[dlc-dev] Economic incentives for oracles

OB ob at ratatat.uk
Sat Jan 30 13:27:35 CET 2021

Hi Lipton. If oracles are paid then they can be corrupted with bribes. Consider bitcoin mining which aims to avoid that same potential for corruption of the validation authority signal via massive/permissionless replication of the role. I would anticipate that, just like in your example, established businesses would be willing to publish/attest to events via DLC as an almost inconsequentially low cost bolt-on to their primary businesses.

As an example MarkIt are the authority on the Purchasing Managers Index against which they will have some licensing revenue for commercial use. They will also make that information public via many channels (website, Reuters, Bloomberg, Twitter, RSS, etc..) and may be willing to add on DLC to maintain the dominance of the index in the marketplace.

I'm not following DLC discussions closely until now but I believe there are some more directly incentivised methods. If so that would expand the useful scope of DLC oracles however I'd be happy with the above as sufficient to make the tool useful.

> On 30 Jan 2021, at 10:22, Lipton Tea via dlc-dev <dlc-dev at mailmanlists.org> wrote:
> Hey
> What are the economic incentives for oracles to maintain their reputation? An oracle in DLC does not know which (or even how many) users use them. I assume from this that it is not possible for an oracle to be rewarded financially for being used (getting a fee every time their signature is used to unlock a contract).
> So what are the incentives? Maybe maintaining good reputation of an associated business (e.g. exchange). Looks not very promising, because then why to become an oracle in the first place. Such an entity can not win anything, but can lose, so better not to participate.
> If this was discussed anywhere or if this mailing list is not a good place for such questions, please let me know.
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