Improving the Resiliency of Decentralized Crowdsourced Blockchain Oracles

Abstract

The emergence of blockchain technologies has created the possibility of transforming business processes in the form of immutable agreements called smart contracts. Smart contracts suffer from a major limitation; they cannot authenticate the trustworthiness of real-world data sources, creating the need for intermediaries called oracles. Oracles are trusted entities that connect on-chain systems with off-chain data, allowing smart contracts to operate on real-world inputs in a trustworthy manner. A popular oracle protocol is a crowdsourced oracle, where unrelated individuals attest to facts through voting mechanisms in smart contracts. Crowdsourced oracles have unique challenges: the trustworthiness and correctness of outcomes cannot be explicitly verified. These problems are aggravated by inherent vulnerabilities to attacks, such as Sybil attacks. To address this weakness, this paper proposes a reputation-based mechanism, where oracles are given a reputation value depending on the implied correctness of their actions over time. This reputation score is used to eliminate malicious agents from the participant pool. Additionally, two reputation-based voting mechanisms are proposed. The effectiveness of the proposed mechanism is evaluated using an agent-based simulation of a crowdsourced oracle platform, where a pool of oracles performs evaluate Boolean queries.