CryptoUnlocked Oracle Upgrade – WeTrust Blog
Realit.io Walkthrough and Seed Program
WeTrust has successfully upgraded its flagship application, CryptoUnlocked. Our V1 initially relied on Augur, the decentralized prediction market that simultaneously can be referenced as an oracle. When we set out to build an application for conditional crowdfunding, we chose to use Augur’s token-based prediction market as a reporter for our smart contracts.
Using Augur as an oracle has been an idealistic dream for the cryptocurrency space for a long time, and we are proud to have been one of the first dApps to experiment with such a use-case. Unlocking the wisdom of the crowd for smart contract oracles is one of the most important ideals in crypto-economics.
Having generated buzz and interest in our product by initially building on Augur, we are now ready to evolve beyond. Augur has a number of limitations that we encountered: primarily the cost of Augur market creation (recently the REP token bond to create a market has exceeded $800). Furthermore, using Augur as an oracle can introduce a long-term theoretical vulnerability for Augur itself called “parasitic open interest.”
As in, if the value of money relying on Augur outside of the system exceeds the total open interest in markets within the system, theoretically the game theory of the entire Augur ecosystem is threatened. Second-layer references to Augur can avoid this problem by directly buying shares on Augur. Yet such a solution introduces additional complexity and cost, as opposed to simply reading its market resolution states.
However, as Augur is a truly decentralized and permissionless ecosystem, there is no mechanism (other than potential social pressure) to deter parasitic open interest. Augur is one of the most fascinating experiments in the dApp world, and will likely encounter other, less friendly smart contracts referencing Augur in the future. We felt it was important to be one of the first projects to test Augur’s oracle ability, without the betting, for the sake of great Ethereum projects such as Chainsafe, Prysmatic, EthHub, Moloch DAO, CryptoEconomics, etc.
Importantly, our building on Augur did not involve Trustcoin, WeTrust’s native token. In our research toward the next oracle evolution, we encountered a promising alternative, a dApp called Realit.io.
Realit.io, a recipient of the Ethereum Foundation Grants Program, describes itself as a “mechanism for verifying real-world events for smart contracts.” It is essentially a due-process oracle with something-at-stake (Ethereum or Trustcoin). Similar to Augur in terms of reporting answers, without the betting market.
Users via the Realit.io method are rewarded for truthfully answering the outcome of objectively verifiable questions, such as, “Will Donald Trump win the 2020 election?” When a Challenge is created on CryptoUnlocked, a verifiable & binary (Yes/No) question is asked. A user can provide an (optional) reward for the question’s valid answer, of which that same user or any other user can later answer correctly to claim the answer.
Trustcoin curators are then encouraged to scan the Realit.io explorer for newly Open questions and then reap rewards for correct resolution or Challenge any invalid answers for the sake of maintaining the integrity of the oracle.
Here is the walkthrough for how exactly it will impact the CryptoUnlocked user experience.
Upon Campaign Creation, the user sees the above. Instead of providing an Augur address, the user can now create their own question directly in CryptoUnlocked. After entering an objectively verifiable question such as, “Will the Golden State Warriors win the 2019 NBA Championship?” and a logical corresponding date, the foundational question for a great CryptoUnlocked Campaign is set.
Your question needs to have a publicly verifiable answer, and then you can choose an Arbitrator. In the event of a severely contentious or vague question, a Question’s resolution can be sent to a third-party Arbitrator. For now, however, the User does not have to worry about this and can rest easy with the default setting (Realit.io team), where the third party will determine if the answer is Yes, No, or Invalid.
As with Version One, the Campaign Creator can then continue creating a great CryptoUnlocked Campaign, by choosing a reasonable beneficiary, crafting a great story, and uploading creative imagery. For all intents and purposes, the previously described process is the primary and only difference for Realit.io’s upgrade in the native CryptoUnlocked user experience.
What’s important, however, is what happens to a question made in CryptoUnlocked, on the Realit.io side of things.
After you create a question, it is then posted on the Realit.io application, found here. The Campaign Creator is encouraged to answer their own question, let’s say the day after the Warriors win the 2019 NBA Championship. The Creator would navigate to Realit.io and answer YES.
Answering requires posting a Bond, a small amount of Trustcoin, which you will receive back if the answer is correct. If you incorrectly answer NO, however, you will be Challenged by a more truthful and enterprising User. In which case you will lose your Bond. So there is something-at-stake for truthful answering and rewards for those that accurately fix others’ mistakes.
After the Resolution period ends, the Question’s resolution will determine the corresponding CryptoUnlocked Campaign’s condition. Campaign Creators and enterprising curators are encouraged to scan the Realit.io explorer, be familiar with Realit.io’s more extensive documentation, and be rewarded for answering questions correctly.