Chainlink acquires privacy oracle protocol DECO, paving the way for permissionless credit systems.

According to the report by blockchain media Coindesk, decentralized oracle provider Chainlink acquired privacy-preserving oracle solution DECO from Cornell University at an undisclosed price. This marks Chainlink's second acquisition following its announcement of acquiring Town Crier at the end of 2018.

Chainlink's Second Acquisition in History

DECO is a privacy oracle solution created by former Chief Scientist of RSA and other IC3 students and professors. With the acquisition of DECO by Chainlink, its creator Ari Juel has joined Chainlink Labs. Additionally, according to reports from Coindesk, Chainlink founders Sergey Nazarov and Ari Juel have started drafting the second Chainlink whitepaper (the original Chainlink whitepaper was written by them in 2017).

Chainlink is currently the top decentralized oracle project by market capitalization. The project aims to securely and trustworthily input data from off-chain sources into blockchain smart contracts. For example, Chainlink can provide price data from centralized exchanges to decentralized finance (DeFi) platforms to reduce the risk of attacks on DeFi platforms. However, Chainlink's applications have been mainly limited to price feeds for digital assets, and there are limitations when it comes to sensitive data such as user privacy.

DECO, on the other hand, is a protocol that securely inputs data into the blockchain while protecting user privacy. The project claims to achieve more secure network implementations using HTTPS/TLS message transmissions.

Sergey Nazarov, the founder of Chainlink, stated that DECO could be the foundation for future blockchain applications, such as permissionless credit or decentralized identity verification. He gave an example where DECO could extract data from the Department of Motor Vehicles (DMV) to prove that someone is over 18 years old without revealing their birthdate. This functionality could further be applied to decentralized finance to create permissionless credit systems. Sergey Nazarov said,

"Oracles like DECO may one day enable smart contracts to query off-chain credit data like bank records without involving personal data... DECO is a gateway for many real-world assets to enter DeFi."