Referred to as the Beating Heart of the network, the Flare Time Series Oracle (FTSO) plays a vital role in providing data and rewards to the network. The first function of the FTSO we are going to talk about is why and how it provides data to the network.
As we will be giving a brief overview of the FTSO below, if you want to learn more in depth details about it you can head on over to The Flare Network's blog and read their article on the FTSO.
Many of us by now have heard of and know a little about smart contracts. Ethereum was really the first blockchain to showcase the concept of smart contracts through the Ethereum Virtual Machine (EVM).
To put it simply, smart contracts allow logic to be coded on a decentralized network. This allows applications to be transparent and verifiable. You as the end user need only to trust the smart contract code and the network protocol to do what it says it will and not people or corporations to stand by their word.
While smart contracts themselves were a huge leap for crypto, it had one major deficiency, and that is getting data from the outside world. On your journey to navigate this new world of crypto and blockchain you will come across the fact that blockchain code stays on the blockchain and cannot contact the outside world. For those who know what an API is, smart contracts themselves CANNOT make API calls, and therefore can't get data from sources outside of a blockchain. Enter the FTSO and Signal Providers.
Described in more depth in our Signal Provider overview, the FTSO gets external data from Signal Providers, commonly known as Oracles in the blockchain world. Signal Providers exist in the off-chain to collect data, such as asset prices, and deliver it to the FTSO. The FTSO ensures the data is fair and accurate and then makes the data available to network applications.
The first type of data the FTSO will accept from Signal Providers is pricing data for its supported crypto in US dollar denomination. This will allow the first wave of network applications to utilize these feeds.
The FTSO incentivizes good actors through a rewards system. In Proof of Stake networks, people who secure the network (validators), have to put up the native network token as collateral. Malicious actors get their collateral taken away or slashed. While this sounds reasonable, it is not scalable. The more value that is brought onto a Proof of Stake blockchain, the more collateral you need to secure that blockchain. This essentially locks up value and slows down the velocity of value.
The Flare Network is different in that it does not rely on its native token, Spark (FLR), to secure the network. In doing so, Spark can now be used to create utility for all its holders. This is so important to understand, as you get the best of both worlds here, a secure network with fast transaction times at low fees while incentivizing its participants to use and grow the network.
To learn more about all the different types of rewards you can earn on the network check out the Ways to Earn article.