Decentralized oracle reading list

With all the recent talk about EigenLayer’s intersubjective forking mechanism, i.e. decentralized oracle, I couldn’t help but feel that some of the early research on this subject had been lost to history. Working as a research scientist in the mid-2010s, the “oracle problem” was one of the topics that initially drew me to crypto. I was enchanted by the idea that one could use the market to surface truth and make better decisions. At the time, it felt like an unlikely group of iconoclasts had discovered a whole new epistemology. As Paul Sztorc quipped, the idea was to “make cheap talk expensive,” using blockchains to attribute and price the quality of information over time.

There were an exceedingly small number of people contributing to this strain of para-institutional research. Robin Hanson developed some of the foundational work on prediction markets and market scoring rules, and then championed the application of these ideas—even piloting an internal prediction market circa 1990 as part of his work on the famed Project Xanadu. You can find a reading list of even earlier work drawn up by Hanson on his website.

In 2014 the popular prediction market website PredictIt was shuttered in a wave of internet gambling takedowns. A student of Hanson’s work, Paul Sztorc, saw the need to create a censorship resistant prediction market and set out to craft an L2 protocol for Bitcoin. Aptly called Truthcoin, the prediction market would act as a kind of decentralized oracle that extended Bitcoin’s “truth machine” to produce economically secure statements about the world outside the ledger.

Soon after, the Foresight Foundation then adapted some of Sztorc’s design to create a variant for Ethereum, Augur. Meanwhile Vitalik recognized that some of the core ideas could be applied to the selection of fork choice rules, helping resolve proof-of-stake’s subjective indeterminism.

In my view the oracle problem in its strongest form remains unsolved to this day. Namely, all designs are susceptible to the parasite problem in one form or another, though it’s debatable how complete a solution is required.

Skip also develops an oracle, though we do not aim to achieve the market-based guarantees of those designs described here, instead relying on quorum assumptions for security. Regardless, I thought it would be fun to compile a reading list from my old bookmarks and recover some of this lost history. I’m sure there are a number of key documents I’m missing, so I encourage people to post in the comments if you find notable omissions.

  1. Robin Hanson. Idea Futures.

  2. Robin Hanson. Logarithmic Market Scoring Rules for Modular Combinatorial Information Aggregation.

  3. Robin Hanson. Futarchy: Vote Values, But Bet Beliefs.

  4. Paul Sztorc. Truthcoin: Peer-to-Peer Oracle System and Prediction Marketplace.

  5. Vitalik Buterin. Advanced Contract Programming Example: SchellingCoin.

  6. Robin Hanson. Issues In Information Market Design.

  7. Paul Sztorc. Oracles are the Real Smart Contracts.

  8. Vitalik Buterin. The P + epsilon Attack.

  9. Vitalik Buterin. The Subjectivity / Exploitability Tradeoff.

  10. Edmund Edgar. Get the facts, hard-fork all the things.

  11. Paul Sztorc. Blockchain: The Oracle Problems.

  12. Paul Sztorc, Upgrading ‘Smart Contracts’ to ‘Wise Contracts’.

  13. Zack Bitcoin. Amoveo Whitepaper.

  14. Jack Peterson, Joseph Krug, Micah Zoltu, Austin K. Williams, Stephanie Alexander. Augur: a decentralized oracle and prediction market platform.

  15. Paul Sztorc. Bitcoin Hivemind at TabConf.

  16. Edmund Edgar. What happens when you try to fork an Ethereum token?

  17. Arthur Breitman. Towards Futarchy in Tezos.

  18. Robin Hanson. A New Truth Mechanism.

  19. Yuqing Kong. Dominantly Truthful Multi-task Peer Prediction with a Constant Number of Tasks.

  20. Gnosis. A short primer on Conditional Tokens.

  21. Hasu. The problem with prediction markets.

  22. Edmund Edgar. Branching Subjectivocratic Oracle-enshrined Rollup Governance.

  23. Edmund Edgar, Alexander Herrmann, Silke Noa Elrifai. Backstop Layer 2: A forkable L2 to secure oracles and arbitration systems.

  24. Eigen Labs. EIGEN: The Universal Intersubjective Work Token Towards the Open Verifiable Digital Commons.

Looks like Edmund Edgar was on the same wavelength. Here’s a talk he just delivered with a short overview of the Augur design.