Augur has a proven track record on resolving oracle questions correctly on markets that people care about. However, to enable this level of security the resolution time is slow. Augur v2 added a fast disputing mechanism that enables reporting rounds to be really fast at beginning and only slow down to slower length periods on higher stakes. Augur v2 also enabled prestaking on these slow rounds that allows users to stake significant sums of REP even before the disputing process had even started. Augur v2’s changes were improvements towards the right direction, but the Oracle is still very slow.
To fix these problems and more, Para Oracle was invented. Para Oracle is a module (a DeFi Lego brick) that can be plugged on top of V2 and enable users of Augur to customize their oracle needs, while at the same time rely on the security of Augur when its needed. Para oracle attempts to figure out the answer on its own, but when it fails to do it, it will fall back to ask the question from Augur itself.
Para Oracle is a an alternative disputing mechanism that can be built to be really fast. And if people are disagreeing with the outcomes of the rapid firing Para Oracle, the Para Oracle will give up its power and ask the slower Augur oracle for the answer, using the old and trustworthy disputing system that we all love.
Para Oracle can also enable unbelievable new features on top of Augur that has never seen before in Augur ecosystem:
- Using Para Oracle as a price feed
Solving Price feed is a holy grail for many DeFi protocols, it’s the weakest link of many protocols, if you can manipulate the price feed you often can take over the whole protocol and steal all the funds. Uniswap’s TWAP is a good solution for many price feed problems, but it doesn’t help us to retrieve Fiat to cryptocurrency price feed.
Para Oracle can be used to retrieve Fiat to cryptocurrency price by having a bot to report the price to the Para Oracle. Para Oracle disputers can then dispute the price if its seen incorrect. In an unfortunate case where Para Oracle fails to figure out the correct price, Augur Oracle kicks in and reports it correctly. This enables us to have a price oracle that always return the correct price. However, when the price oracle is under attack, it would resolve a lot slower, while still always providing the correct value in the end. Attacking such price oracle can become insanely expensive as the attacker would need to dispute multiple price feeds (depending on frequency of queries) to be able to disrupt the DeFi protocol significantly.
2. Markets with dynamic end time
Sometimes its really difficult to estimate when the event the market considers takes place. For example you could have a sports market at predetermined time, but then the game is delayed because of weather. Para Oracle could allow markets to end between dynamics times by having a vote if a market should continue or not. Para oracle also could allow markets that are never ending, such as price feed oracles.
3. Just In Time Markets
Just In Time (JIT) markets are markets that do not exist before the disputing process has even started. The JIT market needs to pay fees when the Para Oracle Market is created, but the market needs to be created on Augur system only if its needed; when the Para Oracle has failed to dispute the market on its own. This enables significant gas savings, and also enables creation of markets that have really small Open Interest. One could make a bet with a friend and submit that bet on Para Oracle to resolve.
4. Layer 2 disputing
As the initial Para Oracle disputing happens outside Augur’s disputing system, it can happen in Layer 2 and can be made really gas efficient and fast.
5. Fast iteration
Para Oracle enables fast development iteration on top of Augur core protocol, while at the same time keeping the Augur sound and secure. We can keep making modifications and adjustments on Para Oracles without modifying the underlying protocol!
Lets build on top!
