# BlackRock Launches ‘BUIDL’ Project, Bringing U.S. Treasuries to the Blockchain

BlackRock, the world’s largest asset manager, has launched its 2023 ‘BUIDL’ project, marking the on-chain transformation of U.S. Treasuries. Investors have hailed it as a groundbreaking move, signaling the true arrival of traditional asset tokenization on the blockchain. However, a critical and often overlooked technology underpinning this quiet revolution is the ‘oracle.’

# What Is an Oracle?

An oracle serves as a ‘data delivery mechanism, or data gateway,’ connecting the blockchain with the outside world. It enables blockchain-based smart contracts to recognize external data. For instance, to operate an insurance contract on the blockchain that stipulates “compensation upon an accident on a rainy day,” the system must determine whether it is raining. This is where oracles come into play. By fetching data from weather agencies and delivering it to the blockchain, smart contracts can assess and execute based on whether the conditions are met. Oracles can link blockchain with a wide range of data, including exchange rates, stock prices, sensor outputs, and even clinical trial results.

# DeFi and Oracles

Decentralized Finance (DeFi) lending exemplifies the functionality of oracles. Platforms like Aave and Compound allow users to deposit cryptocurrency such as Ethereum (ETH) as collateral to borrow stablecoins. The real-time value of the collateral is determined by data provided by oracles. For example, Chainlink aggregates Ethereum price data from multiple sources like CoinMarketCap and CoinGecko, averages it, and verifies it. Based on this verified data, smart contracts can determine, “Ethereum is valued at $1,700. This collateral is undervalued. Proceed with liquidation.”

# Risks of Manipulating External Data

While oracles act as a conduit between reality and the blockchain, they also expose vulnerabilities. The wide range of attack vectors due to external data can pose risks. In 2022, the Mango Markets incident illustrated this when manipulated oracle pricing enabled a hack. The attacker artificially inflated the price of the MNGO token by 30 times, used it as inflated collateral, obtained massive loans, and siphoned off large sums of money. This event underscored that even the smartest contracts are rendered defenseless if the oracle data is corrupted.

# Evolution of Oracles Through Multi-Security and Cross-Verification

Oracles are both the Achilles’ heel and essential infrastructure of the blockchain. Thus, the reliability and security of oracles are directly tied to the trustworthiness of the entire blockchain ecosystem.

Major DeFi platforms like Aave and Compound do not rely on price information from a single exchange. They employ a multi-source structure, aggregating and verifying average values from various data providers before delivering this information to the blockchain. Security mechanisms such as multiple node operations, Byzantine fault-tolerant consensus algorithms, and encrypted transmission protocols are also integrated.

Chainlink stands as a prime example of this sophisticated structure, operating without dependency on centralized data providers and ensuring accurate data through decentralized network cross-verification.

# The Second Wave of Oracles: Real World Assets (RWA)

Oracles are evolving beyond simple price relays into ‘reality reflection systems.’ As the tokenization of real-world assets accelerates, the demand for oracles is soaring. Real-world assets like real estate, government bonds, and art require complex datasets beyond just price, including location, condition, yield, and legal ownership. McKinsey predicts that the RWA market could grow to $2 trillion by 2030, with an optimistic scenario projecting $4 trillion.

# The Oracle Market Leaders: Chainlink at the Forefront, Pyth and RedStone in Pursuit

The oracle market has evolved from early volatility into a landscape where Chainlink dominates, while Pyth Network and RedStone are beginning to leverage their unique strengths to pursue positions as specialized oracles.

### Chainlink: Dominating the Market With Traditional Finance Integration

Established in 2017, Chainlink is the undisputed leader in the oracle market. As of March 2025, its Total Value Secured (TVS) reaches approximately $31 billion, accounting for 53.3% of the entire oracle TVS. It also holds a 76.9% market share in token market capitalization.

From initially offering price feed services for DeFi, Chainlink has evolved into a multifunctional oracle platform providing smart contract automation (Automation 2.0), Verifiable Random Function (VRF), Cross-Chain Interoperability Protocol (CCIP), and privacy data transfer functionalities.

Notably, Chainlink has demonstrated the potential of RWAs and traditional finance integration through pilot projects with SWIFT and UBS, reinforcing its role not just as an ancillary technology for DeFi but as pivotal infrastructure connecting blockchain with financial systems.

### Pyth: Specializing in Ultra-Low Latency for Solana

Pyth is an oracle specializing in ultra-low latency data transmission on the Solana blockchain. With millisecond-level response times and direct data provision from institutions like Wintermute and Flowdesk, Pyth serves over 65 public chains. With the 2024 launch of Express Relay, it now converts MEV (Maximum Extractable Value) into protocol revenue, strengthening its position as the leading oracle for high-speed trading environments on Solana.

### RedStone: Pioneering Dual ‘Push-Pull’ Model with AI Ambitions

RedStone is rapidly expanding its footprint in the oracle market, integrating with over 70 public chains and uniquely supporting both ‘push’ and ‘pull’ data methods. While the push model boasts real-time responsiveness, the pull model offers cost-effectiveness and flexibility based on requests.

RedStone is also pioneering AI integration with its CLARA framework, aiming to establish blockchain-based data exchange structures among AI agents. By providing real-time data for Eurozone government bond ETFs, RedStone is solidifying its presence in RWA-based data integration.

# The Shift Towards Multi-Source Data and Specialized Oracles

The oracle industry is transitioning from single-source price data to multi-source data needs. Gate Research describes this shift as the “second act of the oracle industry.” Projects now demand diverse data inputs from IoT sensors, AI model outputs, medical and clinical data, and even weather conditions and smart contract codes.

For example, IoT-based oracles have connected over eight million devices to the blockchain through Solana-based Echolink, while AI code oracles like Bittensor select and record superior models through algorithmic competition. Bio-oracles are now assessing the value of molecular assets based on clinical data.

# Oracles: The Cornerstone of a Beyond-Price Blockchain Era

Oracles have evolved beyond mere price transmitters, transforming into multifaceted infrastructure connecting industry-specific data to the blockchain. As ecosystems expand from ‘2 to N,’ oracles are now seen as the key players in the growth and integration of blockchain technology across various industries, ensuring they remain pivotal to the infrastructure of the future.