Bern, CH – Swisscom, a major telecommunications provider, announced that it is now joining Chainlink, a decentralized oracle network. Through this pilot initiative, Swisscom hopes to enter the world of decentralized finance (DeFi) and provide more technologically advanced services to its customers.
What is Chainlink & Why Is It Important?
Chainlink was built to provide input on a variety of external sources of data. The Chainlink network provides important data for decentralized financial applications, through which transactions worth several billion US dollars are now processed daily, such as on Aave and Uniswap. The rapid growth of this market is giving rise to new types of value chains and business models that could also gain relevance for the Swiss financial market.
One of the major pain points of blockchain technology is that it has limited abilities to take input outside of its sphere. There are other factors that may influence markets, such as fiat currencies and even the weather, that blockchain is still independent of. As a decentralized oracle, Chainlink can provide input to what is known as smart contracts.
Introducing The Oracle Nodes
Swisscom’s Digital Asset division handles the pilot initiative for oracle nodes, which will continuously feed digital asset price data into the Chainlink network. Swisscom is thus assuming an important role as a supplier for rapidly growing decentralised financial applications.
Oracle nodes act as a bridge to off-chain data, mainly price data. The Chainlink network aggregates price data from all oracle nodes to produce a robust consensus value. Decentralized financial applications can then use this value to settle financial contracts.
Besides Swisscom, many other technology companies already operate such oracle nodes, including telecom giant T-Systems.
Why Oracle Nodes Are Important For Off-Chain Data
Many of today’s blockchain applications (smart contracts) require off-chain data, such as price data for a financial contract or weather information for an insurance policy. Oracle nodes continuously feed this data into the Chainlink network, where it’s merged and made available in aggregated form for blockchain applications. Since the data originates from several oracle nodes, the Chainlink network is robustly secured against failures and issues with individual oracle nodes.
Swisscom believes it is essential to proactively address technological changes in the financial world. After all, it is already one of the largest IT service providers for the Swiss financial industry today. And in order for it to be able to continue offering its customers the best possible solutions in the future, it is important for it to precisely understand the new opportunities offered by the decentralised financial world and make these available to its customers in a targeted manner. Overall, Swisscom’s digital asset team sees no end in sight to the growth of decentralised financial applications. This is especially true in the wake of the increasing shift of transactions, contracts and assets to blockchain-based infrastructures.
Swisscom at the forefront of new financial market infrastructures
Through the pilot initiative with Chainlink, Swisscom is expanding its expertise in the world of decentralised financial applications to remain relevant to its customers in this new world and to continue providing high-quality, state-of-the-art technology services as a trusted supplier.
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Author
Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
