Off-Chain Oracle Reports for Reliable Smart Contract Data
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Solution Overview
Problem
Decentralized computing environments face challenges in ensuring secure and reliable data exchange through smart contracts due to the potential for rogue oracles to provide inaccurate information, which undermines the trustless nature of these systems.
Innovation Solution
An off-chain oracle protocol is implemented, where multiple oracles jointly sign a report containing observations, and the first transmitter to successfully send this report to a smart contract on-chain is rewarded, while the protocol is designed to be resilient to failures and minimize transaction fees.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If multiple oracles jointly sign reports to improve reliability, then the security and accuracy of data provided to smart contracts is improved, but the complexity of the system increases
Solution Approach 1:
The system segments the oracle network into multiple independent nodes that each collect data from off-chain sources. Each oracle operates independently but contributes to a collective report, dividing the complex task of reliable data verification into simpler individual oracle functions while maintaining overall system reliability through aggregation.
Solution Approach 2:
Multiple oracle reports are merged and aggregated into a single consolidated report that is then submitted to the smart contract. This combining approach allows the system to achieve high reliability by synthesizing data from multiple sources while presenting a unified interface to the blockchain, managing complexity through consolidation rather than multiplication of interfaces.
2Speed
If oracles transmit reports to smart contracts frequently to reduce latency, then the speed of data availability is improved, but the transaction costs increase
Solution Approach 1:
Oracles perform preliminary actions by collecting and validating data off-chain before submitting reports to smart contracts. This preliminary data collection and verification reduces the frequency of on-chain transactions while maintaining timely data availability, as the bulk of the work is completed beforehand in a lower-cost environment.
Solution Approach 2:
The system transmits reports to smart contracts more frequently than the minimum required, ensuring that data is available when needed. This excessive action approach prioritizes speed and availability over cost minimization, allowing the system to handle time-sensitive operations while the cost impact is managed through efficient off-chain processing.
Data Source
AI summary
A system and method in which a network of offchain oracle nodes are used to provide dynamic information to consuming smart contracts in a decentralized computing environment. The off-chain oracle network and a corresponding protocol reduces the likelihood of damage from rogue oracles acting in concert. Periodically, the oracle nodes, jointly and in concert, run the protocol to sign a report containing observations from many of the oracles in the network. The report is transmitted to a smart contract C running on a DLT. The smart contract C can validate the report, pay each oracle node that contributed an observation to the report and expose the median, or other calculated value, of the reported values to the on-chain consuming smart contracts.