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DIA Guide: Bringing Open Financial Data to the Blockchain

An introduction to the DIA project, background, it’s working, architecture, DIA token and conclusion.

Contrary to the popular belief, smart contracts aren’t actually ‘smart”. Sure, they are self-executing complex codes, however, they also need external data to function effectively. That’s where the decentralized data oracles come in. DIA is an example of one such project. 

The oracles procure secure and reliable data from a variety of sources and then filter and transmit them to the smart contracts that are required for the resolution of contracts. They can help settle liquidations, auctions, bond draws, automated portfolio rebalancing, as well as assist in price discovery, among other things. 

Table of Contents

Background

The DIA project is run by the Switzerland-based non-profit organization, DIA Labs. They have been working on the project since 2018 when the DeFI field was still unheard of. DIA Labs is funded by the DIA Ecosystem Token Pool.

Currently, a total of 25 million DIA Governance tokens out of the total supply have been reserved for the pool. 

However, the token holders can always propose additional funding through voting. Even though the project is under centralized control for now, complete autonomy is planned by the year 2025 through wide DIA distributions. 

What Is DIA?

Decentralized Information Asset or DIA is a decentralized data oracle project. The official statement describes it as “an ecosystem for open financial data in a financial smart contract ecosystem”. It aims to bring the data analysts, providers, and users together.

Itis an open-source platform and uses crypto-economic incentives to supply, share, and use crowd-sourced data. It provides a secure bridge between off-chain data and on-chain smart contracts. Though the protocol can be used for a variety of purposes, it’s specifically focused on Decentralized Finance (DeFi).

How DIA Works?

The mode of operation for the DIA platform can be summarized by the steps of the data request, as well as its submission, subsequent validation, storage, and usage.

Data Request

The DIA system receives requests from smart contracts or projects, to provide particular data that isn’t already available on the platform. It then starts the proceedings to provide that data. The payment is made in DIA tokens, once data has been validated. 

Data Submission

Then, the data providers establish a connection and provide information. They are incentivized by the DIA token rewards, which are offered for data services. The price of the data is determined by its freshness and by the dollar worth that it helps secure.

Validation

Next, the data is verified through a staking mechanism. The community will determine the authenticity of the provided data. There are rewards for offering the correct solution and penalties for providing wrong information. The team also offers additional bounties for errors, bugs, attack reporting, etc.

Data Storage

The validated data is kept in an open-source database that is cryptographically secured, and thus, immutable. The blockchain platform curates data to be resistant to manipulation before it gets published on the platform.

Usage

Finally, the data is usable and accessible through on-chain oracles or off-chain APIs. The historical data already published on the platform can be acquired free of charge. However, the payment is requested for live prices or specific APIs.

DIA Architecture 

The system architecture consists of the data collection layer (data is sourced from exchanges or price tickers), data storage layer (time-series database which stores data), data filter layer (price and supply filters to refine data) and data connectivity layer (providing data access to external Apps). 

DIA Governance Token

The protocol’s native token is the DIA governance token, which is used to power all activities on the platform. The token holders can themselves vote on important matters or delegate their votes to someone else, to act on their behalf. It can also be used to drive data collection, validation, incentivizing the DIA ecosystem development and access to data.

The DIA token has a maximum supply of 200M tokens, out of which 51% are kept in reserve. 10% are reserved for the investors, 12% for the team, bonding curve for liquidity provision 15% and ecosystem pool 12%. It is generally traded on decentralized exchanges. 

Conclusion

The decentralized data oracles are fast becoming popular, owing to their utility and role they play in enhancing the function of the smart contracts. There are several such projects in the space, however most of them are yet to see significant adoption.

DIA is a strong contender in the data provision, security and access industry. Been in development for almost 2 years, the platform appears to be ready for integration and usage for real world applications. 

Source: https://www.asiacryptotoday.com/dia/