In the wake of the continuing uncertainty in crypto surrounding the FTX debacle and the fall of other established crypto institutions: the word on everyone's mind is SECURITY.

It seems like every other day another crypto scammer vanishes with users' money, seemingly unstoppable giants of the industry come crashing down: all while the ongoing international debate on regulation continues to create a swirling mist of FUD.

Know Thy Self, Know Thy Crypto

In the early days of cryptocurrency, its earliest believers clung to the dream of eventual full decentralization of society. The comparative transparency and security of the blockchain compared to traditional ways of doing business continues to offer hope of a future where individuals had maximal control over their data, their funds and ultimately their lives. A decentralized society is a free society.

Oracles: An Obstacle to Decentralization

Here at DeOrderBook, we are long-time believers in this dream of decentralization. As crypto investors and builders ourselves, we know firsthand how risky crypto investments can be. That's why we've designed our protocol to operate completely free of oracles: what we believe to be one of the biggest and most underrated risks in DeFi today.

Oracles and the Blockchain

As secure and transparent most blockchains may be, they still have to communicate with legacy Web 2.0 systems to send and receive data. That's where oracles come in: entities that connect blockchains to the outside world, tirelessly sending information to smart contracts to execute on. Types of data that oracles might send include payment completion information, current token prices, outcomes of bets on horse races or political elections... the list goes on.

Smart contracts operate on-chain, while real world events and data points happen off-chain. Yet, relying on oracles as a bridge to communicate between the real world and the blockchain make it frighteningly easy to manipulate existing systems if you know what you're looking for.

Oracles are Easy Targets for Hacks

Centralized oracles

The typical blockchain oracle is centralized, making it an easy target to manipulate smart contracts and the data they rely on. Let's take the example of the classic man-in-the-middle attack. Alice thinks they're talking directly to Bob, but unbeknownst to her her messages are being intercepted in the middle and changed before being sent on to Bob; and vice versa. These types of hacks are disturbingly common even in the brave new world of DeFi. CoinTelegraph estimated that in 2022 alone, oracle hacks led to $54 million in stolen funds.

Let's take a quick look at just a few recent oracle-related hacks:

Mar 2023 Tender.Fi exploited with price oracle glitch
The white-hat hacker reveals a vulnerability by borrowing $1.59 million worth of assets... and depositing 1 GMX token (value around $71) as collateral.

Feb 2023 BonqDAO hacked with price oracle hack
$120 million stolen through manipulating token prices, and triggering liquidation of protocol troves

Dec 2022 Lodestar Finance hacked through price oracle
6.9 million in funds stolen as a hacker manipulates token prices through the oracle, then 'borrows' the entire liquidity of the protocol.

Decentralized Oracles

But wait, some naysayers might say. Aren't there also decentralized oracles available nowadays, such as Chainlink?

It's true that decentralized oracles can increase the reliability of the information fed to smart contracts; aggregating data from multiple sources rather than relying on just a single point of potential failure. But though it's an improvement on the traditional model, decentralized oracles are still not fully on-chain and still cannot be fully protected by the typical security and transparency offered by public blockchains.

It's clear: reliance on oracles means putting users in a position where their funds are at risk. They say history is written by the winners... it's not a stretch to say that those who write the data get to win too.

DeOrderBook: A World Without Oracles

All of us at the DeOrderBook protocol believe users deserve more than the constant risk of their funds vanishing into thin air. Blockchain technology is proven, available to all and able to give users full control over their data and their funds: why should users settle for anything less?

That's where DeOrderBook comes in.

DeOrderBook is an up-and-coming fully decentralized optionality protocol launching first on Ethereum with a yield-enhanced limit order use case for the Bitcoin market. Our protocol eventually aims to satisfy various risk appetites of spot, options, and derivatives traders while leveraging the attractiveness of DeFi to both retail and institutional finance actors.

The State of DeFi Optionality
DeFi optionality is one of the biggest and most lucrative segments in crypto: with DeFi Llama data showing that just the top 10 DeFi options marketplaces alone have a combined Total Value Locked (TVL) of $180 million.

The DeOrderBook Difference

Yet what sets DeOrderBook apart from its competitors is its zero-oracle protocol design. Combining decades of experience in blockchain as well as more traditional algorithmic trading, the DeOrderBook team has developed a protocol design that replaces the vulnerable oracle with a purpose-built and fully on-chain system of game theory and precision economics.

Removing oracles from the equation means on DeOrderBook, users' funds are safer than anywhere else. But on top of this ironclad approach to security, the protocol gamifies the entire trading process and incentivizes users with real yield, backed by real assets.

To top it all off, in the spirit of offering users full freedom of movement when it comes to their funds: DeOrderBook allows users to unwind their limit orders at any time with no minimum lock-in period, provided they have the required collateral.

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