SIGNUM

What is a decentralized oracle protocol?

Signum is a decentralized oracle protocol that serves as a public resource, allowing anyone to submit, verify, dispute and access data on the blockchain. It incentivizes a network of decentralized reporters who compete for user-submitted payments, known as tips. This straightforward crypto-economic system enables almost any type of information to be published on-chain. By relying on a network of reporters rather than a single source, Signum eliminates central points of failure or vulnerability. 

How does it work?

Signum is the first decentralized oracle to launch on PulseChain, enhancing the blockchain by providing information independently of its primary validators and consensus process. By staking the required amount of Signum Tribute tokens, anyone from anywhere in the world can become a data reporter. For example, if a blockchain user needs data, such as a price feed for a lender or weather information for an insurance protocol, they submit their request to the Signum network along with a tip. Reporters notice the funded request and compete to deliver the data. The fastest reporter updates Signum’s on-chain database and receives the tip. This system ensures that users can always access up-to-date information by tipping reporters with STB.

To ensure a reliable system, there is a 12-hour waiting period after data is reported before tips can be claimed. Any STB holder can lock up some of their tokens as a fee to dispute the reported information. Once a dispute is filed, the community votes on whether to accept or reject the data. During this voting period, other reporters can submit new data to potentially earn the tip. Users can then check the on-chain database to access the updated and undisputed information. If the original reporter’s information is correct, they receive the disputer’s fee. If the disputer is correct, they are awarded the reporter’s entire stake. This process shows how reporters, users, and STB token holders work together to bring real-world data on-chain through simple crypto-economic incentives and community governance.

Private vs public oracle

An important aspect of this public oracle system is its heavy reliance on public involvement, which can lead to challenges such as organized voting manipulation or low dispute participation. To mitigate the risk of bad actors disrupting the process, Signum also offers a private oracle system. Unlike the public oracle, which allows anyone to submit data, the private oracle restricts access to a trusted, whitelisted group selected by the project using the oracle. These reliable data providers can report each block instantly, without delay, and the community can still challenge their reports through the same public dispute mechanism. This approach maintains the decentralized nature of the process, significantly reduces the risk of incorrect or malicious data, and ensures timely, accurate reporting. Additionally, it eliminates the need for tipping, as trusted reporters are incentivized through their whitelisted status and potential contractual agreements. 

Summary

Signum is a decentralized oracle protocol designed to incentivize an open, permissionless network for data reporting and validation. This enables data to be provided by anyone and verified by everyone. By adopting the private oracle model, Signum also offers a more secure and efficient framework for blockchain applications that require high data integrity. This model is ideal for projects that prioritize accuracy, reliability, and simplicity.