Middleware track sorting

Middleware Overview

Middleware refers to an important part that plays a role in connecting, enhancing and supplementing functions in the Web3.0 technology stack. They play the role of bridge, connecting the world of blockchain technology and applications. **Middleware provides a more friendly and efficient way for developers and users to interact with distributed applications and blockchains, and also solves some technical challenges in a decentralized environment. **

This track covers a variety of key technologies, including Cross-chain Bridge, Oracle Machine, Gateway API Protocol and Data Analysis Protocol, etc..

Cross-chain bridge is one of the important components of Web3 middleware, which solves the interoperability problem between different blockchain networks. Through the cross-chain bridge, users can transfer assets from one blockchain network to another to realize cross-chain interaction.

Oracle machine is another key middleware technology, they serve as a bridge connecting smart contracts and external data sources, enabling smart contracts to obtain and use data from the real world.

Gateway API Protocol provides a standardized interface that enables applications to communicate and interact with different blockchain networks.

Data Analysis Protocol is committed to providing tools and services for collecting, analyzing and visualizing data on the blockchain to help users better understand and utilize blockchain data.

The Middleware track has grown significantly over the past few years. With the popularity and application of blockchain technology increasing, middleware technology has become the key to realizing decentralized applications, providing a solid foundation and technical support for the development of blockchain applications. However, it should be noted that with the continuous evolution and innovation of technology, the middleware track is still in a stage of rapid development. New middleware technologies and protocols are constantly emerging, providing users and developers with more choices and possibilities. At the same time, the security and stability of middleware is also an issue that needs to be focused on during the development process to ensure that users' assets and data are fully protected. ** In the future, with the further maturity of blockchain technology and the popularization of applications, the middleware track will continue to develop, providing more complete support and tools for the ecosystem of decentralized applications. **

Middleware subdivision track combing

Table of contents:

2.1 Cross-chain bridge

2.2 Oracle

2.3 Gateway API

2.4 Data Analysis Protocol

2.1

Cross-Chain Bridge

2.1.1 Overview of cross-chain bridge

Bridges are needed between blockchain networks, which enable the connection and interoperability between blockchains. Blockchains are isolated from each other, which means that blockchains cannot naturally transact and communicate with other blockchains. Thus, while there may be significant activity and innovation within an ecosystem, it is limited by a lack of connectivity and interoperability with other ecosystems. Bridges provide a way for siled blockchain environments to connect to each other. They establish a transport route between blockchains where tokens, messages, arbitrary data, and even smart contract calls can be transferred from one chain to another.

2.1.2 Track analysis of cross-chain bridges

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2.1.3****Case Study: Layer Zero

Introduction

LayerZero is an infrastructure protocol that solves cross-chain communication and transmission problems between multiple chains. It proposes an innovative concept of "full-chain interoperability". By deploying ultra-light nodes, using oracles and relay layers to complete communication and Transport, designed to connect decentralized applications across multiple blockchains. Based on the LayerZero protocol, LayerZero Labs has developed a cross-chain protocol product Stargate to replace the existing and often stolen cross-chain bridge projects, and solve the triangular problem, that is, to achieve unified circulation and instant guarantee of finality at the same time and the originality of assets.

Featured Product Performance: Stargate

LayerZero Labs launched its research and development product Stargate, which is a cross-chain equivalent currency exchange project similar to Curve or Saber designed for DEX. **

Stargate is a full-chain cross-chain bridge built on the LayerZero protocol to replace the existing and often stolen cross-chain bridge products. It mainly focuses on asset cross-chains of USDC, USDT and ETH, and has now opened up The cross-chain of stablecoins between Ethereum, Binance Smart Chain, Avalanche, Matic, Arbitrum, Optimism, and Fantom will support non-EVM chains such as Solana, Terra, Cosmos Hub, and Osmosis in the future. Lock and mint synthetic assets without the need to create paired pools of decentralized liquidity. The asset transfer of the protocol can use native asset tokens. After having the two dimensions of unified liquidity and native asset pool, Stargate introduces a set of resource balance algorithm Delta to improve the utilization rate of funds and provide instant finality guarantee. In essence, it is similar to a set of incentive reward and punishment mechanism, which encourages arbitrageurs to replenish the insufficient liquidity pool, utilizes the liquidity of single-currency assets on each chain as a complete liquidity pool, and tries to avoid single-chain depletion.

Any DEX can use the Stargate protocol to perform cross-chain transactions and bridges in a single transaction on the source chain, creating greater capital efficiency. Using this solution, the DEX does not need to change the existing protocol and can be directly integrated into the user interface.

Existing features in Stargate

• Transfer: Through Stargate, users and dapps can transfer native assets across chains, and at the same time access the unified liquidity pool of the protocol, which guarantees finality instantly.
• Liquidity Pool: Add liquidity to the Omnichain protocol and earn stablecoin rewards for every Stargate transfer.
• Mining: Liquidity providers can also mine their LP tokens for STG token rewards.
• Staking: STG holders can lock up their STG tokens to receive Stargate's governance token veSTG. The longer users hold STG tokens, the more veSTG they receive.

Stargate Advantages:

• Good user experience, fast speed, and low cost: Stargate allows bridging between native assets, reducing the number of intermediate operations, and eliminating the steps for users to exchange synthetic assets and additional Gas on the target chain. Currently, more than 95% of bridge operations will be performed and driven by applications rather than users. Applications will integrate 15 custom operations to operate multiple wallets to change and consume different amounts of Gas assets.
• Simplified cross-chain integration steps for other protocols: Prior to LayerZero, implementing any cross-chain integration was time-consuming and technically complex. The biggest risk in most applications at present is that a fraudulent cross-chain information can exhaust all liquidity, hindering the process of implementing cross-chain integration for many protocols. LayerZero solves these problems. It makes the integration simple. It does not need to change the existing protocol, nor does it need to control the risk of the liquidity pool of the protocol itself. All risks are borne by Stargate itself.
• Native assets reduce the risk of being attacked: Native assets are based on the original chain, generally there are many nodes running, and the block height is high, so it is difficult for hackers to break through. Bryan Pellegrino of LayerZero Labs said in an interview: "Compared to traditional cross-chain bridges, native assets will reduce the attack surface by orders of magnitude, and provide a desirable user experience at the application and consumer levels."

Fundraising & Team Background

• Fundraising Status

• LayerZero Labs is in financing talks at a $3 billion valuation. FTX Ventures has committed to lead the round, but it's unclear if other investors have agreed to participate. The latest financing will be denominated in equity, LayerZero token warrants, and the native token of cross-chain bridging protocol Stargate. The new funds will be used to grow and expand the development team.
• On March 30, 2022, LayerZero Labs announced a $13.5M Series A+ funding round at a $1B valuation, led by A16Z, FTX Ventures, and Sequoia Capital, with Coinbase Ventures, PayPal Ventures, Polygon, Tiger Global, and Dapper Labs Participate in voting.
• LayerZero Labs received a $6 million Series A financing led by Binance and Multicoin Capital in September 2021. Other participating investors include Sino Global Capital, Defiance, Delphi Digital, Robot Ventures, Spartan, Hypersphere Ventures, Protocol Ventures , Gen Block Capital and Echelon Capital. In April 2021, LayerZero Labs raised $2 million in seed round funding.

• Team

• LayerZero has been established for more than two years. The team has three co-founders. They are all computer science alumni with undergraduate degrees and have many years of experience in co-founding companies. The current team has more than 20 people.
• Bryan Pellegrino Co-Founder & CEO: Serial entrepreneur (Rho AI, Open Token, Coder Den), former machine learning algorithm engineer.
• Ryan Zarick Co-Founder & CTO: Serial entrepreneur (Minimal AI, 80Trill, Coder Den), former development engineer.
• Co-founder of Caleb Banister: serial entrepreneur (Minimal AI, 80Trill, Coder Den), former software development engineer.
• Ari Litan COO: He worked in Morgan Stanley for more than five years as a VP, worked as a product leader in several projects, and also had entrepreneurial experience.
• Other team members are mainly responsible for development and research work.

Advantages and Disadvantages

• advantage

• **Scalability is a thorny problem faced by blockchain-based cross-chain solutions, but LayerZero overcomes the problem of scalability. **LayerZero can be applied to data verification, setting personal reward structures, digital currency packaging, etc. . LayerZero is the root layer, capable of cross-chain interoperability with Layer 1 protocols such as BTC, ADA, and ETH. Operators can use LayerZero to deploy relay networks on multiple nodes (such as Bitcoin and Ethereum). LayerZero provides a unique solution to the scalability problem of the blockchain ecosystem without patching the underlying protocols of the existing blockchain network.
• **Through competition analysis, we can find that LayerZreo's mechanism can reduce computing costs while ensuring high security, and realize multi-chain and multi-currency asset and information cross-chain transmission with an innovative technical framework, ensuring A certain degree of scalability has advantages in terms of technology and future development potential. **

• Risk

• The reason why LayerZero faces intense competition is that the full-chain or multi-chain market is huge (the cake is huge), and many projects have made a lot of efforts and attempts in this field, and the current technical barriers are moderate (only EVM-compatible chains are connected, Try non-EVM compatible chains in the future)

Prospects

LayerZero wants to help decentralized applications (DApps) build tools that can run across multiple blockchains. There are a wide range of future application scenarios, such as lending, future wallets, full-chain NFTs, and general message transmission. **In the future, the LayerZero protocol can provide general information relay services and support various new workflows. **

LayerZero is not an ordinary cross-chain bridge project, but a lower-level infrastructure-level protocol than Layer1. Different from Cosmos' IBC standard internal cross-chain, **LayerZero is aimed at all L1 and L2, and has stronger versatility. **Aptos is valued at 2.75 billion, while LayerZero is valued at 3 billion. In the development of the multi-chain pattern in the future, the long-term value of this track is reflected in: supporting the free, safe and fast transmission and transfer of all smart contracts, assets and status information in the encrypted world, and improving the unified liquidity of assets and information , to empower existing smart contracts and provide broader application scenarios for the future, enhance the scalability of the encrypted world, and help the encrypted world develop to the next order of magnitude.

2.2

Oracle

2.2.1 Oracle Overview

Oracle machine is a very important function in the development process of the blockchain, but it cannot be used as the name suggests. It is not a tool to predict the future, but a tool to capture external information, like a real world And the connector of the world on the chain. That is, the tool for writing information outside the blockchain into the blockchain is generally called an Oracle Mechanism.

The oracle machine is a real and credible data source (or tool), which can capture, review, summarize and pass the information required by the smart contract to the smart contract, so the smart contract does not need to directly access information outside its network, and can update Fast execution, and the accuracy is more guaranteed.

2.2.2 Oracle track analysis

**In simple terms, oracle machines can be divided into centralized oracle machines and decentralized oracle machines:

• Centralized oracle machine is somewhat similar to the Internet, in essence it is more like a data providing platform, and the data is directly provided to the smart contract. **The credibility of the data depends entirely on the credibility of the platform, and there is a risk of doing evil, but because no node verification is required, the efficiency is greatly improved and the cost is reduced. **This type is mostly a single centralized institution, such as: banks, enterprises with large-scale credible background endorsements such as state-owned enterprises, etc.
• Decentralized oracle machine is more like the data service ecology of the blockchain. The data is reviewed and provided by many nodes. When the data diverges, the data with the most votes will be selected. **Although it can reduce the risk of individual data fraud and evil, the privacy and timeliness of data are difficult problems, and it is difficult to operate as efficiently as centralized ones at the current stage.

At present, there are many oracle projects in the market, such as ChainLink, Oraclize, Themis, DOS Network, OracleChain, etc. are all mainstream oracle projects in the market. **The current mainstream trend is the decentralized oracle. **Chainlink is the leader of the decentralized oracle track, and as the infrastructure of the DEFI world, other projects in the track are basically only comparable. As shown in the figure below, the total amount of BAND, API3, OCEAN, etc. is only a fraction of that of Chainlink.

2.2.3 Case Study - Chainlink

Introduction

**Chainlink is the first decentralized oracle in the blockchain field, **construct a decentralized oracle node network to provide trusted data sources for smart contracts, capture correct external data, offline payments and any other API functions .

Core functions

The core functions of Chainlink are divided into: **on-chain and off-chain. **The on-chain architecture mainly processes user data requests; the off-chain architecture is responsible for processing external data collection and processing the received data through Chainlink Core.

• On-Chain Architecture: When a Chainlink user wants to obtain data, he first submits a request to the Chainlink network, and Chainlink will process these requests into a smart contract, which is combined with the existing Oracle node, and the contract that assists in the combination is shared Three types: Reputation Contract, Order-matching Contract and Aggregating Contract
• **Off-chain architecture: **The nodes of the off-chain architecture are linked to Ethereum, which mainly handles the collection of external data, and provides the received data to users through Chainlink Core. Chainlink Core is the program of Chainlink's off-chain architecture, which is responsible for processing data and passing it to the Oracle on the chain

product description

• Market Data and Data Feeds

• Capturing reliable real-world data, including capturing information such as financial market prices, exchange rates, lending rates, and indices, etc., can achieve accurate price feeds for DeFi. A common use case is the price anchoring of digital stablecoins and fiat currencies;

• VRF random number

• Provide blockchain applications with secure random numbers based on encryption technology, and use encryption proof mechanisms to generate verifiable random numbers. Because no third party can tamper or manipulate the claimed random number, it can provide verifiable random numbers for Gamefi and NFT projects to make rare NFTs;

• Keepers

• Automate the execution of smart contracts to ensure the decentralization level, cost and security of contracts. Automatic execution of indicators based on time, schedule, calculation results, oracles, on-chain activity, or block numbers.
• At the same time, efficiently carry out off-chain computing functions for smart contracts, which can help developers create DApps with richer functions in a more cost-effective way;

• Reserve Certificate

• Automated auditing of project reserves and monitoring the movement of reserve assets in order to improve transparency and prevent systemic failures in DeFi. At the same time, this function is resistant to risks such as Sybil attacks and against intermediary or access denial attacks.

• Cross-chain Interoperability Protocol (CCIP)

• This protocol provides developers with a cross-chain message transport layer and a programmable token bridge, which will allow developers to create message sending and token transfer across different networks, so as to easily and safely participate in the multi-chain ecosystem.

Fundraising & Team Background

• Team

• Serge Nazarov (Founder): Dedicated himself to the blockchain field in 2011. He was a partner of QED Capital in Russia and founded Secure Asset Exchange, CryptoMail, a decentralized email service, and SmartContract, a smart contract company. . Founded the company SmartContract in San Francisco, and started a new decentralized oracle project Chainlink, which raised $32 million in September 2017.
• Steve Ellis (CTO): Formerly a software engineer and team lead at Pivotal Labs, where he worked on securing sensitive HIPAA compliant data and building scalable payment automation software.

• Fundraising

• In June 2017, SmartContract, a San Francisco Financial Technology Bureau company, launched Chainlink; on September 9, 2017, ChainLink raised $32 million in financing;

Advantages and Disadvantages

• advantage

• Decentralization: Chainlink technology decentralizes oracles, and decentralized oracles can solve the problem of wrong data sources. Chainlink uses decentralized oracle technology to pave the way for bridging blockchain networks and non-blockchain networks, allowing both parties to The transmission is unimpeded, and the correct data is given. Simply put, Chainlink allows the smart contract to capture the verified source data of the real world into the smart contract of the blockchain.
• High compatibility: Chainlink will aim to provide reliable and tamper-proof input and output data for smart contracts in any blockchain. Since Chainlink needs to be compatible with Ethereum, Bitcoin and Hyperledger, every Chainlink system Each part is upgradeable, and different components can be replaced when better technology becomes available.

• shortcoming

• Security issues: If the oracle machine is hacked, the data will be wrong or invalid, and the output data is likely to be controlled by hackers. Since the blockchain itself cannot verify the authenticity of the off-chain data provided by the oracle machine, the blockchain Blockchain transactions are often irreversible. This may cause the smart contract to execute the agreement based on wrong data, causing losses to a certain party, and it is difficult to trace back the losses that have occurred.

2.3

Gateway API

2.3.1 API Overview

For developers, blockchain technology is a complex and ever-changing ecosystem. **The high technical threshold, low development efficiency, and data island phenomenon in the blockchain field are still a huge challenge. **In order to solve these problems, Blockchain API came into being as the times require, becoming a bridge connecting the traditional Internet world and the decentralized world, and promoting the overall development of blockchain ecology.

**Blockchain API is a set of predefined interfaces, protocols, and tools that make it easier for developers to interact with blockchain networks. **By using the blockchain API, developers can integrate blockchain functions in their own applications, such as sending and receiving cryptocurrencies, querying transaction history, deploying and calling smart contracts, etc. The blockchain API abstracts the complexity of the underlying technology, enabling developers to develop applications based on blockchain technology without knowing the underlying implementation details. This greatly simplifies the development process of blockchain applications, lowers the development threshold, and promotes the emergence of more innovative applications. Each blockchain platform usually provides its own API interface, for example, Bitcoin provides an RPC interface, and Ethereum provides a JSON-RPC interface. In addition, there are some third-party service providers that provide cross-chain API services, such as Infura and QuickNode, etc. These services further simplify the development and maintenance of blockchain applications.

Key Benefits of Blockchain API:

• High data access and query efficiency: Traditional blockchain data queries are usually complex and require a lot of time and effort to obtain the required information. The blockchain API provides a concise and intuitive interface, which greatly improves the efficiency of data access and query.
• Low barriers to application development: In the absence of a blockchain API, developers need to have a deep understanding of the underlying blockchain technology and the implementation details of various smart contracts, which is a huge challenge. Blockchain API simplifies the application development process and lowers the development threshold.
• Strong application interoperability: Blockchain API provides a unified data interface for decentralized applications (DApps), enabling interoperability between applications.
• Good scalability and maintainability: Blockchain API provides a modular and extensible solution, making it easier for developers to cope with changes in underlying data structures and technologies, and improving the maintainability of applications .

Since the birth of Bitcoin, the application of API has mainly focused on supporting basic Bitcoin transaction and query functions. Developers need to interact with the Bitcoin network through the RPC (Remote Procedure Call) interface provided by the Bitcoin core software.

In 2013, Vitalik Buterin released the white paper of Ethereum, and smart contract technology gradually became the focus of the blockchain field. Ethereum provides developers with a JSON-RPC interface, enabling developers to create decentralized applications (DApps) by writing smart contracts. APIs are heavily used to support the deployment, invocation, and query functions of smart contracts.

With the rise of DApp, decentralized API solutions have begun to receive attention. In addition, with the popularization of the Web3 concept, the blockchain API has gradually become a bridge connecting the decentralized world and the traditional Internet world.

**The development of the blockchain API has experienced the evolution from supporting basic transaction functions to supporting smart contracts, and then to decentralized APIs, gradually supporting the development of the entire Web3 ecosystem. **

2.3.2 API track analysis

With the development of the market, there are already many network management API protocol projects, such as Alchemy, QuickNode, Infura, etc. These projects overlap in functionality and product positioning, but also have significant differences. For example, Alchemy and Infura provide comprehensive blockchain infrastructure services, while QuickNode focuses on providing premium node access services.

| Project | Function | Product Positioning | Investor | | --- | --- | --- | --- | | Alchemy | Provide comprehensive blockchain infrastructure services, including API, nodes, monitoring and analysis, etc. | Aim to become a one-stop blockchain infrastructure solution for developers, helping developers more efficiently Build and run decentralized applications | Coinbase, Samsung, Addition VC, Stanford University, etc. | | QuickNode | Provide developers with high-performance, scalable full-node API access services | Focus on providing developers with high-quality node access services to improve the performance and availability of decentralized applications | Y Combinator, SoftBank, Tiger Global, Seven Seven Six, etc. | | Infura | Provides Ethereum and IPFS infrastructure services, including API, nodes and storage, etc. | As part of ConsenSys, Infura aims to simplify the development process of Ethereum and IPFS applications, providing developers with reliable and secure Infrastructure Services | ConsenSys (parent company) |

2.3.3 Case Study - QuickNode

Introduction

QuickNode is a project that provides high-performance, scalable full-node API access services. It is dedicated to improving the performance and usability of decentralized applications, while simplifying the challenges developers face when building and deploying blockchain applications. The goal of the project is to provide developers with a reliable and efficient full-node API service so that they can build and deploy blockchain applications more easily. QuickNode supports a variety of blockchain platforms, including Ethereum, Bitcoin, Binance Smart Chain, Polygon, etc., to facilitate one-stop access for developers.

product

QuickNode product features include:

• Provide high-speed and reliable API access services to ensure fast and stable DApp data access.
• Support multiple blockchain platforms, including Ethereum, Bitcoin, Binance Smart Chain, Polygon, Avalanche, etc., to facilitate one-stop access for developers.
• Provide real-time blockchain data monitoring and analysis to help developers understand application performance and optimization directions.
• Provide integrated support for libraries such as Web3.js and Ethers.js, simplifying the developer's access process.
• Provide strong technical support and high-quality customer service to help customers solve problems encountered during access and use.

QuickNode provides stable API services for several well-known projects, including:

• Dune Analytics: A platform that provides data and analysis of the cryptocurrency industry, widely used by project parties, investors and research institutions. With the API service provided by QuickNode, Dune Analytics can quickly access and analyze blockchain data, providing users with real-time market information and trend analysis.
• Chainalysis: A well-known blockchain analysis and anti-money laundering (AML) solution provider, relying on QuickNode's API service to obtain transaction data on various blockchain platforms, providing accurate transaction monitoring and Risk Assessment Services.
• Algofi: A decentralized lending market based on Algorand, using the high-performance API service provided by QuickNode to ensure the stability and efficiency of its platform data access, thus providing users with a smooth lending experience.

Fundraising & Team

In terms of fundraising and team background, the QuickNode team has a wealth of technical background and business experience. Team members include Alexander Nabutovsky, Auston Bunsen, Dmitry Shklovsky, and Manuel Kreutz. They have expertise in blockchain, network infrastructure, and enterprise-level software. Many years of working experience. In addition, QuickNode has also received support from several well-known investors, including SoftBank, SB Opportunity Fund, Seven Seven Six, Tiger Global Management, Y Combinator, etc.

Prospects

QuickNode can provide high-performance and reliable API access services, solve the problem of DApp data access speed and stability, support multiple mainstream blockchain platforms, facilitate developers' one-stop access and cross-chain application development, and provide real-time Data monitoring and analysis to help developers optimize application performance. However, due to the high cost of providing high-performance API services, the price of QuickNode is relatively high, which may not be suitable for start-up projects or developers with limited budgets. Although QuickNode supports multiple blockchain platforms, there are still more public chains that have not yet been implemented. Coverage may limit its application in some specific scenarios.

2.4

Data Analysis Protocol

2.4.1 Data Analysis Protocol Overview

**The data analysis protocol is one of the key technologies in the Web3.0 middleware track. **It solves the problem of acquiring, processing and analyzing data in the blockchain environment. In the traditional Internet environment, data analysis is an important means for enterprises and organizations to obtain insight and decision support. In the Web 2.0 world, data mainly comes from centralized data sources, such as traditional websites, applications, and social media platforms. These platforms collect user data and store it on their own servers. In the blockchain world, due to the decentralized and decentralized nature of data, data analysis faces some unique challenges.

| | Web2.0 Data Analysis | Web3.0 Data Analysis | | --- | --- | --- | | Data Sources & Nature| * Mainly rely on centralized data sources, such as traditional websites, applications and social media platforms. These platforms collect user data and store it on their own servers.

• The nature of the data is usually structured and semi-structured, suitable for traditional relational databases and data analysis tools. | * Based on blockchain technology, data is collected and stored through smart contracts and decentralized applications (DApps). These data are usually public, transparent and immutable. *The nature of these data may be more diverse and complex, requiring special tools and techniques for processing and analysis. | | Privacy and Ownership| * User data is usually collected and controlled by a centralized platform, and users often do not have full control over the use and sharing of data. | * Users have more control over their data and decide whether to share it with others. | | Data Analysis Tools and Techniques | * Use traditional data analysis tools and techniques such as relational databases, SQL queries, and data mining algorithms.
• These tools and techniques are suitable for processing structured and semi-structured data, and provide various analysis functions and visualization methods. | * Use specialized tools and techniques for blockchain and encrypted data. For example, the analysis of smart contracts requires an understanding of the blockchain programming language and the execution logic of smart contracts.
• Due to the particularity of blockchain data, such as the non-tamperable and decentralized features of data on the chain, specific data processing and privacy protection methods need to be considered. |

The data analysis protocol aims to provide tools and services for collecting, cleaning, integrating, analyzing and visualizing data on the blockchain to help users better understand and utilize blockchain data.

2.4.2 Data Analysis Protocol Track Analysis

| Project | Introduction | Main Functions | Data Types | Token Economic Model | | --- | --- | --- | --- | --- | | The Graph | Decentralized data indexing and query protocol | Provide efficient blockchain data query services | Blockchain data | GRT | | Ocean Protocol | Open data market protocol | Connect data providers and consumers, provide credible data transaction services | Various types of data | OCEAN | | Santi-ment | Cryptocurrency market data analysis protocol | Provide market data analysis and sentiment analysis services | Cryptocurrency market data | SAN | | Dune Analytics | Decentralized data analysis platform | Customize query and analysis of blockchain data, create and share data dashboards | Blockchain data | N/A | | 0xScope | Cryptocurrency trading analysis tools | Provide real-time market data, technical analysis tools and quantitative analysis functions | Cryptocurrency market data | N/A | | Covalent | Multi-chain blockchain data query and analysis protocol | Provide multi-chain blockchain data query and analysis services | Blockchain data | CQT |

2.4.3 Case Study: 0xScope

Introduction

0xScope is an innovative data analysis protocol project and the first Web3.0 knowledge map protocol, aiming to provide efficient and reliable data analysis solutions for the blockchain industry. By collecting, integrating and analyzing Web2 and Web3 data, 0xScope helps users reveal trends and patterns of blockchain networks, providing users with valuable insights and decision support.

The current Web3.0 data analysis protocols and products are still in the early stages, so there is a lot of room for improvement in both product design and user experience. 0xScope believes that there are currently three main problems:

• The processing efficiency of the bottom layer of the blockchain is too low
• The bottom layer of blockchain lacks analysis based on entity perspective
• The data dimension is single and the data quality is poor

Therefore, 0xScope proposes a new solution to the challenges encountered in today's data analysis circuit.

product

• Scope’s Entities

Different from the traditional analysis of a single address, 0xScope introduces a new data analysis basis - Scope's Entities. By assigning different weights to different types of rule edges based on the weighted aggregation algorithm calculated on the graph to identify other addresses of the user, 0xScope connects multiple individual addresses to form an entity to create a truly realistic user profile.

*Source: 0xScope official website

• Watchers Watchers is the first application launched by 0xScope, and it is called Tianyancha in Web3.0. Has the following five abilities:

• Address Clustering: Generate Ethereum-based address clustering
• Money Flow: Enables investigation, tracking and sharing of information about blockchain transactions
• Anti-money laundering risk score (AML Risk Score): Based on 0xScope's address aggregation and risk analysis algorithm, analyze the transaction of a certain address
• Venture capital tracking (VC Watch): analyze the data of VC, investment funds and other entities
• Whale Watch: Analyze the money flows of the top holders of a specific token

Source: 0xScope, Watchers is officially launched

• KYE

The full name of KYE is Know Your Entities, which is a comprehensive risk control service launched by 0xScope. Based on 0xScope's address penetration and risk analysis capabilities, 0xScope can quickly identify high-risk addresses, and use address clustering capabilities to mine and monitor other potential risk addresses. Currently KYE has identified more than 20 million risky addresses.

Fundraising & Team

0xScope raised a $3 million seed round in September 2022, co-led by investment funds ABCDE, Hash Global, and Liang Xinjun, followed by Bonfire Union, Mask Network Fund, and BODL Ventures.

Conclusion

**Middleware plays an indispensable role in the entire Web3.0 technology stack. **They connect network applications and blockchain technology, providing developers and users with a convenient and efficient way of interaction. From cross-chain bridges, oracles, gateway API protocols to data analysis protocols, these middleware technologies not only solve the problems of interoperability and data access, but also provide strong support for the development of decentralized applications. However, Web3.0 middleware is still in the stage of continuous evolution. Technological progress and innovation will continue to drive the development of middleware, bringing more choices and possibilities to users and developers. At the same time, security and stability are also issues that require continuous attention and resolution to ensure that users' assets and data are fully protected.

Overall, the development of Web3.0 middleware has injected vitality into the ecosystem of decentralized applications. The continuous improvement and innovation of technologies such as cross-chain bridges, oracles, gateway API protocols, and data analysis protocols have provided a solid foundation for the integration of blockchain and traditional Internet. Over time, we can expect more exciting middleware technologies to emerge, furthering the growth and innovation of Web 3.0.