Truly decentralized oracle networkInfrastructure
Decentralized technologies such as blockchain are revolutionizing many industriesincluding finance. Applications such as decentralized lending, stable currencies, predictionmarkets, and synthetic assets are being researched and built on top of them. Many suchapplications depend on real-world data, which is not readily available inside the blockchainenvironment due to their design. Currently, this problem is being solved by something calledan “Oracle”, which is an entity that reads real-world data and feeds it to the blockchain.Current Oracle solutions are either centralized or vulnerable to certain attacks. Currentoracle solutions may work short term but are not suitable for long term applications, which isessential in decentralized applications.
In this paper, we propose a fully decentralized oracle network called "Razor network"with built-in governance, so that the network can thwart such attacks and remain functionalin a constantly evolving environment. Razor network is resilient to bribing attacks since itutilizes a high degree of redundancy and offers high economic security for all applicationsregardless of the fees being paid to the oracle. Razor network also can dispute the results ofthe oracle, which makes it resistant to many kinds of game theoretical vulnerabilities.
Razor network consists of stakers who accept queries from a job queue, performfetching of information from the real-world, process and aggregate the results and servethem to the requesting application. Stakers are awarded for reporting coherently andpenalized for reporting incoherently.
Razor network uses a proof of stake consensus algorithm and uses a native utilitytoken called RAZOR. RAZOR are needed to be locked to participate as a staker in thenetwork. Stakers are awarded fees as well as block rewards for participating in the network.The amount of staked tokens of the staker determine their influence in the network.
The design goals of the Razor network are to ensure the long term sustainability ofthe oracle and the data feeds it provides, a high degree of decentralization, high economicsecurity in a way that protects both stakers and clients of the oracle from various attacks.