Deep Dive into the Oasis Protocol

Introduction

After the Ethereum mainnet launch in 2015, we saw the first major killer use case for general purpose computing blockchains: DeFi. DeFi is the digitization of every financial service that humans use. Despite massive growth of the DeFi space in the last few years, it is nowhere near mass adoption. I think one of the major issues that needs to be solved is privacy. Currently, every single transaction on all the major blockchain platforms is transparent and can be tracked. While transparency is a property that is embraced in peer-to-peer networks and proves to be very convenient for people who want real time data of blockchain activity, it poses some serious security issues for those that do not want their finances out in the open for everyone to see. If we are to move from traditional finance to decentralized finance, I believe this will need to be solved.

The Oasis Protocol is a blockchain project that aims to tokenize data, paving the way for individual ownership and new business dynamics in the collection and usage of data. With a strong focus on privacy and scalability, the Oasis Protocol can open up a world of open sourced individual data contribution and profit generation that rivals today’s centralized data collection systems within big tech.

Team Background

The team is led by a team of security experts, computer scientists, and entrepreneurs:

  • Dawn Song, CEO: Song is a Computer Science professor at the University of California Berkeley. With a strong background in computer security, blockchain systems, and artificial intelligence, Song founded Oasis in 2018 to bring data privacy to Web 3. She serves as the founder and active CEO of Oasis Labs.
  • Vishwanath Raman, Head of Enterprise Solutions: Raman has held various software engineering and security research roles in multiple companies before joining Oasis Labs as the Privacy Architect.
  • Jernej Kos, Director of Oasis Foundation: Kos holds a PhD in Computer Science with software and research experience in distributed systems.
  • Borivoj Kos, Director of Operations: Kos is the active CEO of Info House Skopje, a consulting company he founded in 2018. With a strong background in public administration and law, he brings lots of expertise in implementing administrative procedures for IBF International Consulting and Lattanzio Advisory.
  • Xinshu Dong, Technical Advisor: Dong was the co-founder of Zilliqa and RockX — two companies that provide tooling for scaling decentralized applications. He then joined Saison Capital and IOSG Ventures as an advisor and partner.

Technology and Network Architecture

The Oasis Network is a Layer 1 proof-of-stake blockchain that consists of two components: the Consensus layer and the ParaTime layer.

The Consensus layer is a scalable, high throughput proof-of-stake layer. It is designed to handle operations like token balance transfers, staking, delegation, commits of values from Paratimes, ParaTime committee scheduling, etc. Any state that needs to be universally acknowledged in the Oasis ecosystem is settled on the Consensus layer.

The ParaTime layer is made up of many different “parallel runtimes” that any staker can create and develop. ParaTimes run in parallel, meaning complex computation on one ParaTime won’t affect the speed of throughput on another ParaTime. The only requirement of the ParaTimes is that they run something called a Trusted Execution Environment (TEE). This is what the Oasis team calls a “hypothetical blackbox” to ensure that data is never leaked to node operators or application developers.

The Trusted Execution Environment AKA “hypothetical blackbox”.

On the internet today, companies ask users for access to their data. In many of these cases, when the user agrees, they give away a copy of their data. The second that a copy of their data is sent out, the user has lost control of their data and the company can do whatever they want with the data. On Oasis, data is an asset. In order to use this asset, companies must interact with user data in a Trusted Execution Environment (TEE). This way, users can ensure that (1) they own their data, and (2) a third party can only use their data in a trusted environment, and (3) once they leave that environment, third parties no longer have access to that data. Users’ data on Oasis can only be used and computed over within the TEE, preventing any loss of control over their data. In order to use a user’s data twice, the third parties would have to ask for permission again.

Aside from TEEs, ParaTimes have lots of flexibility in how they can operate. For example, to fit a specific application’s needs, ParaTimes can: (1) be made permissioned or permissionless, (2) run different virtual machines, and (3) have certain hardware requirements that can meet certain runtime specs.

Crypto-economics

Token supply and uses

The ROSE token has a capped supply of 10 billion tokens overall with 1.5 billion tokens in circulation at launch. Approximately 2.3 billion tokens will be distributed to validators as staking rewards for helping secure the network over time. In general, $ROSE is used for transaction fees, staking and delegation at the Consensus layer.

Token Distribution. Source: Oasis Network Primer documentation.

Currently, the minimum staking amount per entity is 100 tokens. Every entity elects one node to the consensus committee. Every node that signs at least 75% of the blocks in an epoch is eligible for staking rewards between 2% and 20%, depending on the length of time the tokens have been staked.

Ecosystem

Metrics

Since Oasis launched its mainnet in November of 2020, the price of ROSE has seen a bit of steady growth. A $160 million dollar ecosystem fund raised in November of 2021 with backing from Dragonfly Capital, Draper Dragon Fund, Electric Capital, FBG, Jump Capital, Kenetic Capital, NGC Ventures, and Pantera Capital aims to seed early stage projects on the blockchain.

Price of $ROSE token. Source: CoinGecko as of Feb 2022.

Oasis currently has a total TVL of 84 million USD with YuzuSwap, a decentralized exchange application, as the main contributor.

TVL in DeFi on the Oasis network. Source: DefiLlama as of Feb 2022.

Popular ParaTimes

The Emerald ParaTime is the official EVM compatible ParaTime for the Oasis Network, enabling existing EVM-based dapps to be easily integrated into the Oasis ecosystem. Currently all three protocols on Oasis are built on the Emerald ParaTime.

The Cipher ParaTime aims to help DeFi scale on the Oasis Network. Cipher has a bridge to the Ethereum network, lower fees, and a WASM-based smart contract environment. The data privacy on Oasis can enable operations like undercollateralized loans and prevent front-running during transaction processing.

Partnerships

In addition to strategic partnerships, Oasis has many connections with academic institutions and enterprises where they are running various pilot programs to test the network and explore different use cases.

The Oasis Network ecosystem
Partnerships on the Oasis Network

Final Thoughts

Oasis is one of the pioneers in the data tokenization space. Data privacy on a blockchain enables a suite of novel use cases that may unlock new business models in the crypto industry. DeFi has completely changed the way the financial system will work in the future, but having everything transparently on-chain causes complications and privacy is one of the biggest obstacles to mainstream adoption of blockchain. With a live mainnet and many more applications in the works, Oasis has some traction towards solving that issue.

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