On-Chain Oracle Protocols

Integration between On-Chain Protocols and Off-Chain Analytics

Bird.Money’s off-chain API feeds on-chain protocols with information about an ETH account address, its transaction history and related digital assets. This information then forms the basis for the BIRD Score, a proprietary credit risk prediction product.

The native Bird.Money Oracle is currently in development on the Kovan Test Network.

The Bird Analytics Oracle anonymously provides important information about loan applicants and users of decentralized lending platforms to reduce the risk of default to lenders. Users with the best borrowing history will ultimately see a reduction of the required collateral and greater access to funds.

We are increasing access to loans for DeFi users through the BIRD Score by analysing a user’s behaviour in order to provide access to loans tailored specifically to them.

Bird loans are designed to offer borrowers larger loan amounts without any extra collateral, all based on their transaction history and the BIRD Score rating from Bird.Money’s Off-chain Oracle Analytics.

The Oracle problem with Ethereum

Ethereum’s smart contracts are completely self-contained and any data or access to off-chain data is limited. For security purposes, this is necessary because execution in blockchains must be deterministic and the reaction to subsequent calls to outside APIs can change in unknown ways. Nevertheless, with additional outside data, some desirable forms of smart contracts are only feasible.

An Oracle is a conceptual solution that takes off-chain information from the real-world and submits an immutable copy of this information into blocks, making it open for future use of smart contracts.

Examples of real-world events that can affect on-chain loans and increase the chances of loan default include, but are not limited to the following:

  • Customer account activity
  • Payment history
  • Pandemic and other extrinsic factors
  • New government policies
Available information off-chain

Real-world events and user information available off-chain are utilised to improve the authenticity of borrowers and further mitigate the risks against loan defaults. Loan tracking information is parsed from Etherscan and analysed using The Graph API to obtain user interaction data from Compound, AAVE and other lending protocols.

Information such as transactions, loan repayments and DeFi interaction history could be analysed through the Etherscan API and inspected for defaults, liquidations and other imprudent behaviour as seen below.

Transaction history and Account forensics

Loan Tracker information provided by etherscan and using the graph api to analyse compound, aave and other loan offering protocol data about a customer.