FTSO Scaling Proposal to Revolutionize DeFi Landscape

Flare Time Series Oracle (FTSO), a cornerstone of Flare's decentralized network, is undergoing a pivotal upgrade through its FTSO Scaling proposal. This transformation aims to significantly expand FTSO's capabilities by supporting thousands of additional data streams, empowering dApps with a wider range of accurate and reliable off-chain information. Beyond cryptocurrency price feeds, FTSO will now cater to diverse data types, including commodity prices, weather forecasts, and financial data, opening up countless possibilities for decentralized applications in finance, healthcare, and beyond. By incentivizing data providers to deliver high-fidelity data, FTSO enables Web3 developers to create more robust and user-centric applications, bridging the gap between Web2 and Web3.

FTSO Scaling Proposal Set to Transform DeFi Landscape

Introduction
The Flare Time Series Oracle (FTSO), an integral part of the Flare Network, is poised to undergo a significant transformation through the recently proposed FTSO Scaling proposal. This advancement aims to enhance its capabilities, making it faster, more reliable, and capable of supporting a broader range of data types.

FTSO: A Decentralized Data Stream
The FTSO, a cornerstone of decentralized finance (DeFi), serves as a decentralized, continuously updating time series data stream. It provides vital off-chain information to dApps built on the Flare Network. Unlike centralized services, FTSO eliminates the need for excessive trust in external entities.

Current Role: Focus on Crypto Price Pairs
Presently, the FTSO focuses primarily on crypto price pairs such as BTC/USD, with updates every three minutes. It facilitates price feeds for various tokens, including ADA, ARB, AVAX, BNB, ETH, FLR, SGB, LTC, SOL, USDC, USDT, and XRP.

Expanding Horizons: Beyond Crypto
However, the potential for time-series data extends far beyond cryptocurrencies. It encompasses a vast array of information, including commodity prices, weather conditions, sports results, inflation data, interest rates, stock prices, and numerous other metrics.

FTSO Scaling Proposal: Paving the Way for Transformation
Flare's FTSO Scaling proposal seeks to unlock the FTSO's true potential by enabling it to support thousands of diverse data streams. This expansion will significantly increase its utility for dApp developers.

Core Components
The FTSO ecosystem comprises four primary components:

• Data Providers: Independent oracles collecting and reporting data to the FTSO, earning rewards for their contributions.
• Delegators: FLR token holders who delegate their tokens to trusted data providers, sharing in the rewards generated.
• dApps: Applications built on Flare that utilize FTSO's data streams.
• FTSO: A set of smart contracts facilitating interactions between the three aforementioned participants.

Decentralization: The Role of Data Providers
Data providers ensure the FTSO's decentralization by operating independently and utilizing varied data collection methods. They submit their findings to the FTSO, which assesses the accuracy of their data. Accurate submissions are rewarded with FLR tokens.

Rewards Mechanism: Incentivizing Accuracy
The FTSO ecosystem encourages competition among data providers through a rewards system. The top and bottom 25% of price submissions are excluded, with rewards allocated to those closest to the median. Data providers with a higher volume of delegated FLR tokens receive larger rewards.

Addressing Inefficiencies: Optimized Workflow
The FTSO Scaling proposal aims to enhance efficiency and reduce gas costs. Data providers will perform calculations off-chain and provide a consolidated result in the form of a Merkle Root hash, significantly improving scalability compared to the existing on-chain process.

Expanded Data Types: Meeting Diverse Needs
Initially, the update will add 25 new cryptocurrency price pairs to the FTSO's feed. Based on user demand, additional data will be incorporated, including stock prices, bonds, commodities, and forex pairs.

Refined Data Submission Process
Under the proposal, the data provider's role will expand. While the commit and reveal process remains intact, two new steps will be introduced: the Sign Phase and the Finalization Phase.

• Sign Phase: Filters out invalid reveals, ensuring only valid data is used in calculations.
• Finalization Phase: Once sufficient signatures are collected, any participant can submit them for voting. Checks verify that 50% of eligible data providers have submitted signatures. The Merkle Root is then published, allowing data providers to verify the accuracy of the calculations.

Evolving Rewards Distribution
The proposed changes alter the rewards distribution process. Data providers will receive 80% of rewards, with the remaining 20% allocated as follows: 10% to those submitting a single, valid signature and 10% to the first five entities that accurately process the finalization phase.

Phased Rollout: Gradual Adaptation
Subject to community approval, the FTSO Scaling proposal will be implemented in three phases:

• Trial Phase: Current data providers receive 100% of rewards.
• Beta Phase: Rewards are split 50/50 between current and updated data providers.
• Depreciation Phase: Only upgraded data providers are eligible for rewards, sharing 100% of the distribution.

Broader Utility for Web3 dApps
The FTSO is strategically positioned to bolster the utility of Web3 dApps by providing access to a comprehensive range of off-chain data. Its evolution will support the development of innovative applications capable of solving real-world problems.

Disclaimer: This article serves solely as informational material and should not be construed as legal, tax, investment, financial, or other advice.