Research Summary: Chainlink 2.0: Next Steps in the Evolution of Decentralized Oracle Networks

@jmcgirk this is a great question and it actually relates to one @Zach and I discussed a bit in the Off-Chain Reporting post about data integrity. During our conversation, @Zach summed up the idea of how data is ensured to be correct by stating the importance of staking:

I see explicit staking as a key aspect of scaling up network security in the medium to long term, particularly when the underlying smart contracts consuming this data begin to secure increasing amounts of value.

Chainlink 2.0 explicitly discusses how staking will be used as a way to ensure the data being reported by nodes is correct in section 9.4. Specifically, I want to draw attention to section 9.4.1 Further Mechanism Details starting on page 89.

Using the new bribery-resistant system all nodes will need to stake two different deposits; a deposit that can be slashed if disagreements are found and a “watchdog” deposit. This watchdog deposit seems to be a key aspect of ensuring data reported on DONs is accurate and correct. Essentially, this watchdog amount acts as a type of bounty for nodes to find and successfully report data errors being reported by other nodes.

If we look at Figure 16 we can see the general idea of how these staking deposits can be used to ensure data is reported properly, or how nodes can be rewarded if they report faulty data/incorrect nodes.

The figure shows that anyone attempting to maliciously influence other nodes to upload incorrect data must pay more than that of the potential rewards any one node may receive if they were to successfully report the malicious act/incorrect data. This economic incentive makes it so any purposeful data manipulation should be extremely expensive, and economically incentivizes nodes to report such instances.

In the comment chain I reference above regarding the security of OCR data, I purposed the idea that industries may come together to collude and provide false data in OCR reports. This specific bribery-resistant staking mechanism seems to address this issue, and helps ensure the data being uploaded is correct and accurate.

@Zach I’d love to hear your thoughts on the matter as well.

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