International Association
for Cryptologic Research

Blockchain oracles are systems that connect blockchains with the outside world by interfacing with external data providers. They provide decentralized applications with the external information needed for smart contract execution. In this paper, we focus on decentralized price oracles, which are distributed systems that provide exchange rates of digital assets to smart contracts. They are the cornerstone of the safety of some decentralized finance applications such as stable coins or lending protocols. They consist of a network of nodes called oracles that gather information from off-chain sources such as an exchange market’s API and feed it to smart contracts. Among the desired properties of a price oracle system are low latency, availability, and low operating cost. Moreover, they should overcome constraints such as having diverse data sources which is known as the freeloading problem or Byzantine failures. In this paper, we define the distributed price oracle problem and present PoWacle, the first asynchronous decentralized oracle protocol that copes with Byzantine behavior.