Millie on Warpcast

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Truth Oracle is a decentralized source of Truth that verifies subjective real-world information onchain. It enables the provision of Truth to applications in ways that were previously unviable. If that sounds interesting, you will love this thread. Let's break it down 🧵 1/n

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The Oracle utilizes the power of intersubjective Truth to resolve disputes with strong, yet practical guarantees. It's the first optimistic oracle that can scale to meet the demands of micro-applications. It can be used to optimistically verify virtually any offchain data. 2/n

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If you're interested in the provable details, I recommend reading the whitepaper. But for a high level understanding of the protocol, this thread should build the necessary intuition. Link to paper - https://truth-oracle.gitbook.io/truth-oracle Now, let's dive in 👇

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So, what are the current standards for optimistic oracles? Most modern day designs reduce down to token voting and economic security. Resolutions are determined based on the outcome with the greatest economic weight behind it. 4/n

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Typically, claims are optimistically considered valid unless otherwise disputed within a challenge window. When a dispute is filled, token holders have the first and last say. When voting ends, the option with the most economic support is set as the final result. 5/n

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Below is a depiction of the process:

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Naive dispute resolution schemes work in preventing spam and griefing attacks because when outcomes are objectively verifiable, the narrow subjectivity of single-step arbitration doesn't cause too many problems. But that design falls apart the moment outcomes are ambiguous. 6/n

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I know what else you're thinking though; "wait, in that case can't anyone just use raw capital to manipulate outcomes?" And that is a very good question, to which the answer is; yes, naive token voting is definitely vulnerable to economic manipulation. 7/n

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In fact, basically every app that uses optimistic oracles has some multi-sig backstop. Generally, this multi-sig belongs to the team behind the project. Usually I would criticize such a construct, but in this case these projects have no other choice. 8/n

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Leaving their apps vulnerable to manipulation is simply not a viable solution. However they also want to be credibly neutral in their application's resolution process, so they end up outsourcing the service to crude token-voting providers anyway, despite the issues. 9/n

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The limitations I've discussed so far are what motivated Truth Oracle. This protocol aims for a maximally credible dispute resolution process which is not limited to the subjectivity of a single token holder base or a small group of actors. 10/n

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Instead, Truth Oracle permits multi-stage escalation with proposed resolutions from independent, interdisciplinary actors at every step. The nature of this process is what makes this oracle intersubjective, as apposed to typical single layer dispute resolution frameworks. 11/n

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One of the innovative aspects of this protocol is its permissionless approach to Proof of Reputation. Truth Oracle employs a lottery system to encourage provably reputable identities within the Ethereum ecosystem, who are recognized by the protocol, to serve as Attesters. 12/n

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In a typical Truth Oracle implementation, there are 3 separate arbitrators, each proposing resolutions in different stages within a resolution path. They operate under the following ascending hierarchy: - Committees - Token Holders - Attesters illustration of the process:

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Resolvers/Claimants: Like with traditional optimistic oracles, Truth Oracle allows permissionless resolution. Anyone can put up a bond and submit a claim or resolution (depending on the context of the application). In the ideal case a claim or resolution is optimistically assumed to be valid unless it is disputed. If a proposed resolution is clearly erroneous, the resolvers' bond can be slashed. Given how trivial it is to slash the bond of the resolver, in most cases, there shouldn't be too many malicious resolutions. Once the optimistic challenge window passes, the resolver receives a modest reward. 14/n

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Disputers: Disputers are essentially the same group of actors as initial resolvers. They monitor the outcome of markets and propose resolutions, or dispute inaccurate ones. They can challenge in three different stages during designated challenge windows, by putting up larger bonds with each escalation. It starts with a bond equal to that of the initial resolvers/claimants, and increases every time a higher authority needs to weigh in. This design is meant to ensure the cost of griefing the protocol and forcing it to expend resources is non-trivial. 15/n

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Committees: Responsible for the majority of dispute resolutions, Committees serve as the protocol's initial arbiters. If an optimistically proposed resolution is disputed, Specialist Committees appointed via governance, resolve the dispute. These Committees are made up of individuals who specialize in specific types of applications. Ideally they're closely familiar with the apps in question and potentially have other functions within their respective apps as well. 16/n

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Something that's relatively common when verifying subjective information is the occurrence of an unexpected outcome. These ambiguous outcomes can potentially be unexpected for all the participants involved, including the market creators, or whoever defined the rules. It is in these cases that Committees offer valuable insights to what a resolution "should be" in the context of the market and its respective rules. If participants refute the resolutions proposed by these Specialists, they can simply put up a bond and file a challenge, escalating the matter to token holders. 17/n

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TRUE - The Oracle token: TRUE serves several functions within the protocol. It provides economic alignment to the oracle, resolves mid-level disputes, governs all the components of the protocol, and plays an important role in maintaining the liveness of the oracle. Where Specialist Committees offer deep insights with their proposed resolutions, TRUE holders contribute economic subjectivity to the dispute resolution process. If a Committee proposed resolution is challenged, TRUE holders are next in line to arbitrate. However, in a full Truth Oracle implementation, their decisions are not final, they simply offer another layer of perspective to the intersubjective framework. If the community takes issue with a TRUE holder proposed resolution, they can dispute this decision by putting up a substantial bond. 18/n

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It should be noted, though, that TRUE holders are incentivized to act honestly because they don't make the final decision in resolution paths anyway. A maliciously proposed outcome would only damage the Oracle's credibility and the value of the token by extension, making it a pointless endeavour. For this same reason, the token is not a likely target of bad actors seeking to use it for manipulation, because even though it governs the protocol, it can't obstruct a market or claim once they're live. There is a lot more to be said about the token and I encourage those of you who are curious to read the white paper section on TRUE, but for now, I'll have to leave the rest for another thread. Below is a graphic illustrating TRUE's various utilities: 19/n

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