Oracles -

An overview

By Alexander Herrmann
Oracles

Secure information feeds are essential for the

growth of decentralized eco-system
Existing techniques
SGX and Decentralized Ultimate Oracle
TSL-notary governance with
on-chain split

Secured method is:

 SGX
Intel technology that allows user-level code to allocate
private regions of memory of memory, called enclaves

Security
Bad

Trust
Trusting Intel is required

Comment:
Only a technology to build safer
environments for oracles
 TSL-notary
Verifiable TSL connection makes oracle
actions transparent

Security
Bad, no on-chain verification possible
without trusting third parties

Trust
Trust would be needed to AWS AMI
APIs

Advantage:
Great tool to make communication
public, can be used for decentralized
decision making.
Existing techniques
SGX and Decentralized Ultimate Oracle
TSL-notary governance with
on-chain split

Secured method is:

Ultimate Oracle
Betting about the outcome of an escalated
report by putting ether on stake.

Security
Practically very secure

Implementation
Easy to implement

Risk
Brinkmanship approaches are not well
perceived by community
Ultimate Oracle Risk

-> Huge upfront deposits can not be prevented,

as additional smart contracts can enforce
deposits
-> Huge upfront deposits will influence
betting behaviour

-> If 10% of all ether are bet on the wrong side,Personal

will opinion:
good whales rescue the ultimate oracle and risk a
Chain splits will
become quite frequent
chain split? and a method to
resolve eco-system
issues.
Existing techniques
SGX and Decentralized Ultimate Oracle
TSL-notary governance with
on-chain split

Secured method is:

Decentralized Oracles
Decentralized governance by voting with stake about
issues with on-chain split in case of disagreement of
stakeholders

Security
Determined by stake used for voting

Advantage:
Decentralized governance can react to
all kind of situations

Disadvantage:
Implementation is hard
Augur
REP
REP

REP has
2 month higher market
trading value

REP
REP

Fork handling: Game theory: Drawbacks:

Markets go to the Manipulators will ->voting might be
most popular fork by always lose money, ambigious
default after 2 ->Security depends
months. on singular platform:
augur
->Implementation is
very hard
Lets built best
oracle in class
 Drawbacks list:
TSL notary services ->voting might be
ambiguous
1st Step
Oracle sends data feed ->Security depends
Client on singular
Oracle into the blockchain.
DAO 1
platform: augur
->Implementation is
very hard
2nd Step
Clients are delaying their
settlements of transaction
in order to give users the TSL
Notary
Dapp Users Security
chance to report oracle
issues. This works well as
3rd Step users can check
If no issue has been autentestors (aws
Client +azure+..) ami api.
reported after 10 blocks, DAO 1
the transactions are Likelihood that
aws+azure+.. Are
getting settled.
cheating at the same
time is very low.
 Drawbacks list:
DAO linkage ->voting might be
ambiguous
->Security
depends on
Strategy: Client
DAO 3
singular platform:
augur
Link Client-DAO shares to ->Implementation is
the oracle and use their Client
DAO 2
very hard

shares value to protect the

oracle Client
DAO 1

Evaluation of method:
Code and whitepaper
well perceived
DAO linkage Client
DAO 2
Client
Client DAO 1
DAO 3

Schelling Client

Coin Betting DAO 3

Manipulation
Client
DAO 2 Split

Client
Client DAO 2
Client
DAO 3
Complexity DAO 1
Client
DAO 1
Linkage and
allowance to split is
too complex to
implement.
If Schelling Coin mechanism is getting manipulated, DAO-system split is applied:
Game theoretical
very safe ->Attacker ends up with worthless DAO shares,
-> honest better gains valuable DAO shares
How make it with lower
complexity?

->simpler
->modular
BoB Oracle Client
DAO 1
Client
DAO 2
Feed request
Feed answer
TSL notary Safe guard ERC20
central
oracle contract token

Manages central
oracles
Proof of deposit

Creates e
b urs
Token m
ei
a nr n
VeriethToken nc ke
oke 0 To
holder govern T 2
eth ECR
the DAO V eri Safeguard contract
VeriethToken stores ERC20 tokens
Get Dividends Holder
BoB Oracle Client
DAO 1
Client
DAO 2
Feed request
Why deposit ERC20 in safeguard contract
Feed answer
People are incentived to deposit
TSLerc20 token,
notary Safe guard ERC20
central
because this will create VeriethToken, which will earn contract token
oracle
dividends from the oracle.

Manages central
oracles
What is the function of ERC20 deposit
Proof of deposit
These ERC20 funds are untouched by the oracle
plaform and will only be used to save the oracle
platform from attacks. Creates
urs
e
Token m b
ei
a nr n
VeriethToken nc ke
oke 0 To
holder govern T 2
eth ECR
the DAO V eri Safeguard contract
VeriethToken stores erc20 tokens
Get Dividends Holder
BoB oracle - attack
Shares allocated
from voting
Dutch
auction
V
Market Cap M
Client
DAO 1
VeriethToken
Betting on issue
Shares sold to
public via auction
Shares sold to
DAO -Split public via auction
Issue Issue
with feed unresolved

central V Market Cap M

oracle
Shares allocated
from voting

The split variant with higher market cap is

assumed to be the truth
BoB oracle - attack
V token end to be Safe guard ERC20
worthless
contract token
V

V Safe guard contracts

check which oralce V or
V has been chosen by
ERC20 DAO

V token holder can

exchange Vtokens for
ERC20 token

DAOs
choose new truth
fallback oracle
BoB oracle - attack

Attacker summary ERC20DAOs viewpoint

Security Oracle:
In order to manipulate the truth ERC20DAOs will decide for the right
attackers needs to spend the oracle since they would devalue their
accumulated value of all value in the token by deciding for the wrong
safeguard contracts oracle.

Resolving process: Risk for ERC20 tokenholder

Attacher ends only with worthless After chain split Veriethtoken holder
shares and a manipulated truth. will not get exactly their ERC20 token
System will cut out all attacker deposit back, just a compensation
positions distributed over all ERC20 tokens
accepted by safeguard contracts.
Benefits:

Strong modular approach => much faster to develop

Value hold in safeguard contracts will exceed value of

single platforms like augur and hence oracle will much Only Requirement
safer Only requriement for
ERC20 token is that they
can vote for a default
oracle.
Easy scalable and mature platform Can be done is separate
voting contract
Thank you

Lets develop the best

oracle together
Backup
Thank you

Lets develop the best

oracle together Lets unite all people
with blockchain system
and disrupt the system
of egoistic states
 Meet Alberto.
He recently moved from Spain to a
small town in Northern Ireland.
Tip
He loved soccer, but feared he had no
Tell the audience about
the problem through a way to talk to a coach or teammates.
story, ideally a person.
Meet Marcos.
He recently opened a camera shop
near the Louvre in Paris.

Visitors to his store, mostly tourists,

Tip
speak many different languages
If one example isnt
making anything beyond a simple sufficient to help people
understand the breadth
transaction a challenge. of your idea, pick a
couple of examples.

Story for illustration purposes only

A translation barrier
left Alberto feeling
lonely and hurt Tip

Marcos business. Ideally, speak of people

in very different
situations, but where
each could benefit from
your solution.
Lets built best
oracle in class
 A simple gesture
Coaches Gary and Glen knew no
Spanish.

Tip They used Google Translate to invite

Show how your solution Alberto to join in... Do you want to
helps the person in
the story reach his or play?... Can you defend the left side?
her goals.
3. Examples
People need to understand how rare or
frequent your examples are.

Pick 1 or 2 statistics and make them as

concrete as possible. Stats are generally not
sticky, but here are a few tactics:

Relate
Deliver data within the context of a
story youve already told

Compare
Make big numbers digestible by
putting them in the context of
something familiar
Its no surprise Marcos uses Google
Translate in his shop regularly.

There are 23
officially recognized Tip
Dont let data stand

languages in the EU. alone. Always relate it

back to a story youve
already told, in this case,
Marcos shop.

Source: theguardian.com
More than 50 million Americans
travelled abroad in 2015

THATS MORE THAN THE

POPULATION OF Tip

CALIFORNIA AND When a number is too

large or too small to

TEXAS COMBINED
easily comprehend,
clarify it with a
comparison to
something familiar.

Source: travel.trade.gov
4. Closing
Build confidence around your product or idea
by including at least one of the these slides:

Milestones
What has been accomplished and what
might be left to tackle?

Testimonials
Who supports your idea (or doesnt)?

Whats next?
How can the audience get involved or
find out more?
Milestones
October 2014 October 2015
Translate web pages with Translate text within an app
Chrome extension

2014 2015

August 2015 November 2015

Translate conversations Translate written text from
through your Android English or German to Arabic
watch with the click of a camera
Know a 2nd language?
Make Google Translate
even better by joining
Tip

the community. Inspire your audience to

act on the information
they just learned.
Depending on your idea,
this can be anything
from downloading
an app to joining
an organization.
Good luck!
We hope youll use these tips to go out and
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