Overview Oracle Network
Oracles Network is an open, public, permissioned blockchain based on Ethereum
protocol. To reach consensus on a global state, it uses a Proof of
Authority consensus algorithm. PoA consensus is a straightforward and
efficient form of Proof of Stake with known validators and
governance-based penalty system. A list of validators is managed by a
smart contract with governance by validators. During an initial
ceremony, master of ceremony distributes keys to 12 independent
validators. They add 12 plus one more to reach initial requirements for
the consensus. To be validators on the network, a master of ceremony
asks them to have an active notary public license within the United
States. A concerned third party can cross-validate validators’
identities using open data sources and ensure that each validator is a
good actor with no criminal records. In the proposed network, identity
of individual validator and trust to independent and non-affiliated
participants will secure the consensus.
The network is fully compatible with Ethereum protocol. The network supports only Parity client version 1.7 and later. The network supports trusted setup, on-chain governance, and a variety of “proof of identity” oracles. We believe that Oracles Network will close a gap between private and public networks, and will become a model for open networks based on PoA consensus.
Purchased coins will be included in the genesis block and will create initial liquidity for the network.
Validators will start to create blocks and generate a reward for the network security. For each generated block, a validator who created it will get one coin and all fees for transactions. Each validator has equal rights to create a block.
The network will start with 12 validators. With 12 validators active, each validator will create one block every 12 blocks. For each block one coin will be created as a reward for validators and one coin for self sustaining of the network.
A block will be generated with an average time of 5 seconds. During the first year of the network, validators will create 31,536,000 sec/5 sec per block = 6,307,200 blocks.
In 2017 the issuance rate of Ether is 14.75%.[7] Roughly five Ethers per block are issued. Because Ethereum rewards Uncles it means that there may be more or less than five Ethers.[7:1]
By 9/7/2017 miners generated 21,335,541.72 ETH as Mining Block Reward and 1,181,201.88 Mining Uncle Reward. For securing the network, they received a total of 22,516,743.6 ETH. Using the 9/7/2017 price of $303.86, security of the network costs 22516743.6 ETH * $303.86 = $6,841,937,710.296.
There are 56,048,767 transactions on the network. Security of a transaction in the main Ethereum network costs are about $122.07 at the current rate.
All validators on the network are residents of the U.S. Therefore, they are all located in the same legal system. Hard fork decisions will be signed as legal documents and will be recognizable in a court system. This will bring protections to participants of the network and will open new possibilities to decide how to deal with ongoing changes.
For a validator, setting up a node is a one-button solution. For a mining node, a validator will provide
The network is fully compatible with Ethereum protocol. The network supports only Parity client version 1.7 and later. The network supports trusted setup, on-chain governance, and a variety of “proof of identity” oracles. We believe that Oracles Network will close a gap between private and public networks, and will become a model for open networks based on PoA consensus.
* About Oracle Network
Validators
Independent U.S. public notaries with active commission license will be the first validators in Oracles Network. For the initial ceremony, 12 initial keys will be created by a master of ceremony. He will distribute those keys to individual validators. Each validator will change a key to a new subset of keys using a client-side DApp. After the initial distribution of licenses, an additional validator can be added through the voting process on the built-in Governance DApp. A majority of votes will be needed from validators to be accepted into the smart contract with a list of validators. to better understand the validation process on oracle network please see the video below.Economy
Crowdsale will take place before the launch of the main network.Purchased coins will be included in the genesis block and will create initial liquidity for the network.
Validators will start to create blocks and generate a reward for the network security. For each generated block, a validator who created it will get one coin and all fees for transactions. Each validator has equal rights to create a block.
The network will start with 12 validators. With 12 validators active, each validator will create one block every 12 blocks. For each block one coin will be created as a reward for validators and one coin for self sustaining of the network.
A block will be generated with an average time of 5 seconds. During the first year of the network, validators will create 31,536,000 sec/5 sec per block = 6,307,200 blocks.
Use Cases
Inexpensive Network
Oracles Network provides inexpensive consensus to secure the network.
Users can run Ethereum programs on Oracles Network and spend less money
on transaction fees. Overall cost of the network’s security will also
be cheaper due to lower market cap.
Problem
Though the issuance of ETH is in a fixed amount each year, the rate of growth of the monetary base (monetary inflation) is not constant. This monetary inflation rate decreases every year, making ETH a disinflationary currency (in terms of monetary base). Disinflation is a special case of inflation in which the amount of inflation shrinks over time.[6]In 2017 the issuance rate of Ether is 14.75%.[7] Roughly five Ethers per block are issued. Because Ethereum rewards Uncles it means that there may be more or less than five Ethers.[7:1]
By 9/7/2017 miners generated 21,335,541.72 ETH as Mining Block Reward and 1,181,201.88 Mining Uncle Reward. For securing the network, they received a total of 22,516,743.6 ETH. Using the 9/7/2017 price of $303.86, security of the network costs 22516743.6 ETH * $303.86 = $6,841,937,710.296.
There are 56,048,767 transactions on the network. Security of a transaction in the main Ethereum network costs are about $122.07 at the current rate.
Solution
In Oracles Network the issuance rate is 3.5% with future disinflation. There is no Mining Uncle Reward in the network, because consensus is not based on Proof of Work.Validators with known identity
Each validator of the network will prove his/her identity using “proof of identity” DApps. Each block will be attributed with the identity of a validator. If a miner breaks the rules of the open network, e.g. will not accept a transaction to a specific address, participants of the network will have legal instruments to resolve that problem.Fast network
Validators in Oracles Network create blocks every five seconds. This rate is tested on Kovan testnet and usable in the long-term. A faster network allows for building new types of applications where response rate from the distributed consensus is important.Legally recognizable hard forks
Hard fork is a change of the software. After applying this software, old clients will not be able to work on the new network.All validators on the network are residents of the U.S. Therefore, they are all located in the same legal system. Hard fork decisions will be signed as legal documents and will be recognizable in a court system. This will bring protections to participants of the network and will open new possibilities to decide how to deal with ongoing changes.
Model for experiments
The network is built to iterate fast. In the future many open and independent networks based on Ethereum protocol will operate and have interface for interoperability.Security Risks
Key compromise
During the initial ceremony, validators will be required to replace their initial keys with a set of three keys. Mining keys are located on a mining node. If a node is compromised, validators will create a ballot using Governance DApp and propose replacement of the mining key. If a voting key is compromised, a validator will ask another validator to create a ballot to replace his/her voting key. If a payout key is compromised, a validator will create a ballot to replace his/her payout key. Because payout is not required, a validator can specify a new payout key on a mining node without proposing ballots.Censoring signer
Censoring signing is an attack vector in which a signer or a group of signers attempts to censor out blocks that vote on removing them from the validators list. To work around this, we restrict the allowed minting frequency of signers to 1 out of N. This ensures that malicious signers need to control at least 51% of signing accounts, at which case it’s game over anyway.Regulatory risks
All validators are required to have an active notary commission. Doing block validation under the name of a notary public may be considered as false advertising and a regulator may revoke the notary commission from the validator. The network will mitigate the risk by providing additional identity checks for a validator. Eventually, those unbiased checks will replace the need for a validator to have an active notary commission.Collusion of validators
Validators may become an affiliated group even though we require them to be independent. Before distribution of initial keys, the master of ceremony will require validators to sign a non-affiliation agreement between them and the network. All validators are in the same jurisdiction, where the general public may enforce that agreement.Deployment
We provide a deployment script for cloud installation of mining, boot, and general purpose nodes.For a validator, setting up a node is a one-button solution. For a mining node, a validator will provide
- Mining Address. The address of the mining key received at the initial ceremony.
- Mining Keyfile. File with the private key of the mining key.
- Mining Keypass. The password to unlock the private key of the mining key.
- Admin Username. Username of admin user of the virtual machine, e.g.
root. - Admin SSH public key. Content of admin’s SSH public key. We do not allow use of passwords for the VMs.
- Netstats Server. Network statistics, e.g. number of Active Nodes, Last Block, Avg Block Time, Best Block, Gas Spending, Gas Limit, List of validators with parameters.
- Netstats Secret. Password to the netstat server.
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