Background

About DeFi

Finance is one of the most practical applications of blockchain technology, and DeFi (Decentralized Finance) is a prime example of this. DeFi encompasses transactions that eliminate intermediaries found in traditional finance systems, including decentralized exchanges, insurance, and lending. For instance, in decentralized lending, users can mortgage their digital currency to DeFi platforms to obtain interest (known as liquidity rewards) and can also borrow from DeFi platforms. This has become a bright spot in the blockchain industry in recent years.

However, the success of every DeFi protocol relies on Web3 middlewares, particularly Network, as without a network, there can be no DeFi. This is especially true when Finance is considered to be price-based transactions. Accurate prices are required for every trade, position created or liquidated, as well as collateralization. A smart contract is not truly smart unless it's connected reliably to accurate data that exists off-chain. Therefore, Web3 data frameworks, including networks, which are hybrid contracts that link on-chain contracts with off-chain data querying components, become the next critical infrastructure piece needed before DeFi and other next-generation dApps can transition from an experimental phase to compete with and surpass traditional alternatives.

About Web3.0

The definition of web 3.0 can vary depending on the individual, but it generally involves a departure from the current centralized services that rely on a single organization to function. These services, such as search engines, social media, and chat applications, are prone to abuse, as evidenced by numerous cases. Currently, the internet has become a top-down system controlled by a few large players that derive their power from their control over user data in a form of surveillance capitalism.

Web 3.0 initiatives aim to return control over data to those who generate it, marking a significant shift away from the current state of affairs. This move has the potential to solve current information and social issues while creating a more frictionless and humane virtual economy.

Web3 Middlewares

Middlewares, often referred to as "software glue," are computer programs that provide additional services and capabilities to applications beyond what is offered by the operating system. Middleware is responsible for managing data, application services, messaging, authentication, and API management. It serves as connective tissue between applications, data, and users, enabling developers to build applications more efficiently.

As Web3 technology expands into new areas and achieves mainstream adoption, its dependence on middleware becomes increasingly important. While initially intended for peer-to-peer payments, distributed ledger technology has since been applied to solve a range of problems, including data management, social interactions, gaming, and governance. As a result, the need for tools and infrastructure that extend the capabilities of the technology has increased. Distributed peer-to-peer storage networks have emerged to address storage challenges, while state channels, roll-ups, and L2 chains have been developed to improve scalability. Off-chain data communication issues are addressed by networks and other middleware solutions.

About Network

The Network is a system that provides an external data source for smart contracts within the blockchain. It serves as a bridge between in-chain and out-of-chain data, addressing external issues faced by the blockchain. In an ideal scenario, the Network is a free-of-trust system operating on the principles of decentralization, requiring no trust to function effectively.

Numerous projects have emerged to address this problem, with many obtaining price feeds from external data sources such as centralized exchanges via trusted nodes. The data is then uploaded to the blockchain for use by various DeFi protocols. However, a fundamental issue with this approach is the lack of effective verification for price data. Other DeFi protocols obtain their price feeds from decentralized exchanges, but these prices can be easily manipulated due to low transaction volumes. Smart contracts within the blockchain are isolated from the external internet world and cannot access external data directly. Computation within smart contracts is also limited by resource capacity and can be excessively expensive.

The ideal oracle that works for DeFi should include the following characteristics:

• Accuracy: Prices must accurately reflect market prices.

• Timeliness: Prices must be able to react rapidly to changes in market prices.

• Cost of Attack: The cost of manipulating prices must be prohibitively high.

• Decentralization: Prices must be generated and verified in a decentralized and permissionless system.

Network should deliver data to the most:

• Accuracy: The data should be precise and not approximate.

• Validity: The data should correspond to the real world and be accurate.

• Reliability: The data should always be available and trustworthy.

• Timeliness: The data should be up-to-date and not out of date.

• Relevance: The data should be pertinent and useful for the intended purpose.

• Completeness: The data should be comprehensive and complete in scope to be useful.

Project	Description
Chainlink	Chainlink is a decentralized network that offers oracles to smart contracts, making it possible to source off-chain information. Its primary goal is to address the issue of obtaining information from external sources for use in smart contracts.
Band Protocol	Band Protocol provides a decentralized data oracle that enables data to be easily queried on-chain. It uses a delegated proof of stake (dPoS) system to ensure the integrity of the data.
NEST	NEST oracles solve the problem of the on-chain price through decentralized incentive schemes, that is, price oracles.
Tellor	Tellor is a decentralized oracle on Ethereum enabling censorship-resistant access to off-chain data.
DOS Network	DOS Network is a decentralized oracle service supporting multiple heterogeneous blockchains.

About Data Infrastructure

The data economy is a massive industry worth trillions of dollars, but the Network is just one component of the data infrastructure in the blockchain industry. Data is crucial in the modern age, serving as the foundation for the entire economy. It supports public service transformation, business innovation, and democratic engagement, connecting multiple sectors necessary for a functioning society. Data infrastructure includes technology, processes, and organizations, much like our road infrastructures help us get from one place to another. The data infrastructure should facilitate informed decision-making.

However, classic blockchain technology was not initially designed with data needs in mind. It was created to be a secure, deterministic environment for transactions, and the need for data only became apparent when new possibilities and use cases emerged. As a result, the industry is still in its infancy, and the data infrastructure is seriously lacking. The web3 data sector is even younger than the technology itself, and there is currently no standardized and widely adopted protocol for data needs across all sectors, leading to significant obstacles.

Project	Description
The Graph	The Graph is an indexing protocol for querying networks like Ethereum and IPFS. Anyone can build and publish open APIs, called subgraphs, making data easily accessible.
Covalent	Covalent provides a unified API to bring full transparency and visibility to assets across all blockchain networks.
Ocean	Ocean Protocol helps developers build marketplaces and other apps to privately & securely publish, exchange, and consume data.
Dune	Dune Analytics allows users to instantly create and share analysis of Ethereum data.
Infura	Infura's development suite provides instant, scalable API access to the Ethereum and IPFS networks.
Subscan	Subscan is a blockchain explorer built for Substrate based networks.