Infochain: A Decentralized, Trustless and Transparent Oracle on Blockchain

TL;DR

This paper introduces Infochain, a decentralized oracle system on Ethereum that ensures truthful real-world data acquisition without relying on trusted third parties, using peer-consistency incentives and addressing implementation challenges.

Contribution

It presents the first implementation of a trustless, transparent oracle on Ethereum, combining incentive mechanisms with practical optimizations and empirical analysis.

Findings

Peer-consistency incentives effectively promote truthful data in untrusted crowds.

The Ethereum implementation reduces gas costs through various optimizations.

Empirical analysis demonstrates the system's feasibility and efficiency.

Abstract

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.