DIA Co-Founder Paul Claudius on providing transparent data oracles for the DeFI economy

With DIA, we are building a Wikipedia for financial data and information. The market for financial data, both in the cryptosphere as well as the traditional financial markets is characterised by a lack of transparency, steep costs and centralised provision. Only a handful of players dominate the markets. We think this can be done better for the whole of the community, which is why we founded DIA with the vision of breaking down these barriers to access. DIA is a platform that incentivises the crowd-driven provision and validation of financial data and information for the traditional and decentralised financial markets. DIa makes high-quality financial data open-source and accessible to everyone.

Yes, there are some great products on the market provided by projects including the likes of Chainlink and Band and others. However, being true believers of the benefits of decentralisation, we were not satisfied with the available approaches to the challenges we see. The central difference between existing projects to DIA is the approach to sourcing and validating data. Seeing the many data based attacks and glitches in the DeFi market and the enormous funds lost in their wake, we designed DIA as a fully open source platform. We are convinced that transparency is the only way to really ensure alignment towards the highest quality of data. This is why DIA provides a platform and infrastructure to incentivize the community to source and validate data.

In 2017 / 2018 we had a need for data feeds ourselves, while developing financial products and dApps. In this process, we were not easily able to find truly transparent data sources. This is when we started leveraging the power of the crowd to source data directly from public  sources like exchanges and APIs. We soon realised that this approach, combined with a crypto-economic incentive scheme solves challenges regarding trust and scalability that no other project currently does.

Existing feeds that match the requirements of a specific dApp or product can simply be connected. All the relevant information to do so is available via DIA’s documentation. For non-existing data sets, anyone can submit a data request ticket and fund it with DIA tokens. These are currently hosted on Gitcoin.com and are pushed to our developer and analyst community who can work on these, for instance by writing exchange API scrapers. Once they are publicly submitted to our Github, anyone can stake DIA tokens if they believe to have a better solution. The community then votes on the best solution and the bounty is rewarded to its author. In addition, our governance token can be used to submit and vote  on governance proposals. DIA is transitioning to a full DAO as we believe that this project should be community owned and driven.

We are currently heavily focussed on the rapidly growing DeFi space. As projects mature and the value locked in DeFi platforms grows, incentives for malicious behaviour grow and a reliable and auditable data layer becomes more and more crucial. We believe that it is imperative for the market and its actors to not only rely on single oracle providers. Plurality and competition not only increases the pressure to provide the best possible solutions, but drives innovation and reduces the risk of singular, centralised data provision. In addition, we see the same issues in traditional financial markets, where transparency is a scarce good and the stakes are even higher.

Yes and no. Hype phases always show similar characteristics and some of the recent, staggering growth numbers remind us of what happened three years ago. Similarly there are many meme projects popping up in the slipstream of successful projects. The fundamental difference we see is that there are many serious projects on the market developing sensible products and seeing significant traction. We are nowhere near the levels that we aim for, which is nothing short of matching traditional financial markets. This will take time and we expect to see more surges and dips in the future as jumps in development and maturity are made. We are optimistic that the essential building blocks of the ecosystem will be created. Patience and resilience are key.

This taps into the previous question. The community has become much more critical in our view. Projects with a thought-through product vision, a strong interdisciplinary team, real and proven application use cases as well as a clear and sensible vision for future development have a natural advantage. Transparency and communication is key. The brainless hype of seemingly random, buzzword filled whitepapers attached to websites with a slick design seems to be largely over. 

Our current focus lies on integrating DIA into the market, closing strong partnerships and continuing to improve our product and growing our community. One project we are particularly excited about is DIA Labs. Off the back of our recent success, we want to foster the development of building blocks that fill the gaps in the data ecosystem. We do this by backing teams and individuals with financial and operational support. More news about DIA Labs will be published in the near future on our communication channels.