Infochain: A Decentralized, Trustless and Transparent Oracle on Blockchain
This addresses the need for decentralized, trustless oracles in blockchain applications, enabling more secure and transparent financial transactions.
The paper tackles the problem of acquiring correct real-world information for blockchain systems without relying on trusted third parties, by proposing a peer-consistency incentive mechanism and implementing a trustless oracle in Ethereum with optimizations to reduce gas costs.
Blockchain based systems allow various kinds of financial transactions to be executed in a decentralized manner. However, these systems often rely on a trusted third party (oracle) to get correct information about the real-world events, which trigger the financial transactions. In this paper, we identify two biggest challenges in building decentralized, trustless and transparent oracles. The first challenge is acquiring correct information about the real-world events without relying on a trusted information provider. We show how a peer-consistency incentive mechanism can be used to acquire truthful information from an untrusted and self-interested crowd, even when the crowd has outside incentives to provide wrong information. The second is a system design and implementation challenge. For the first time, we show how to implement a trustless and transparent oracle in Ethereum. We discuss various non-trivial issues that arise in implementing peer-consistency mechanisms in Ethereum, suggest several optimizations to reduce gas cost and provide empirical analysis.