What is Harbinger and Why Does It Matter?

Step aside traditional finance, because Tezos is leveling up its game with the introduction of Harbinger price oracles. This revolutionary project serves a crucial function—it delivers signed price feeds based on real-time market data gathered from a multitude of exchanges. What does that mean for you? Essentially, it makes the Tezos network ready for decentralized finance (DeFi) applications, paving the way for a whole new realm of possibilities.

How Does Harbinger Work?

Using a method paralleling the famous delegated staking of Tezos, Harbinger allows token holders to delegate not just their XTZ tokens but also the price oracles, ensuring they’re continually updated and prefunded. The genius behind this system is that it allows for:

• Self-sustaining price oracles
• A reduction in the costs required to keep oracle data current, thanks to rewards earned through proof of stake consensus

Essentially, Tezos has whipped up a new strategy where rewards help cover the fees for maintaining the price feeds. Talk about a win-win!

The Importance of Price Feeds in DeFi

Alright, but why are price feeds so critical for DeFi?

• Collateralized Loans: Price feeds empower protocols to create collateralized loans.
• Accurate Token Swaps: They help provide precise pricing for token exchanges.
• Trust Factor: Cryptographically signed feeds add a reassuring layer of security.

If you like your financial dealings to be as smooth as butter, then Harbinger’s reliable price feeds are music to your ears.

How Does Harbinger Stand Apart?

What sets Harbinger apart from the likes of Chainlink? Well, instead of charging hefty fees to post price data on-chain, Tezos holders can use their staking rewards to cover these costs. It’s like turning your rewards into an expense account! Harbinger utilizes components inspired by Compound’s Open Price Feed, but here’s the kicker:

• It works with ‘signers’ which comprise major exchanges like Coinbase and Binance.
• ‘Posters’ fetch prices from these signers and send them to a ‘storage contract’.
• A ‘normalizer contract’ pulls together a volume weighted average price for further distribution to dApps or DeFi protocols.

Initial contracts leveraging this structure are already up and running on CarthageNet and Mainnet, thanks to the enthusiastic Tezos community. Hooray for teamwork!

The Broader Landscape: Tezos and DeFi

Tezos didn’t just wake up one day and decide to dip a toe into DeFi. Earlier this year, StakerDAO launched, a platform for the secure governance of financial assets, which draws from the governance evolution inspired by MakerDAO. It’s worth mentioning what Jonas Lamis, CEO of Tezos Capital, had to say: he found inspiration in MakerDAO’s governance and wanted to bring a similar flavor to Tezos, thus serving community governance proposals through their very own STKR security token.

It looks like Tezos is serious about investing in its DeFi future, and Harbinger is yet another stepping stone in that journey!