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1/n
You've heard me mention #oracle pools 
with regards to upcoming stablecoins, e.g. $AgeUSD. But what are they exactly? 
Let's dive into it & start connecting dots together.
#cardano #dapps $ada #ergo $erg #wearegoingfornumber1
Source: https://ergoplatform.org/en/blog/2020-08-31-ergos-oracle-pools-and-what-they-mean-for-the-ecosystem/
You've heard me mention #oracle pools with regards to upcoming stablecoins, e.g. $AgeUSD. But what are they exactly? Let's dive into it & start connecting dots together.#cardano #dapps $ada #ergo $erg #wearegoingfornumber1
Source: https://ergoplatform.org/en/blog/2020-08-31-ergos-oracle-pools-and-what-they-mean-for-the-ecosystem/
2/n
What is an ideal #Oracle on #cardano?
core blockchain infrastructure – run as a public service accessible by any dApp and developer
free at the point of use
But before we get there - let's step back a bit.
What is an ideal #Oracle
on #cardano? core blockchain infrastructure – run as a public service accessible by any dApp and developer free at the point of useBut before we get there - let's step back a bit.
3/n
What actually a standard is:
element of DeFi infrastructure.
bridge between world of blockchain & data from real world 
Integrity of major use cases, including stablecoins & lending platforms, relies on s that are fit for purpose.
What actually a standard
is: element of DeFi infrastructure. bridge between world of blockchain & data from real world Integrity of major use cases, including stablecoins & lending platforms, relies on s that are fit for purpose.
4/n
dApps ands on #ethereum look like this:
dApp wishes to acquire info from the outside & makes a request to an by paying into its smart contract (using a dedicated oracle token).
obtains data & submits it back to the contract that called it via a separate Tx.
dApps and
s on #ethereum look like this:dApp wishes to acquire info from the outside & makes a request to an by paying into its smart contract (using a dedicated oracle token). obtains data & submits it back to the contract that called it via a separate Tx.
5/n
Issue?
Info is sent solely to #dApp that requested it & no one else can use that data without paying. 
This works okay BUT typical can essentially be considered as private/esclusive service that employs a ‘pay-to-play’ model. 
Issue?
Info is sent solely to #dApp that requested it & no one else can use that data without paying. This works okay BUT typical can essentially be considered as private/esclusive service that employs a ‘pay-to-play’ model.
6/n
Insufficient for many use cases
The concept of data feeds was developed in order to improve the user experience for common pricing information.
But #eth data feeds implemented in a very trusted manner. Could be point of weakness. 
Insufficient for many use cases The concept of data feeds was developed in order to improve the user experience for common pricing information.But #eth data feeds
implemented in a very trusted manner. Could be point of weakness.
7/n
Lack a generalised approach that provides assurance about reliability of data.
how accurate is it?
how reliable/consistent is it?
No clear decentralised funding mechanism to make s sustainable over the long term
Rely on sponsorship by centralised actors.
Lack a generalised approach that provides assurance about reliability of data.how accurate is it?how reliable/consistent is it? No clear decentralised funding mechanism to make s sustainable over the long term Rely on sponsorship by centralised actors.
8/n
s are potentially too important to have such constraints.
Instead - should be public infrastructure for the DeFi sector to thrive! That's the vision coming out of #ergo and #cardano co-op.
s are potentially too important to have such constraints. Instead - should be public infrastructure for the DeFi sector to thrive! That's the vision coming out of #ergo and #cardano co-op.
9/n
UTxO model offers benefits for oracle systems that were not previously available.
Pools ofs act to decentralise the provision of data ensuring that both - process AND data - itself are more reliable. 
UTxO model offers benefits for oracle systems that were not previously available.Pools of
s act to decentralise the provision of data ensuring that both - process AND data - itself are more reliable.
10/n
New pool design:
pools break up 
into fixed epochs (e.g. 6 hours), which are subdivided into blocks (e.g. 180 two-minute blocks).
Group of within the pool agree on the data sources & each post their data points to the blockchain in their own UTxO.
New pool design:
pools break up into fixed epochs (e.g. 6 hours), which are subdivided into blocks (e.g. 180 two-minute blocks). Group of within the pool agree on the data sources & each post their data points to the blockchain in their own UTxO.
11/n
By epoch's end these data points are averaged, after removing outliers, in a final transaction which reads each data point UTxO.
This results in the pool producing a new finalized datapoint & moving forward towards the next epoch. 
By epoch's end
these data points are averaged, after removing outliers, in a final transaction which reads each data point UTxO. This results in the pool producing a new finalized datapoint & moving forward towards the next epoch.
12/n
All takes place on-chain.
Use of UTxOs also enables now use of
incentives & penalties
governance mechanisms
Allows far greater sophistication & flexibility to ensure quality + timeliness of data sets provided
All takes place on-chain. Use of UTxOs also enables now use of incentives & penaltiesgovernance mechanisms Allows far greater sophistication & flexibility to ensure quality + timeliness of data sets provided
13/n
How?s put up collateral in native 
– e.g $ADA – to participate in a pool.
‘stake slashing’ - s removed if:
fail to do its job properly
fail to collect other datapoints,
submit a wildly inaccurate datapoint (an outlier)
late to submit data
How?
s put up collateral in native – e.g $ADA – to participate in a pool. ‘stake slashing’ - s removed if: fail to do its job properly fail to collect other datapoints, submit a wildly inaccurate datapoint (an outlier) late to submit data
14/n
Model has governance voting to determine parameters for pools.
how long the epoch is
how much get paid for posting valid data points
min collateral required,
# of s per pool, etc.
High degree of flexibility based on current needs.
Model has governance voting to determine
parameters for pools. how long the epoch is how much get paid for posting valid data points min collateral required, # of s per pool, etc. High degree of flexibility based on current needs.
15/n
Other models ( $link ) are missing such governance processes/strict posting schedules.
pools turn into miniDAOs aim to provide best service & can compete according to service they provide in a free market improving overall quality of data that everyone uses.
Other
models ( $link ) are missing such governance processes/strict posting schedules. pools turn into miniDAOs aim to provide best service & can compete according to service they provide in a free market improving overall quality of data that everyone uses.
16/n
How payment distribution works?
UTxO results are posted to the blockchain & are available for anyone to use for the cost of a transaction fee.
not the standard 'pay-to-play' method: dApps can now access data for next to nothing. 
How payment distribution works?
UTxO results are posted to the blockchain & are available for anyone to use for the cost of a transaction fee. not the standard 'pay-to-play' method: dApps can now access data for next to nothing.
17/n
Access to pool data scales cleanly & at no extra cost even if more complicated protocols are built on top of oracle pools (e.g. hierarchies, or time-weighted averages).
Access to pool data scales cleanly & at no extra cost even if more complicated protocols are built on top of oracle pools (e.g. hierarchies, or time-weighted averages).
18/n
pools are paid for by the #dApps that use them over time.
While everyone can use s & everyone who uses them has an incentive to fund them, it costs very little – a small % of extra fees on a given dApp.
pools are paid for by the #dApps that use them over time. While everyone can use s & everyone who uses them has an incentive to fund them, it costs very little – a small % of extra fees on a given dApp.
19/n
Such novel pool payments will be implemented in major dApps ensuring that pools always have funds required to function.
apps:
stablecoins - $AgeUSD
wallets - @YoroiWallet or Daedalus
decentralised exchanges (DEX)
lending protocols - @liqwidfinance
Such novel
pool payments will be implemented in major dApps ensuring that pools always have funds required to function. apps: stablecoins - $AgeUSD wallets - @YoroiWallet or Daedalus decentralised exchanges (DEX) lending protocols - @liqwidfinance
20/n
These pay for key pools – as blockchain companies run their own nodes.
guarantees access to data required
helps keep the ecosystem healthy
shows they are serious about staying the distance in the DeFi sector.
These pay for key
pools – as blockchain companies run their own nodes. guarantees access to data required helps keep the ecosystem healthy shows they are serious about staying the distance in the DeFi sector.
21/n
pools are designed so that even small actors can run their own & have a funding mechanism embedded if sufficient user base acquired.
The 'pools model' means the
paid can be disbursed effectively, within a range of different pool structures.
pools are designed so that even small actors can run their own & have a funding mechanism embedded if sufficient user base acquired. The 'pools model' means the
paid can be disbursed effectively, within a range of different pool structures.
22/n
Pool-of-pools several pools aggregating data & those results being pooled/averaged.
goes to 
pool - pays funds out to next pools down hierarchy re: reliability & those pools send to most reliable within them.
User friendly: justpayment to top pool.
Pool-of-pools
several pools aggregating data & those results being pooled/averaged. goes to pool - pays funds out to next pools down hierarchy re: reliability & those pools send to most reliable within them. User friendly: just
payment to top pool.
23/n
Another scope for using signed data:
from trusted entities like large exchanges:
can submit signed data to ‘first-to-post’ pools funds are distributed to first to record data to the blockchain.
Because they are trusted - averaging process is not necessary.
Another scope for using signed data:
from trusted entities like large exchanges: can submit signed data to ‘first-to-post’ pools
funds are distributed to first to record data to the blockchain. Because they are trusted - averaging process is not necessary.
24/n
Or there can be pools that aggregate partially signed & partially unsigned data - merging best practices of both worlds.
Signed & unsigned data points can be pooled & brought together into a single datapoint - payouts can still be made cleanly by paying top pool.
Or there can be pools that aggregate partially signed & partially unsigned data - merging best practices of both worlds. Signed & unsigned data points can be pooled & brought together into a single datapoint - payouts can still be made cleanly by paying top pool.
25/25
Anyone already running pools on #cardano?
how about http://nut.link pool with 5s?
And that's it - like what you read? Stay in touch & hit follow. I learn by reading & repackaging information together with you. 
#wearegoingfornumber1 $ada #ada
Anyone already running pools on #cardano? how about http://nut.link pool with 5s? And that's it - like what you read? Stay in touch & hit follow. I learn by reading & repackaging information together with you. #wearegoingfornumber1 $ada #ada
