What Is Charli3? A Cardano Decentralized Network 2022


What Is Charli3?

CHARLI3 is a decentralized oracle for the Cardano Network that is open-source and free to use. CHARLI3 is a platform that offers and validates data for blockchain applications.
It was primarily focused on blockchain economic values, but has now expanded its scope.

At CHARLI3 they believe in decentralization as well as open, safe, and efficient access to correct information for the general public. All of the contracts and updates will be made available to the general public. It is planned that CHARLI3 will use blockchain-based incentives to motivate node operators to validate data.

There are other services available on the Ethereum network that claim to be chain-independent. One source of worry is that parachain apps’ cross-platform accessibility and priority will most likely be surpassed by Ethereum-based applications in terms of importance. In addition to this, Ethereum suffers from significant scale and transaction cost concerns. In order to capture the ADA-based application market, a Cardano-native oracle service must be implemented. This solves all three of these difficulties at once. ADA is also well-known for having excellent metadata for the purpose of identification verification.

ADA-based apps, which are gaining popularity as decentralized identity grows in popularity, are at the forefront of addressing these concerns. Charli3’s interactions with the project teams have confirmed that they will choose a Cardanonative oracle solution over a traditional service.

What Is Charli3? A Cardano Decentralized Network 2022
Source: charli3

Oracle Security

Aside from the applications and benefits listed above, the initial focus of CHARLI3 will be on providing data for DeFi applications, which have enjoyed tremendous success on the Ethereum network but have stalled in 2021 due to high transaction fees and a lack of scalability due to the network’s inability to scale. Flash loans and price fluctuations have been used to target DeFi systems such as Compound, Yearn.Finance, and AAVE, allowing for market manipulation and manipulation of the stock market. However, although Ethereum makes use of redundant oracle services to avoid this, they are not necessarily attack-proof; it only takes one data breach for DeFi protocols to lose the faith of the general public.

The CHARLI3 protocol, which will be used by Cardano-based DeFi protocols that imitate these current applications, will guarantee that off-chain oracle services have built-in redundancy and cross-verification. CHARLI3 accomplishes this by holding data providers and node operators accountable through the use of staked tokens. It is planned to withdraw staked tokens from inaccuracy operators and transfer them to inaccuracy operators that are redundant external and internal consensus operators.

This will enable CHARLI3 to perform both the functions of an independently-insured oracle and the functions of an oracle aggregator. Because erroneous node operators will have a negative impact on their node reputation, the number of nodes that may be staked will diminish over time, in addition to the token fines that will be incurred.

How Charli 3 Works, Source: Charli3

After the use case for CHARLI3 on blockchain applications has been proven, the traditional banking sector will also be a market for the technology. The expanding number of conventional financial institutions, hedge funds, and centralized financial authorities that are adopting digital assets as a store of value is further facilitating this transformation. All of these funds will need the use of assured and reliable data sources.

Network Consensus

To provide access to a data request, node operators will stake tokens in the form of a data request. Larger requests/stakes will be made available to node operators that have been in the game for a long time and are well-known. Following the establishment of consensus and the provision of insurance, staked nodes are needed to finish data retrieval and verification operations. The reward tokens will be sent to the nodes only once these tasks have been completed.

Sources of Information

Primary data sources will be prioritized above secondary data sources and other oracle providers in the CHARLI3 platform’s data sources selection process. In addition to decentralized and centralized exchanges (the reputation of CEX is defined by the CHARLI3 community to prevent the use of false-volume transaction entities), well-established on-chain tools will be used as primary sources.

In exchange for connecting to nodes using the API, primary and secondary sources are compensated.
All data sources are reviewed across all nodes of all sources and weighted according to the stakes held by each node—greater stakes will already be linked with a better reputation—and weighted according to the stakes held by each source.

Secondary sources will also include additional oracle providers, enabling CHARLI3 to operate as an oracle aggregator by combining the data from several sources.As part of this, node operators who are not associated with a given request ticket will be held externally responsible for vetoing the finding.

This will allow any response that is associated with a 51 percent attack or data manipulation to be halted by third-parties who are present in the ecosystem.

In this way, numerous internal (alternative node operators) and external (alternative oracles aggregated) fail-safe methods may be implemented, which is innovative in the context of the Oracle design space.

At the end of the process, CHARLI3 will save the data once it has been validated and report it via charli3’s linked reverse oracle service (s). As part of a token subscription service, token holders will have access to the data that has been released.

Token Utility Model

It will also serve as an operator-based decentralized autonomous organization (DAO) for data consensus and community modifications, in addition to providing rewards. Larger stakes are related with ELO-based reputations and, as previously explained, assist in reaching agreement as well as future platform governance in a decentralized manner.

Unlike traditional reputation, under the ELO system, gamified reputation is not quantified in absolute terms, but is instead inferred through victories, losses, and draws versus other players. The ratings of their opponents, as well as the outcomes scored in comparison to their own, will determine their overall operator ranking. The ELO system guarantees that everyone is treated fairly and that everyone is held to account. Long-term integrity of the platform is therefore ensured as a result of this approach.

Architectural Overview

On-Chain Framework

The CHARLI3 smart contract’s interaction with client requests is accomplished by an on-chain contract, known as the CHARLI3-SC. The internal architecture of CHARLI3-SC is composed of three sub-contracts: (1) the aggregate contract, (2) the order-matching contract, and (3) the reputation contract. It is the responsibility of the aggregate contract to collect replies from external data sources and to calculate the final results of the CHARLI3 query. Organization of service agreements, indexing of parameters required, and gathering of bids from external data providers are all part of the ordermatching contract’s responsibilities.

The reputation contract keeps track of the performance of the third-party data providers that offer the data. Each of these three components may be customized to meet the specific requirements of the users. As a result, the on-chain procedure is composed of the following steps:

  1. Choosing an oracle
  2. Reporting data
  3. Analyzing the outcomes of the aggregate

Selecting an Oracle is an important step in every project

When a customer requests Oracle services, he or she gives parameters that are used to construct the service agreement proposal. This proposal will need to contain the parameters of the query as well as the number of oracles that the customer has requested from us.

The customer must also indicate the reputation level and aggregate smart contracts that will be utilized for the life of the agreement, in addition to any other requirements.

Long Term Strategy

CHARLI3’s long-term plan is based on three pillars, which are as follows:

  1. Confidentiality of oracle data
  2. dynamic infrastructural changes
  3. computation off-chain

Oracle confidentiality

Decentralized oracle networks were created with the goal of providing a high level of security against oracles that were not up to par. The oracle network strives to find the truth answer that is optimally chosen while taking Byzantine defects into account.

In this case, trustworthy hardware is the solution that is advised for securing the CHARLI3 networking infrastructure. However, due to the nature of being on a public blockchain, maintaining secrecy in a distributed oracle network is a challenging challenge to do. Once again, trustworthy hardware ensures high levels of secrecy in this situation.

Dynamic infrastructure

Oracles are now afflicted by the fact that external data sources do not provide digital signatures on their data exports, which causes oracles to fail to function properly. In the absence of a tamperproof digital signature, there is a need for an additional layer of trust that requires oracles to behave in good faith. In their opinion, a network capable of dynamic infrastructure adjustments is a promising solution to Oracle security. The team at CHARLI3 firmly feels this to be true.

Off-chain computation

In certain cases, oracles are necessary to fulfill roles other than data transmission, such as storing information. For example, oracles may be asked to validate credentials or log into databases in order to access information from the databases. In order to enable customers to request customized off-chain data processing, CHARLI3 was designed with a programming language.

On a long-term basis, they want to create an ecosystem in which oracles may play critical roles as off-chain compute resources, which are employed by the vast majority of smart contracts. The cultivation of a paradigm of privatized off-chain computing with a generalized availability, with results being fed into smart contracts, is charli3’s goal in achieving this vision.

As a result, they anticipate that by implementing a plan with high secrecy, infrastructure dynamism, and off-chain compute capabilities, CHARLI3 will be able to cut expenses while boosting data sensitivity and efficiency while decreasing prices.


The security of CHARLI3 as a decentralized entity is dependent on the strength and stability of its network.

It is critical that nodes work together and in line with their CHARLI3 mandates if they are to be successful. If it is determined that someone is behaving in bad faith, in charli3 it is necessary to discuss tactics to help enforce such conduct via the use of economic incentives or punitive measures if they are proven to be so acting.


What Is Charli3? A Cardano Decentralized Network 2022
Source: charli3

What about Staking?

A commonly-used type of involvement in blockchain technology today, staking in CHARLI3 entails participation via the nodal mechanism, which locks tokens as surrogates of participation through delegation of network ownership, as is the case with other blockchain technologies.

The manner through which CHARLI3’s staking protocol achieves consensus agreement is where it differs from other staking protocols. According to conventional permissionless blockchain technology, stake consensus agreement is obtained when a majority of nodes agree on the block data for a certain block.

As part of CHARLI3, participating network nodes will need to come to an agreement on the data that is not included inside the blockchain itself. Utilizing an external data-based interactive protocol,charli3 has developed a way for validator nodes to stake their claims on CHARLI3 tokens.

Charli3’s Roadmap

What Is Charli3? A Cardano Decentralized Network 2022
Source: Charli3

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