OAK Network: Trustless automation for higher DeFi efficiency
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The concept of decentralized finances is revolutionary in many ways. You can trade your tokens, lend them for interest or even tokenize and trade various real-world assets.
However, the truth is that DeFi is still very complicated and it lacks a lot of features that are readily available for users of centralized platforms — recurrent payments, limit orders in trading, triggered payments based on some condition or reward compounding to name a few.
OAK network is aiming to become a one-stop-shop for automation services that are desperately needed in the blockchain space across a variety of L1s and can be plugged into various DeFi platforms. So let’s have a deeper look at what OAK offers to the crypto ecosystem!
What is OAK Network?
OAK (On-chain Autonomous Kernel) Network is a layer one for on-chain payment automation. OAK is basically a framework for building automation services that provide out-of-box functionalities for other blockchains such as recurring payment, auto compounding, dollar cost averaging or stop-loss enabled trades.
Other blockchains can use services and solutions provided by the OAK network to automate their processes like placing limit orders in their DEX. OAK Network is simply the DeFi hub for payment automation in Web3 space. In the Dotsama ecosystem, it leverages the XCMP usage for other parachains.
Three basic concepts of OAK
- non-custodial — all the executions are done directly from users’ wallets
- triggers — defining the executions for previously stated data streams, which can be related to date/time or any other conditions
- actions — asset transfers, automated reward restaking and other functionalities utilized on other parachains by leveraging the XCMP
Real use cases in DeFi
OAK enables quite a lot of functionalities that are not available today for most of the DeFi projects (and especially not without some sort of custodian). Let’s have a look at the most important ones.
Event-driven transactions
Execution of transactions related to any specific event (like when the exact time occurs or an asset reaches a certain price)
- in a specific date and time (Alice send 100 DOT to Bob on Monday at 8 am),
- meeting the price conditions (Alice sends 50 KSM to Bob when the price of KSM reaches 200 USD), or
- any other measurable conditions approved by an oracle (Alice sends 1000 aUSD to Bob when the weather in Prague reaches 30°C)
Repeated payments
It’s not a big deal to manually execute a one-time transaction. But once the number of repeated transactions exceeds some amount, you rather prefer to automatize that.
It’s the same process you do in your internet banking, where you try to automatize repeated payments, so you don’t need to handle them every month or week. Such as paying for your mortgage, rent or bill for utilities.
Auto compounding
Automated reward restaking is the most effective way to earn compound interest on your staked asset. It’s a really nice example of when automation comes in handy because otherwise, you would have to claim rewards and stake them every now and then.
Dollar-cost averaging (DCA)
DCA is the most effective way how to invest in any asset including cryptocurrencies. It avoids the emotions of traders and the endless quest to buy the dip. In other words, it's just another automation process that can be done by OAK and its services.
Stop-loss trades
Decentralized swaps in AMM-style DEXes are quite a decent way how to trade your cryptocurrencies without a middleman. But not applicable, when you want to trade in a more efficient way using order books and limit orders. One level beyond spot order trading is using stop-loss trades, which helps users to minimalize their losses or utilize various different trading strategies.
Key characteristics of OAK
The key characteristics that give OAK Network an edge are
- no wrapped asset: assets are supported by the chain and no longer need to tie up with one smart contract
- one-to-many distribution: OAKs virtual machine supports the capability of sending to multiple addresses with one transaction
- off-chain servers elimination: repetitive transactions can be triggered by the on-chain event module
- no private key custody: set up once, the transaction can then be triggered on-chain effortlessly
- chain-level security: compared to EVM smart contracts, many core utility functions are secured by the network itself
- native upgradability: based on Substrate, OAK Network will constantly evolve with on-chain runtime upgrade
- on-chain governance: similar to Polkadot, Kusama, and most parachains, OAK and Turing are both driven by on-chain governance, where the token holders make decisions in referenda and proposals
Tokens
OAK Network has its own native token OAK with a total supply 1 000 000 000 and fixed inflation of 5%. 3% of the token supply is an allocation as the future parachain reserve to get another slot without a crowdloan event.
The OAK token is a utility token, which will be used for these operations:
- network transaction fees
- automation fees to prioritize tasks
- collator staking which makes the network stable
- on-chain governance for democratically determining further network direction
- community DAO resources to build and experiment
- developer incentives in form of grants and bounties, which accelerate dApps progression
Canary network — Turing
Turing Network is the canary network of OAK. It already has its own parachain slot after winning the 30th parachain auction on Kusama. Turing has its own native token TUR, so think of Turing as a kind of testing space with real value. TUR has also a total supply of 1 000 000 000 tokens with 5% inflation, such as the OAK token.
After the liquidity bootstrapping event on Mangata X, the TUR token is tradable on this DEX in pair with MGX or KSM.
OAK Network crowdloan for Polkadot slot
OAK Network crowdloan for the Polkadot network went live on September 20th, targeting the 28th auction. Contributors will receive up to 1.5% of the OAK tokens from an initial supply of 1 billion at a ratio of up to 100 OAK per 1 DOT contributed.
Crowdloan rewards will vest evenly per quarter (12.5%) for the first 24 months, with the first distribution occurring one month after TGE (Token Generation Event).
Contributors who use a referral code will receive a 10% referral bonus split between referrer and extension. Feel free to use our referral link to grab a bonus and help us to support our Medium channel!
You can participate in OAKs crowdloan via Parallel Finance, Bifrost Slot Auction Liquidity Protocol (SALP), or their own crowdloan website.
For the crowdloan, OAK Network uses a fiat on-ramp widget provided by Gem (from Blockdaemon), which enables users to buy and transfer DOT tokens directly on the crowdloan page.
Summary
OAK Network is an automation hub for DeFi-related blockchains built on Substrate with a first-of-its-kind event-driven execution model. With its usage, transactions are triggered by event signals such as time, price, and smart-contract state changes. This pushes the capabilities of the whole DeFi space even further up and also adds new functionalities that haven’t been available before.
By using automation processes, DeFi operations can be more effective and comfortable to use. And efficiency is the name of the game in decentralized finances.
Polkadotters are a community completely funded from staking rewards, so if you like what we do, please nominate our nodes on Kusama, Polkadot or any parachain network that supports staking — like Moonbeam, Moonriver, Bifrost or Turing network. All contributions are very much appreciated :-)
