data onto a chain.”

Philion explained that on Flare, “all the data comes directly from the network.” Instead of validators, the network has 100 infrastructure providers, who provide not just validation, but data to the network—secured by their own stake as well as delegated staking from network participants.

Each infrastructure provider contributes to two protocols: the Flare Time Series Oracle (FTSO) and the Flare Data Connector. The Flare Time Series Oracle, he said, is “kind of what it says on the tin; it’s for time-series data, principally prices at the moment, but could be for other forms of time-series data.”

The FTSO provides two types of feeds, Philion explained. Anchor feeds are updated every 90 seconds, and see infrastructure providers “come together, submit their prices, and we find a weighted median, weighted by stake.”

Block latency feeds, meanwhile, provide updated data “every single block for every single price,” across up to 1,000 price pairs, roughly every 1.8 seconds. Using cryptographic sortition, the network selects one infrastructure provider per block to add a delta to the last price, with potential for more infrastructure providers to contribute based on “additional incentives given to add additional volatility to the series,” Philion explained.

“The delta is fixed,” he said—so it can go up, down or remain flat. “Although it sounds incredibly limiting, we’ve managed to achieve with very, very low compute requirements, an immensely accurate set of price feeds,” he explained.

The Flare Data Connector, meanwhile, enables applications built on Flare to use data from external blockchains and the internet securely and trustlessly. Those applications, such as Flare Labs’ FAssets, can then “bring onto Flare what has happened on Ethereum, on XRP, on Bitcoin and other Web3 data—being able to, essentially, with a bit more safety, prove something from an API.”

Underpinned by its decentralized data infrastructure, Flare is already “emerging as a DeFi hub,” Philion said, with multiple projects already building atop its decentralized data infrastructure.

That infrastructure makes Flare a “third generation blockchain,” Philion said. Where Bitcoin represents the first generation of blockchains, capable of simple transactions, and smart contract blockchains like Ethereum and Solana are the second generation evolution of the technology, Flare “takes that a step further by integrating data into the blockchain.”