Increasing the Cost Efficiency of Decentralized Oracle Networks

Chainlink's economic model, as outlined by Co-founder Sergey Nazarov, focuses on a virtuous cycle involving the generation of revenue through secure oracle services and the reduction of costs for providing these services. The demand for high-quality off-chain data and secure off-chain computation, such as decentralized smart contract execution and verifiable random number generation, is driving the growth and improvement of the Chainlink Network. Chainlink's expanding capabilities, including cross-chain communication and advanced computation, further enhance its role in supporting trust-minimized applications. Cost reductions are achieved through technical innovations like Off-Chain Reporting (OCR) and VRF v2, blockchain efficiency, and blockchain grants, establishing oracle networks as a public good for the Web3 ecosystem. This efficient model, known as Chainlink Economics 2.0, aims to provide sustainable oracle infrastructure for the burgeoning trust-minimization market, which is projected to become a significant technology sector.