The Importance of Data Verifiability: An Interview with the Founder of Chronicle Protocol, Niklas Kunkel

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Chronicle Protocol has long been the second-largest Oracle provider in the blockchain ecosystem, securing approximately $5bn worth of assets at the time of writing, yet you probably haven’t heard of it. 

As it turns out, this is for good reason. Although Chronicle has been live since 2017, its Oracles were only exclusively available to MakerDAO and its ecosystem. Until now. 

Kicking off with a keynote address at Permissionless, Chronicle Protocol opened upaccess to all Web3 builders – making their Oracles initially available on Ethereum and Polygon zkEVM, in collaboration with Polygon Labs.

Ahead of the highly anticipated release, we sat down with Niklas Kunkel, the Founder of Chronicle Labs, and former IBM Research & MakerDAO, to discover a little more about Chronicle and the person behind this interesting new development for Oracles:

Nik, can you start by telling us a little about yourself and what you’ve worked on in the space?

“Sure, I started out working on the Hyperledger blockchain at IBM Research before joining Maker in 2016 as a member of the founding team. This is where I co-developed the first Oracle on Ethereum with Mariano Conti to facilitate the creation of SAI, the predecessor to DAI. 

During my time at Maker, I also created DSProxy, an industry-standard account abstraction primitive, and OasisDEX, the first decentralized exchange on Ethereum with an order-matching engine. As of 2021, the focus has been on developing Chronicle to drive a new paradigm around the verifiability and cost efficiency of on-chain data.”

What drove you to take Chronicle Protocol in this direction and open up the Oracle of MakerDAO to the broader Web3 space?

“Currently, Oracle protocols don’t reflect the core values of Web3, they lack transparency, they aren’t verifiable, and, particularly on Ethereum, they are prohibitively expensive to operate. 

At Maker, we have a culture of taking as long as we need to build the best solution. We’ve never used an external Oracle protocol. We built our own. This approach has benefitted Chronicle in many ways, resulting in an Oracle product that is market-leading in terms of operational cost, security, decentralization, and transparency.

It wasn’t until we looked outside of the Maker bubble and compared it to other Oracle protocols that it became clear this was something we should spin out and offer to everyone.

We believe that Chronicle’s approach can not only win market share from incumbents but also pave the way for truly decentralized systems. Decentralized systems require unquestionable trust, and we believe the way to achieve this is by ensuring the data they rely on is verifiable.”

When you say verifiable, what does that mean in the context of Oracles?

“Too much infrastructure in crypto operates like a ‘black box’. Currently, Oracles are like fortune tellers, delivering price data that must be taken at face value. We believe this is antithetical to the ethos of Web3, of ‘Don’t trust, verify’. 

Even more so when in the context of DeFi, this data essentially instructs when and if end-users get liquidated, etcetera.

We’ve designed our protocol to interact with our dashboard, The Chronicle, and allow anyone to intuitively track the data we deliver, end-to-end. What price did our Oracle report for ETH/USD at any given time, and, most importantly, how did the Oracle arrive at this value? Which exchanges and pairs were queried, and which Feed was selected? 

We are the only Oracle that doesn’t use data aggregators to cut corners. Our validators query the markets directly, allowing every value we report to be verified, historically and in real-time.”

Caption: A screenshot from The Chronicle on-chain dashboard.

Interesting, so now you’ve delivered on verifiability, what’s on the horizon for Chronicle after launch?

“Now we’ve opened up the protocol to everyone outside the Maker ecosystem; we will initially focus on new chain integrations, ensuring that our cost-efficient & verifiable Oracles are available on all the major chains, starting with EVM. We will launch with a subscription model, and EVM chains are where most of the TVL and customers are.

Chronicle will continue to consolidate on the price feed vertical but also continue our development of the real world asset (RWA) Oracle vertical. Thanks to our Maker heritage and their dominant market share of on-chain RWA deployments,  we are uniquely positioned to understand the challenges faced with effectively bringing RWAs on-chain. We’ve already started working on a solution and will look to start testing product market fit in 2024.”

About Chronicle Protocol:

Chronicle Protocol is a novel Oracle solution that has exclusively secured over $10B in assets for MakerDAO and its ecosystem since 2017. With a history of innovation, including the invention of the first Oracle on Ethereum, Chronicle Protocol continues to redefine Oracles. A blockchain-agnostic protocol, Chronicle overcomes the current limitations of transferring data on-chain by developing the first truly scalable, cost-efficient, decentralized, and verifiable Oracles, rewriting the rulebook on Oracle data transparency and accessibility.

Learn more about Chronicle Protocol and its transformative Oracle solutions by visiting Chronicle Labs. Stay updated by following Chronicle Protocol on Twitter and join the community in Discord.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.