What Is ZK-Oracle?
Also known as: zkOracle, Zero-Knowledge Oracle, ZK Oracle
In short
A ZK-Oracle (zkOracle) is an oracle design that backs the correctness of the data it relays to smart contracts, or of the computation it performs, with zero-knowledge proofs. It aims to reduce the need to blindly trust the data provider and, when needed, to keep sensitive information private.
In classic oracles, the smart contract assumes that the nodes relaying the data behave honestly; security generally rests on many independent nodes reporting the same data and on economic incentives. In the ZK-Oracle approach, the oracle produces a zero-knowledge proof along with the data. This proof can show, for example, that the data was really obtained from a particular website over an encrypted TLS connection, or that a particular computation over historical blockchain data was done correctly.
Two main use cases stand out. The first is proving the source of data on the web: a user can prove that their bank balance is above a certain amount without revealing the balance itself. The DECO research that Chainlink brought into its fold is an example of work in this area. The second is processing historical on-chain data: historical transaction data that would be very expensive for a smart contract to read directly is processed off-chain and the result is presented with a proof; such systems are also referred to as ZK coprocessors.
The concept is relatively new and has no single standard definition. Proof generation is computationally costly. In addition, although a ZK proof shows that the data was correctly retrieved from the source, it does not guarantee that the source itself provided correct information.
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