Don't Trust, Verify: The Next Generation of Oracles | European Blockchain Convention 9

[Music] 3 2 1 go fantastic Nicholas kko founder of the chronicle protocol thank you so much for joining us great to see you rock on the Branded merch there as well bonus points okay choose a mic any mic we got lots of mics here we got a wonderful H clicker with your name in it right here you can drive the slides so you are in control fantastic the stage is yours my friend enjoy okay thank you very much hi uh my name is nich kungle and I'm the founder of Chronicle protocol uh if you're not familiar Chronicle protocol is an oracle protocol and uh so uh a little bit of context for for those of you who are new you know what is an oracle what what problem do they solve uh I think the easiest way to explain it is that uh blockchains are like black boxes uh they don't have access to any information outside of the blockchain right um a good analogy might be when you put your phone in airplane mode right uh all of a sudden your applications can't you know send and receive data anymore right and your phone becomes really useless right uh so crypto applications are the same way and the only way that they can kind of get access to data uh is through oracles oracles are kind of the solution to to this problem so uh a little bit about like our origin story uh you may not have heard of Chronicle uh but you may know us by our previous name uh so we were part of a company called maker Dow uh I was actually part of the founding team of maker Dow going back to 2016 uh maker Dow is the uh one of the largest defi uh protocols um on on ethereum and uh it creates the Sable coin die right and Chronicle is the Oracle for for maker right so we secure all of the Assets in maker Dow and since uh going back to basically June of 2017 right so um we were actually the creators of the first Oracle on ethereum so you know before uh chain link was even a white paper when when we were developing d right uh we had to kind of develop everything from scratch right there was no defi there was no dex's there was no Oracle so um we'd actually developed right the first Oracle on ethereum we developed the first Dex on ethereum and uh just so we could eventually develop D um So currently maker Dow has $6 billion do in uh assets under management in in tvl right and Chronicle oracles are securing all of those assets right now so um in order to kind of um understand you know what kind of sets chronical oracles apart and what makes them so compelling I think we kind of have to start with taking like a sobering look at the uh the current landscape right uh so let's start with kind of the price of oracles uh the cost of oracles is exorbitant uh they use an enormous amount of gas right they cost an enormous amount of transaction costs um and this is just due to kind of the the fundamental architecture of how oracles are engineered today and and this is a huge problem um in order to give you an idea for the the sense of scale of this problem uh at makerd Dow in 2021 we probably spent uh almost $6 million in gas right uh so it it can really add up you know and for a protocol like maker right they can afford something like that but what is everybody else supposed to do are you just supposed to rely on uh oracles you know that uh uh you know that aren't as secure or Arn as decentralized right and you know no like we shouldn't be cutting Corners we shouldn't be making these trade-offs right and typically the way that you you know bring these costs lower are you know Band-Aid fixes at best right maybe you update the Oracle less frequently right but now the Oracle is less accurate if you're not updating the data as often right or maybe you use a smaller set of validators right but now the Oracle is less secure and less decentralized because only a few parties now need to collude to kind of manipulate the Oracle so these are not really viable fixes for this Oracle scalability problem they're more like Band-Aid fixes and so what we really need is a real engineering solution to this problem of scalability furthermore um oracles today are kind of like a black box or they're kind of like fortune tellers so um you know when you look at an oracle today this this is kind of what you see right oh here is a you know an asset pair right and here is a piece of information right like a price but you as a user of this Oracle you have no context for this data uh you have no guarantees that this data is correct and you don't know the origin of this data or the provenance of this data where did this data come from right so you're really um just kind of blindly using this data and and and that's a really big problem right because we've have like these super transparent you know blockchains we've invested billions of dollars into building transparent blockchains right into building decentralized protocols that are transparent but then when it comes to infrastructure like oracles we just kind of like are fine with the black boxes that oracles currently are today right and we we we we need to solve that problem right all data should be verifiable and have kind of provenance and origin and context uh attached to it so uh what did Chronicle do well we uh created a new Oracle protocol called scribe which addresses all of these existing challenges of of oracles so um if you take nothing else away today except for this slide this is what I want you to remember uh that Chronicle is a decentralized Oracle protocol that is both verifiable and scalable and so we're going to get into each of these uh little categories for a second so starting with decentralization right uh Chronicle is powered by a network of decentralized feeds uh you can kind of think of them as validators and you know we only select validators that are you know the top tier kind of crypto projects right who have built up and established a reputation right that they are highquality partners that they operate with Integrity right and so as a user of a Chronicle Oracle right you're not putting your trust right in chronicle you're putting your trust in this kind of Consortium consensus right produced by these feeds and so who these feeds are is incredibly important and so you know we feel very fortunate to have you know Partners like maker like infura gcoin dydx nosis and and and all of these great partners and so as you add more feeds right as you um make this set bigger right it becomes more and more the Oracle becomes more and more secure right because uh you need to in order to kind of compromise the Oracle you need a super majority of this kind of feed validator set right to uh to act maliciously right so the Oracle kind of becomes more and more secure and more and more decentralized as you add more more high quality feeds so uh here's a screenshot of uh our dashboard uh you can check it out yourself at chronicl labs. org dasboard and you can watch all of these feeds right update um their data right in real time so they're constantly you know pushing these attestations right about okay at this second I think e is priced at this at this second I think rocket PO is priced this at this second I think you know madic is is priced at this uh so it's just a realtime kind of stream of of data attestations coming in so um with that said let's kind of delve into verifiability a bit right we we talked about the importance of data you know uh having kind of context attached to it right the provenance of data and what I want to stress is that you know transparency is not enough um what you also need is legibility and that's where I think kind of verifi ility kind of comes into play is verifiability is this combination of where transparency meets legibility and so it's not enough to just be on a blockchain and say oh it's transparent because it's all on chain uh it's not transparent if you know only you know a senior solidity developer right can make sense of like a bunch of random hex data right it's only really transparent it's only really verifiable when everyone can do it and so that's what we've tried to achieve with Chronicle is when you take a look at our dashboard right and you have this Oracle here right you don't just see the Oracle price but you start getting context for okay well here we have this price because all of these validators right uh reported the following values and this price was based off the model you know provided by all of the attestations between all of these different validators but we can go one step further and we can say well hey Argent why did you report that your price is you know 15549 right we want more context right we want to know what is the origin of this data and you can do that because Argent says well I reported this because uh I went to binance and I checked this pair and I went to Kraken and I went to bid stamp and I went to Gemini and I went to coinbase right so you really have this endtoend traceability of like this is where the data came from uh this is what the validators reported and this is why the Oracle is reporting this particular data is the canonical value on chain right and so this is something that no other Oracle does right every other Oracle will just give you like here's the price or here's the the final piece of data right take it or leave it right and that's that's kind of the the anti pattern that we want to get away from but you can even verify all of this data in your browser right so this attestation that Argent made right that the Argent value validator made right along with all of this contextual data of I got this from binance I got this from coinbase uh you can it's all been attested to cryptographically so you can verify the cryptographic signature in your browser to convince yourself that this is a valid update by this by this feed and if you were to change something about this attestation right if you were to change the time stamp by a second um then you know the uh it it won't the message have to station when you try to verify it it won't verify anymore right so this would not be accepted by the Oracle as a as a legitimate update and so the last thing I want to touch on is scalability and this is what I think that makes Chronicle really uh unique and Powerful compared to existing Oracle Solutions is that we have really solved this scalability problem like uh we are never going to have this problem again of protocols spending you know millions of dollars a year just on the transaction cost to update an oracle like with scribe that this is a solved problem uh so we've come up with an algorithm which we call optimistic schnor uh schnor cryptography is used heavily in Bitcoin for a number of years now uh so it's quite battle tested and battle hardened in terms of its security um but it essentially gives us a really important property and that property is that instead of having you know X number of validators you know giving data attestations and therefore generating X number of signatures right you have this one toone relationship of you know validator to signature with schnore cryptography what we can do is we can have uh many validators right uh work together to generate one signature and this is kind of the core kind of piece of what makes Chronicle so scalable compared to existing Oracle Solutions and so kind of our goals with this implementation right were one the primary goal was to decouple this relationship of the number of validators kind of being linearly proportional to the transaction costs to update the Oracle we wanted to right because this presents a moral hazard right because it means that uh if you can use less validators right to keep the cost lower right uh now the Oracle provider has a moral hazard where you know they of course they want to use less validators right um because it means they can generate more profit but this is terrible from an end user perspective because less validators means less security and uh and less decentralization right so we really wanted to decouple this relationship right and this optimistic Shore algorithm that we came up with allows us to decouple that relationship so unlike other protocols other Oracle protocols which have to limit the amount of validator right and have limited security limited decentralization uh Chronicle can support a near Unlimited lied amount of validators for the same kind of fixed Oracle update cost and that's like the that's the secret sauce that's what makes chronical so so amazing so um couple obstacles that we ran into were that we wanted to have like a single implementation of kind of the chronical oracles that works across every single chain um and for those of you who know a little bit about blockchains you kind of know that they're all different they all have different properties um especially in how they structure the transaction costs so uh on ethereum for example um you know compute like execution cost is relatively expensive but data is relatively cheap um and then you have layer twos right where it's actually the opposite right um You have compute that's relatively cheap but data that's relatively expensive right and so these are kind of polar opposite kind of environments so how do you come up with a solution that uh that you know optimizes for scalability right on on both of those kind of paradoxically you know polar opposite kind of uh chains and then the other obstacle we ran into is that you know I I think colloquially we've come to grips with this term of like oh These Chains are evm compatible right and I think what people mean by that is that oh if you have an application on ethereum right and another chain is evm compatible right then you should in theory just be able to copy paste your application on this other evm compatible chain and it should just automatically work without having to change anything um yeah this is a total lie um Every Chain is completely different um evm compatibility doesn't necessarily mean evm equivalence and so you end up having chains that are are radically different right and start having to make changes across different chains so you know know it was really difficult to come up with a kind of solution that would just kind of work out of the box everywhere right without having to change anything so um I wanted to kind of give you I've talked a lot about scalability but I kind of wanted to give you just a raw numbers look of just how much more scalable we are and just to show you like the D dramatic difference between us and like existing Oracle Solutions uh so Chronicle with any number of validators could be one could be a thousand could be 100,000 it will always just cost 66,000 gas um and if you compare this to you know the likes of chain link and pith and Redstone I mean we see that this is a dramatic Improvement right uh so in terms of uh the kind of cost of of the Oracle right I mean uh We've really managed to scale this at the limit right uh to give you an example of just how low 66,000 gas is um 21,000 gas is the default kind of ethereum um you know uh transaction amount that you pay right it does you know if you were to send an eth to someone right it costs 21,000 gas right uh so you know 66,000 is is very very much at at the limit so um for those of you who are more technical I want to give like a very very brief uh rundown of how the algorithm Works uh for the rest of you like who aren't as technical bear with me um but we're we're almost done so um we talked about these feeds before right and so these feeds what they do right is all of these feeds as a group right they sign what's called a Shore signature right this uh one kind of signature that they all you know uh collaborated to generate and then what we do is one feed will kind of sign a vanilla signature on top of the schnor signature kind kind of uh generating what we call a promise right and so this feed is promising that if you were to verify this schnore signature it would represent a certain piece of data uh relays then kind of push this combination of the shore signature and This Promise kind of uh signature and the actual data and the Tim stamp to the Oracle contract and what the Oracle contract will do is it won't actually verify the shore signature the only thing it will do is verify the promise and so that is an extremely extremely cheap um operation and that's kind of what makes this so scalable and so what we then say is well this price is now optimistic it's not set in stone right we didn't verify the signature produced by all of the Consortium of validators right we just verified the promise of one of them and so we have like a 10-minute kind of what we call an optimistic delay right and during this 10 minutes right uh this price is not set in Stone yet and it can kind of be challenged so it's very similar to kind of the optimistic rollup model of like you commit things optimistically and then you let someone else challenge them and so during this challenge period during this 10-minute period right um anyone can call the challenge function and what the challenge function does is it just verifies the schnor signature right so there's no data availability problem right of like where do you get the data no it's like already in the contract all you have to do is call verify and we happen if the challenge is successful is the feed who made the invalid promise gets banned um and the optimistic price has dropped right and the Challenger gets a reward in eth so that's uh I I know it's a little bit complicated but I know there's a couple developers in the audience who uh who really nerd out on this stuff so uh thanks for bearing with me so um that's it for me today um but if you know you are interested in using chronical oracles please get into touch with us uh you can reach us at our email hello Chronicle lab.org uh reach out to us on Twitter Chronicle laabs um or join our Discord at chat. Chronicle labs. org uh hope to hear from you um we're also hiring for a technical project manager so um if you're interested in oracles you know if uh you know project management right is uh you know your Your Blood Sweat and Tears you know dream uh please come join us would' love to would' love to talk to you thank you 3 2 1