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Oracles bridge blockchains with the real world. Without them, blockchains would be static ledgers with built-in logic unable to interact with external data. As the design space of decentralized applications (dApps) has grown, oracles have evolved to meet new demands. On-chain data has become more diverse and secure, while the time to put data on-chain has reduced by orders of magnitude, significantly reducing latency.
Pushing data on-chain began in 2012 and started unlocking a plethora of use cases beginning in 2017, accelerating during DeFi summer in 2020. Initially, oracles began with simple use cases, such as powering liquidation engines for lending protocols like Aave and Compound, but they continued to evolve. They started supporting automated investment vaults (Stake DAO), Collateralized Debt Position (CDP) protocols (MakerDAO), and eventually, Perpetual Futures Decentralized Exchanges (Perp DEXs) such as dYdX, GMX, Hyperliquid, Vertex, and Helix.
Decentralized Finance (DeFi) has long been positioned as an inevitable challenger to traditional finance (TradFi), particularly in trading, investing, and payments. To challenge TradFi and Web 2, crypto has relentlessly pursued faster transaction speeds and increased throughput. One thing is clear: to power finance, the most significant product-market fit crypto has found, we need robust, scalable infrastructure. Eventually, crypto is expected not only to replace TradFi and Web 2, but to improve them.
However, to fully realize its potential, crypto requires oracles that are not only secure but also agile, low-latency, and capable of supporting high transaction volumes. As the space matures and unlocks new use cases and financial primitives, we must rethink how we evaluate the impact and effectiveness of oracles. Not all oracles are created equal; they differ in how they secure capital, the speed at which they operate, and the volume of transactions they handle.
As oracles evolve to meet the growing demands of DeFi, accurately measuring their impact remains a challenge. While qualitative factors such as security, data reliability, and decentralization play a role, the industry has gravitated toward quantitative metrics to assess an oracle’s significance. Among these, the most widely used is Total Value Secured (TVS).
TVS = Sum of TVL of all protocols secured by an oracle.
TVS focuses on the amount of assets that an oracle secures across all the protocols using that oracle. For instance, if a lending protocol has $10 billion in collateral, it adds $10 billion to the TVS of the oracle used by the lending protocol. By summing up the total value locked (TVL) for each protocol using an oracle service, we arrive at that oracle’s TVS.
If protocols use an oracle to secure large amounts of value, the intuitive conclusion is that the oracle must be trusted and reliable, right?
While TVS seems like an obvious metric to measure the impact of oracles, it has proved insufficient by itself, as the industry has continued to innovate and mature. TVS fails to capture a key piece of the puzzle: the value provided by oracles when there is a lot of transactional throughput, even if the value being “secured” isn’t that high. For instance, some Perp DEXs may have extensive trading volume from a continuous number of positions opening and closing, but not necessarily a large static collateral pool.
TVS is certainly still very relevant for original DeFi protocols, such as lending protocols or investment-vault-type products, where a user is likely not transacting as frequently as with a Perp DEX. User funds typically remain in a smart contract for extended periods, resulting in a substantial, static capital base. In other words, TVS is a metric relevant to more static DeFi protocols and cannot capture the frenetic pace at which Perp DEXs secure transactions themselves. At such venues, the transaction volumes generally dwarf the capital base in question, and each transaction requires an oracle to provide low-latency data for high-frequency transactions.
As DeFi protocols evolved, it became clear that TVS was only part of the story. TVS’ pitfalls are listed below.
TVS is a snapshot of the value secured by an oracle; in other words, it measures how much capital could be at risk if an oracle malfunctions or is compromised. This was a meaningful way to think about oracles at the infancy of DeFi, when protocols relied on a single oracle source and oracle failure posed a systemic risk.
Today, however, many protocols utilize multiple oracles, and oracles draw from various sources of data to avoid this very scenario. It overlooks how often an oracle’s data is called upon to facilitate transactions over time, and how oracles generate revenue or justify integration fees.
A significant portion of DeFi activity today occurs through DEXs that offer perpetual swaps, also known as Perps. As on-chain derivatives activity rises at an exponential pace, a massive transaction volume is flowing through Perp DEXs. The amount of value locked is generally small compared to the sheer volume of transactions. TVS does not capture that intense activity.
TVS does not capture the intensity of Oracle usage in these environments. A Perp DEX might facilitate billions in daily trading volume, relying on rapid, low-latency price updates, yet contribute relatively little to an oracle’s TVS because of its smaller collateral pool.
Relying solely on TVS to gauge oracle “dominance” can misrepresent actual usage. A protocol with modest TVL but extremely high daily trading volume can contribute significantly to an oracle’s usage in practice, more so than a protocol with extensive locked collateral but few transactions.
For instance, if a lending protocol has $1 billion in TVL and a Perp DEX has $50 million in TVL, the lending protocol may only process hundreds of transactions per day, whereas the Perp DEX may process millions of transactions. TVS fails to capture this demand for an oracle’s price data.
If TVS is the visible tip of an iceberg, TTV represents the massive, dynamic underwater portion, the hidden activity that truly drives value.
While TVS stays relevant in the context of static OG DeFi protocols, it unfortunately cannot capture the value oracles provide to the dynamic, fast-paced protocols of today. In a fast-paced DeFi landscape, a more accurate metric is needed—one that reflects how often and how intensely an oracle is utilized.
To capture the value provided by oracles to such protocols, Total Transaction Volume (TTV) is a better solution. Total Transaction Volume (TTV) addresses this gap by measuring the cumulative transaction volume facilitated by an oracle over a specific period.
TTV sums up all the value of all transactions facilitated by an oracle.
By tracking TTV, protocols, and stakeholders can gain deeper insights into real oracle usage, revenue potential, and technical capabilities.
TTV tracks the frequency and the intensity with which a protocol’s participants rely on the oracle service underpinning the protocol’s products. If $500M is traded daily on a perp DEX, the oracle secures $500M of daily activity, not just a one-time collateral snapshot. This activity can be captured using TTV. This better reflects an oracle’s actual role in securing economic activity.
Many oracles collect fees per update or have subscription models based on usage frequency. A protocol that makes thousands of price calls per day represents a larger revenue driver than one with a high static TVL but fewer updates. Thus, TTV also reflects market share in the oracle industry better than just using TVS can.
Speed, throughput, and real-time data are now at the center of DeFi activity. TTV aligns directly with these next-generation demands, showing which oracles can handle:
Stork’s oracles, for instance, specialize in offering sub-second low-latency data feeds for all kinds of assets, including long-tail assets. Stork tends to provide such products more quickly than the competition, thus keeping up with the intense pace of trading by retail and algorithmic/institutional players, while also bringing products to market rapidly, vetting the market's appetite for trading new assets being created at a breakneck pace.
Unfortunately, despite its advantages, TTV is significantly more challenging to measure accurately.
However, approximate TTV estimates can still provide valuable insights into oracle usage. By leveraging public trading volume data from Perp DEXs, we can estimate TTV figures and give a more accurate representation of oracle dominance.
The Total Value Secured metric has not kept pace with the fast-evolving DeFi landscape. The static TVS is no longer sufficient to measure an oracle’s impact and may be misleading, skewing results towards oracles that secure lending protocols or invest in vault-type products. While TVS remains a valid consideration, especially for gauging worst-case security risks, it fails to reflect the increasingly dynamic and high-throughput realities of modern DeFi.
TTV is a more holistic metric than TVS because it reflects the actual demand for price updates from an oracle. In contrast, TVS only reflects the amount of assets committed to a smart contract that uses a particular oracle. TVS, unfortunately, does not accurately represent the real-world demand from the market, as the demand for price updates varies across different DeFi protocols, depending on the type of protocol.
If TVS is a snapshot, TTV is a live stream.
TTV also highlights the competitive advantages of highly capable oracles. Lifinity, an automated liquidity provision protocol on Solana, offers orders of magnitude better yields to its users than standard Liquidity Pools by building a custom oracle used to rebalance automated market maker (AMM) pools. While the TVL of Lifinity is modest compared to other protocols, its active yield management strategy yields a very high TTV, all powered by its custom in-house oracle. Hyperliquid, a perp DEX, can offer a trading experience on par or even better than a centralized exchange, in part due to its excellent custom oracle feeds that go live almost instantly after an asset is launched. Stork’s TTV, for 30 days, is 136 times higher than its TVS because Stork has a competitive advantage in low-latency oracles, which are combined from on-chain and off-chain oracles. Industry giants like Chainlink and Pyth soon followed suit with similar products, “Data Streams” and “Pythnet” respectively.
As the industry matures and continues to move toward speed, throughput, and scalability to enhance the user experience, TTV provides a better lens to gauge an oracle's impact on the industry. To achieve the goal of replacing TradFi and improving it, TTV is undoubtedly a critical metric. If the world is to move to a chain, and entities like NASDAQ and Visa are to be subsumed by crypto, TTV is the metric to pay attention to.
As highlighted above, a significant amount of DeFi activity is driven by increased innovation and capabilities in oracle infrastructure. Additionally, these changes in oracle infrastructure also facilitate innovation and the creation of new primitives, helping DeFi accelerate beyond TradFi in terms of feature set.
