Giulio Caldarelli

Giulio Caldarelli

As data is an essential asset for any DeFi application, selecting an oracle is a critical decision for its success. To date, academic research has mainly focused on improving oracle technology and internal economics, while the drivers of oracle choice on the client side remain largely unexplored. This study addresses this gap by gathering insights from leading DeFi protocols, uncovering their rationale for oracle selection and their preferences regarding whether to outsource or internalize data-request mechanisms. Data are collected from founders, C-level executives, and oracle engineers of 32 DeFi protocols, whose combined total value locked (TVL) exceeds 55% of the oracle-using DeFi segment. The study leverages a one-time mixed-method survey, using tailored question paths for in-house versus third-party oracle users. Quantitative answers are summarized, compared across groups, and examined through Spearman rank-order correlations to explore pairwise associations among evaluation dimensions, while open-ended responses are inductively coded into keywords and broader themes to triangulate common selection motives and switching challenges. Insights support the view that protocol choices are tied to technological dependencies, in which the immutability of smart contracts amplifies lock-in, hindering agile switching among data providers. Furthermore, when viable third-party solutions exist, protocols generally prefer to outsource rather than build and maintain internal oracle mechanisms.

Giulio Caldarelli, Massimiliano Ornaghi

The oracle problem refers to the inability of an agent to know if the information coming from an oracle is authentic and unbiased. In ancient times, philosophers and historians debated on how to evaluate, increase, and secure the reliability of oracle predictions, particularly those from Delphi, which pertained to matters of state. Today, we refer to data carriers for automatic machines as oracles, but establishing a secure channel between these oracles and the real world still represents a challenge. Despite numerous efforts, this problem remains mostly unsolved, and the recent advent of blockchain oracles has added a layer of complexity because of the decentralization of blockchains. This paper conceptually connects Delphic and modern blockchain oracles, developing a comparative framework. Leveraging blockchain oracle taxonomy, lexical analysis is also performed on 167 Delphic queries to shed light on the relationship between oracle answer quality and question type. The presented framework aims first at revealing commonalities between classical and computational oracles and then at enriching the oracle analysis within each field. This study contributes to the computer science literature by proposing strategies to improve the reliability of blockchain oracles based on insights from Delphi and to classical literature by introducing a framework that can also be applied to interpret and classify other ancient oracular mechanisms.

Giulio Caldarelli

The blockchain oracle problem, which refers to the challenge of injecting reliable external data into decentralized systems, remains a fundamental limitation to the development of trustless applications. While recent years have seen a proliferation of architectural, cryptographic, and economic strategies to mitigate this issue, no one has yet fully resolved the fundamental question of how a blockchain can gain knowledge about the off-chain world. In this position paper, we critically assess the role artificial intelligence (AI) can play in tackling the oracle problem. Drawing from both academic literature and practitioner implementations, we examine how AI techniques such as anomaly detection, language-based fact extraction, dynamic reputation modeling, and adversarial resistance can enhance oracle systems. We observe that while AI introduces powerful tools for improving data quality, source selection, and system resilience, it cannot eliminate the reliance on unverifiable off-chain inputs. Therefore, this study supports the idea that AI should be understood as a complementary layer of inference and filtering within a broader oracle design, not a substitute for trust assumptions.

Giulio Caldarelli

As known, blockchains are traditionally blind to the real world. This implies the reliance on third parties called oracles when extrinsic data is needed for smart contracts. However, reintroducing trust and single point of failure, oracles implementation is still controversial and debated. The blindness to the real world makes blockchains also unable to communicate with each other preventing any form of interoperability. An early approach to the interoperability issue is constituted by wrapped tokens, representing blockchain native tokens issued on a non-native blockchain. Similar to how oracles reintroduce trust, and single point of failure, the issuance of wrapped tokens involves third parties whose characteristics need to be considered when evaluating the advantages of crossing-chains. This paper provides an overview of the wrapped tokens and the main technologies implemented in their issuance. Advantages, as well as limitations, are also listed and discussed.