Zap Protocol: Revolutionizing Oracles and Decentralized Finance
Smart contracts hold many promises, allowing for the automatic and decentralized distribution of value and other digital assets in a secure, predetermined way. The biggest obstacle to the further growth of smart contracts is the need to receive data about the real world. They cannot access information that lives outside of the blockchain they reside on. For example, if you want to make a smart contract that is based on the current exchange rate of ETH/BTC, you need a way to get that information (likely sourced from a trusted crypto exchange’s API) onto the blockchain so that it becomes accessible by the smart contract.
This is where oracles come in. Oracles are third-party services that provide smart contracts with external information. They are basically data sources that are used as a bridge between smart contracts and other external sources. Both smart contracts and decentralized applications (DApps) need oracles to access real world data.
There are many solutions and oracle platforms built, with the most popular at the moment being Chainlink, but nobody is offering a complete solution to the oracle problem. Except Zap.org. Zap is the first decentralized and permissionless platform that allows anyone to create oracles to securely and reliably deliver data from any external source onto the blockchain. It was the first oracle platform to be launched on mainnet (January 2019). But Zap is not just that. It is also a marketplace that makes it easy to buy, sell, create or find the data you need and plug it into a smart contract, and a toolkit that enables developers to create DApps and smart contracts that incorporate real world data.
Zap allows data providers (i.e. the creators of oracles) to list their data feeds/oracles on the Zap Store for free, a “one stop shop” marketplace for finding the data feeds you need, ready to be accessed by a smart contract. Can’t find what you’re looking for? You can create your own oracle with just an API and the Zap.tech oracle creation toolkit. Alternatively, you can also fund a community bounty for the creation of a new oracle. Perhaps the most exciting feature of the Zap platform is the ability to create customizable bonding curves, algorithmic price functions that change the cost of subscribing to an oracle based on the number of users subscribed. Zap invented the term “bonding curves”. In simple words, a bonding curve is a smart contract that issues tokens as one stakes or “bonds” value and the value bonded stays in the contract ready for two scenarios:
To spend the secondary token, which releases the value to the service provider.
To sell the secondary token back to the contract at the price point reflected by a curve at any time.
In other words, a data feed or oracle may start out being relatively cheap in order to draw in the early adopters, but become more expensive (thus profitable) as it becomes more widely used.
Why is the bonding curve mechanism important?
It creates a decentralized exchange (DEX) since it uses an algorithmic marketmaker (the pre-set price curve) to eliminate order books and provide a fully liquidity environment for instantly trading tokenized assets. When you bond/unbond, you are trading with a smart contract rather directly with buyers and sellers. This is the solution that will lead to further decentralization.
Bonding curves are also the decentralized solution for instantly creating a market for a tokenized service or asset without having to rely on centralized exchanges. With Zap anyone in the world can access the platform and either provide, buy, or speculate on various tokenized services. Additionally, Zap Protocol has ERC20 token issuance capabilities, similar to Ethereum.
Oracles and tokens are just two of the powerful tools available when building with Zap Protocol. Leveraging its complete set of advanced tooling, Zap is able to realize all sorts of complex blockchain products, instantly.
All of these exciting features are facilitated by the ZAP token, which is used for monetizing feeds as well as access to the platform’s data. In order to launch or interact with a specific oracle on the decentralized Zap marketplace, you must first bond ZAP tokens to that oracle, locking that ZAP and producing a number of “dots”. A dot is an access token payable to the oracle for a single query. Dots cannot be exchanged between addresses, and are not divisible. Anyone who wants to access an oracle’s data must first bond ZAP tokens to that oracle, producing a private supply of dots.
ZAP is an ERC-20 token whose supply was minted once and therefore fixed. The maximum supply of ZAP is 520 million. In the ICO, 33% was made available to the public, while the rest were set apart for long-term budgets, bounty programs and finally founders and advisors.
Zap Protocol and DIVI Project Partnered to Create Zap Wrapped Divi in the Zap platform. Divi announced the partnership between the two teams as they work to expand the capabilities of both their technologies.
Zap Entered Blockchain Gaming with Siege Worlds.
Siege Worlds is a cryptocurrency-powered multiplayer online game and it will feature ZAP token as one of the in-game tokens which you can spend or earn with.
Zap has also partnered with Coingecko, a market leader in providing fundamental analysis for the crypto market. The new collaboration will see Zap’s innovative bonding curve technology be used to curate CoinGecko’s high-quality data feeds, and market participants can explore the possibilities of its unique properties. CoinGecko thus becomes one of the first companies in the world to fully embrace innovative bonding curve technology, offered right out of the box by Zap Protocol. In the coming months, both dev teams expect to work closely to develop further benefits and ensure a smooth and proper implementation.
In January 2020, Zap signed a strategic partnership agreement with Howdoo, a decentralized social media and content delivery platform for today’s generation.
Zap also signed a major distribution contract with Techno Brain, Africa’s leading technology company, for sales and channel partnerships of its data management and analytics software across Middle East and Africa.
In mid 2018, Zap partnered with Stox, an open source Ethereum-based prediction market platform, to provide real-world data about events listed on Stox’s prediction market.
Finally, in late 2018 Zap announced a partnership with the billionaire businessman and entrepreneur Sean “Diddy” Combs.
Main use cases and real world applications
The use cases for the solution Zap offers are endless. The Zap team sees the platform being put to real-world application by many industries like the finance industry, real estate, and shipping.
Insurance: The ZAP store’s data marketplace will provide insurance companies with an opportunity to provide self actuating insurance, that automatically pays customers eligible for a payout
Real estate: Companies may be able to gather important data such as real-time heat maps of specific areas, smart contracts are also able to automatically execute transfer of ownership, as well as rights, rules and regulations for rentals.
Shipping: Companies can benefit greatly from the implementation of smart contracts to track shipments, inventory and economic activity. The shipping industry is known for the sheer magnitude of data it produces, some of which is already been utilized by much of it goes to un analyzed. The shipping industry could monetize this data as an oracle to other to help better determine market trends.
DApps: Currently the only DApps that are available are those that operate only based on information on the blockchain. These DApps, while valuable in their own right, have not even begun to scratch the surface of what Ethereum, smart contracts, and DApps are capable of. In order to make DSpps and smart contracts capable of the feats that are outlined in the Ethereum whitepaper, there needs to be a method of making off-chain information usable by smart contracts. The Zap oracle marketplace is the solution.
Zap is like Ethereum, Chainlink and Uniswap combined, allowing for the tokenization of anything, including the oracles themselves, while offering decentralized, liquid markets.
The team is made up of more than 30 members and the founder is Nick Spanos who is also the founder of the the Bitcoin Center. Advisors include Dwayne Campbell of Goldman Sachs, Danny Zaterman of MIT and Alex Dziejma of Microsoft.
The future of Zap seems very strong. The team is working hard to build the most user-friendly platform possible, design a new website and an interface to make Zap platform more accessible and flexible, list the Zap token in more exchnages and finally form more partnerships.
The founder of Zap few months ago said:
With a new vision, we are working towards the imminent and inevitable future. Many of the goals we are going forward with our continued development, making the platform even more accessible, teaching developers how to quickly manifest their ideals and ideas using the Zap protocol, forcing even more use-cases into reality as the “killer app” makes its way to the surface. Ultimately, I think seeing this technology in action is the best way for people to understand it. We have some things lined up, like the real estate, which will put on display the power and place this protocol has in the future. At the same time, we are working to sharpen our documentation so as we continue to grab the attention of programmers, so they can seamlessly begin developing using our protocol.
Although there are competing projects like ChainLink, the Zap team has built a more efficient and superior platform with many more advantages and features. Oracles are a crucial part of the decentralized future and Zap with their revolutionary technology will certainly be in the front line.