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On Elastic Incentives for Blockchain Oracles

On Elastic Incentives for Blockchain Oracles
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Author(s): Renita M. Murimi (University of Dallas, USA) and Grace Guiling Wang (New Jersey Institute of Technology, USA)
Copyright: 2021
Volume: 32
Issue: 1
Pages: 26
Source title: Journal of Database Management (JDM)
Editor(s)-in-Chief: Keng Siau (City University of Hong Kong, Hong Kong SAR)
DOI: 10.4018/JDM.2021010101


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A fundamental open question for oracles in blockchain environments is a determination of the amount of trust to be placed in the oracle. Oracles serve as intermediaries between a trusted blockchain environment and the untrusted external environment from where the oracles fetch data. As such, it is important to understand the uncertainty introduced by the oracle in the trusted blockchain environment and the implications of this uncertainty on blockchain performance. This paper develops a model for commoditization of trust. The model provides for dynamic trust environments that incorporates oracle selfishness. The work also considers the equilibrium behavior for the demand and supply for trust and introduces elastic incentives for increasing the trust. These results are used to determine optimum size of the network that can be served by an oracle with varying degrees of selfishness. Key consequences and challenges of incorporating oracles in trusted distributed ledger environments are presented.

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