The Internet era has led to the explosion of personal data sharing online, which has left many deeply concerned with how corporations use and misuse user data, often without consent (think: healthcare, fintech, advertising, even collateralized DeFi lending).
Distributed blockchain architectures combined with privacy-preserving technologies can solve the problem of centralized data ownership. However, many of the privacy-focused developments in the space are highly specific and financially-targeted (like Zcash). There’s a pressing need for a general paradigm to enable better data privacy at the compute layer on the blockchain. And by combining privacy features with scalability Oasis offers a unique solution to DeFi apps currently blocked by the costs of Ethereum.
The Oasis Network offers a unique versatile design that is highly customizable, scalable, and privacy enabled.
Here’s why the Oasis Network stands out from existing layer-1 protocols, and why it has the potential to redefine existing crypto use cases like DeFi, and the web more broadly.
Privacy-Enabled Blockchain: The Oasis Network is a scalable and privacy-enabled blockchain. ParaTimes on the Oasis Network can leverage confidential computing technology such as secure enclaves to keep data confidential — unlocking new use cases and applications for blockchain.
Scalable, Private DeFi: The Oasis Network’s privacy-first design can expand DeFi beyond traders and early adopters — unlocking a new mainstream market. Plus its innovative scalability design brings fast speeds and high-throughput to DeFi transactions.
First to Enable Data Tokenization: The Oasis Network can Tokenize Data, unlocking game changing use cases for blockchain, and an entirely new ecosystem of apps and projects on the network — powering the next generation of privacy-first applications.
The Oasis Network is structured in two parts: the Consensus Layer and the ParaTime Layer. The Consensus Layer runs the proof-of-stake consensus algorithm and maintains the immutable history of the data. ParaTimes are parallel computing environments that can interface with the Consensus Layer. Together, the Consensus and ParaTime Layers power secure computation and storage for a diversity of use cases.
The Network has support for a ParaTime that is backwards compatible with Ethereum, meaning any Ethereum-based Dapps can run on Oasis. The Network also offers 1000 transactions per second, compared to Ethereum’s 13 transactions per second, and considerably lower gas fees. Oasis is currently sponsoring a hackathon on the EVM compatible ParaTime where participants can earn rewards for completing various challenges.
The Oasis Network offers an extremely promising model for an abstraction that enables powerful, customizable privacy across blockchain-based applications. By separating data storage from data processing, the Network offers strong guardrails around how data is generally managed within a project, enables finetuning specific privacy-rules for specific workflows. Several prominent projects, including Nebula Genomics and Binance’s CryptoSafe Alliance, already use the Oasis Network to power their privacy-first features.
As we near the launch of Oasis’s Mainnet, we hope to see dozens of other projects leverage Oasis to build a privacy-first online world.
The Privacy Problem
Since the dawn of the Internet age, the amount of personal information that individuals share online has grown exponentially. Social networks like Facebook have documented our personal history, payment platforms like Venmo have linked to our bank accounts and life savings, and health apps like Apple Health know all of our vulnerabilities and health considerations. With this explosion of data, individuals have grown more and more wary of how corporations use this data, often for-profit. Just two years ago, news broke over the famous Facebook data leak to the political consulting firm Cambridge Analytica.
Much of preserving data privacy is bottlenecked by the existence of centralized databases, where a single central party has complete access over the entirety of a system’s data for all its users. The development of the Bitcoin blockchain challenged this centralized paradigm, suggesting that the data record should be distributed across thousands of computers, with each computer cryptographically verifying the accuracy of the data history. This led to the development of dozens of privacy-preserving financial products, like Bitcoin and Zcash, that can mask the identity of their users. Most of these projects remain highly specific, though, and we have yet to see a generalization for how to maintain user data privacy across diverse use cases.
These privacy challenges don’t just exist for the centralized web, but also for many existing layer-1 protocols. Today, for example, DeFi is plagued by front running and slow mainstream adoption. The public nature of data on most blockchain networks means handling sensitive data is either impossible or incredibly risky on a blockchain network. To remedy the DeFi space, blockchain DApps more broady, and the centralized web, we need a platform that is decentralized, powerful, scalable, and able to keep data private and confidential.
What’s the solution then?
The Oasis Network, produced by the Oasis Foundation, is a privacy-enabled blockchain for open, decentralized finance, and a responsible data economy. The network, whose Mainnet Beta launched October 1, aims to provide powerful primitives and features that, when combined, can support a new ecosystem of privacy-preserving DApps and applications — expanding blockchain and DeFi beyond early adopters and traders to mainstream users.
Here are a few of the core technical highlights that make the Oasis Network stand out:
Separates consensus and execution into two layers — the Consensus Layer and The ParaTime Layer — for better scalability and increased versatility.
Separation of consensus and execution allows multiple ParaTimes to process transactions in parallel, meaning complex workloads processed on one ParaTime won’t slow down faster, simpler transactions on another.
The ParaTime Layer is entirely decentralized, allowing anyone to develop and build their own ParaTime. Each ParaTime can be developed in isolation to meet the needs of a specific application, such as confidential compute, open or closed committees, and more.
The network’s sophisticated discrepancy detection makes Oasis more efficient than sharding and parachains — requiring a smaller replication factor for the same level of security.
The network has broad support for confidential computing technology. The Oasis Eth/WASI Runtime is an open source example of a confidential ParaTime that uses secure enclaves to keep data private while being processed.
Together, these features offer powerful abstractions that allow developers to access privacy-preserving and security-enhanced properties of the blockchain, in a meaningful and seamless way. Privacy can enable several new applications in DeFi, like private dark pools, private stablecoins, under-collateralized loans, and more. For example, by providing end-to-end confidentiality DeFi lending apps can leverage reputation based data (such as credit score, or bank statements) to determine an individual's creditworthiness without ever exposing their personal data — something largely impossible on layer-1 chains today. Through private DeFi DApps like these, the Oasis Network can expand DeFi to larger markets and help it solve more meaningful and relevant problems for today’s user.
The network doesn’t just support end-to-end confidentiality of data, but also offers up to 1000 transactions per second, compared to Ethereum’s 13 transactions per second, and considerably lower transaction fees, which makes it an even more compelling candidate for future, differentiated DeFi developments.
The network also enables data tokenization — a capsule of data and set of access policies that control how the data can be used and accessed. This new kind of digital asset (Oasis calls CryptoData) can allow individuals to take part in open, fair data marketplaces, or even donate their data for science and research without the risk of it being misused or exposed.
How does it all work?
The Oasis Network consists of two components: the Consensus Layer and the ParaTime Layer.
The Consensus Layer runs the consensus algorithm and stores the immutable history of the Oasis blockchain. The Layer is run by a set of validator nodes, which run proof-of-stake consensus.
The ParaTime Layer is what Oasis Network users directly interface with. ParaTimes are essentially distinct compute environments connected to the Consensus Layer. Anyone can build a ParaTime, and they can be designed to meet a broad range of use cases. For example, ParaTimes committees can be made large or small, open or closed, confidential or non-confidential — allowing for faster, more secure, or private executions depending on the requirements of a particular use case. Moreover, ParaTimes can run simultaneously, allowing the network to process many transactions in parallel.
One example of a ParaTime is the Oasis Eth/WASI Paratime, which requires participating nodes to use confidential computing technology to keep data private while in use. Each node is equipped with a piece of hardware called a secure enclave that acts as a black-box environment where smart contracts can perform analysis and various data operations. To execute a confidential smart contract, nodes ingest encrypted data with a key. The data can only be decrypted and analyzed inside the node’s black box. Once the computation is complete, the black box returns an encrypted result to the user. These black box or secure enclaves help ensure that data cannot be leaked to the node operator or smart contract writer and that only the expected smart contract is used to process the data. These guarantees provided by a secure enclave enable the new use cases discussed above, such as private DeFi, tokenized data, and more.
Fig 1. Secure Enclaves in the ParaTime Layer (source)
Combined, the ParaTime Layer and Consensus Layer work hand-in-hand to power scalable, high-throughput DApps and, with the support for confidentiality ParaTimes, privacy-first data analysis and management for various, customizable use cases.
What has been done so far with the Network?
The Oasis Network is actively fostering an ecosystem of ParaTimes to help support new use cases and applications of the network
Oasis and Second State recently announced the launch of an EVM compatible ParaTime that is fully backwards compatible with, and more performant than Ethereum. This means the Network can support all Ethereum-based Dapps as it diversifies its use cases. The ParaTime also offers throughput orders of magnitude higher than Ethereum at less than 1% the gas cost — meaning Ethereum-based DApps can run faster and more efficiently on the Oasis Network. The ParaTime supports the entire Solidity tool chain, and the team has plans to add support for confidential EVM smart contracts in the coming months. To showcase the new ParaTime Oasis and Second State have launched a hackathon. Folks can earn rewards for completing tutorials and building DApps on the ParaTime before the 23rd. Learn more here.
The Oasis Labs team is also actively working on Enterprise use cases that will leverage their own confidential ParaTime/ They recently announced several high-profile projects, for various privacy-preserving use cases. Nebula Genomics, which aims to give users complete control of their genomic data, uses the Oasis Network to encapsulate their privacy-preserving genomic analyses. Binance is also partnering with the Oasis Network to build the CryptoSafe Alliance, where secure, sensitive information about crypto breaches and attacks and bad actors can be shared.
With the recent launch of Mainnet Beta, it likely won’t be long before the Network is available in its full production capacity. When Mainnet launches, we’re likely to see an explosion of privacy-preserving projects from all around the Oasis Network community.
Fig 2. Oasis Network Community
The explosion of the data world has made privacy one of the most pressing concerns about the future of technology. The Oasis blockchain architectures have the power to enable several privacy-preserving features but are hard to generalize across multiple different use cases and implement scalably. The Oasis Network offers a promising example of a privacy-preserving blockchain, that modularizes its architecture to enable a variety of use cases. By combining blockchain and secure computing, the Oasis Network enables dozens of new privacy-preserving features that can be natively built into applications.
The potential of data tokenization and DeFi is already being explored, with exciting projects like Nebula Genomics and the CryptoSafe Alliance. As we get closer to the final launch of Mainnet, we hope to see dozens of more use cases that leverage Oasis’s powerful abstractions, enabling better user-oriented privacy for everything we do on the blockchain.
- Paul V
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Hi, I’m Paul Veradittakit, a Partner at Pantera Capital, one of the oldest and largest institutional investors focused on investing in blockchain companies and cryptocurrencies. The firm invests in equity, pre-auction ICOs, and cryptocurrencies on the secondary markets. I focus on early-stage investments and share my thoughts on what’s going on in the industry in this weekly newsletter.