DON Architecture

Decentralized Oracle Network (DON) for accurate tokenized RWA data

1. Introduction

In the burgeoning landscape of decentralized finance (DeFi), the accurate pricing and metadata of tokenized Real-World Assets (RWAs) are critical for informed decision-making and seamless trading. Credible Oracle nodes are designed to fulfill this need by aggregating and cross-validating data from various off-chain and on-chain sources, mirroring the functionality of existing oracle solutions like Chainlink. This section delves into the operational mechanics of Credible Oracle nodes, the incentive structure based on $CRED tokens, and the mechanisms for ensuring data accuracy and integrity.

2. Node Architecture

2.1 Node Structure and Licensing

Credible Oracle nodes operate within a decentralized framework where each node functions as an autonomous entity responsible for data collection and validation. Key components of the architecture include:

1. Node Licensing:

   • Node operators must acquire a node license, purchasable with $CRED tokens. This upfront investment ensures that only committed participants enter the network, promoting responsible data reporting and operational integrity.

2. Data Sources:

   • Tokenization Platforms: Nodes will source data on tokenized RWAs from platforms like Brickken, DeFactor, and Tokeny. This includes critical asset metadata such as ownership history, valuation, and compliance status.

   • Off-Chain Data Providers: Trusted financial data aggregators like Alpaca, Nasdaq, and ABX will provide real-time market data, including asset prices and trading volumes, necessary for accurate valuation.

   • On-Chain Marketplaces: Data from decentralized trading platforms such as Polytrade, Dinari, Backed, SwarmX, and Marsbase will further enrich the data pool, offering insights into liquidity, market dynamics, and transaction history.

2.2 Data Aggregation and Cross-Validation Mechanism

The core functionality of Credible Oracle nodes revolves around robust data aggregation and validation processes:

1. Data Retrieval:

   • Each node will employ RESTful APIs and smart contract interactions to regularly fetch data from the aforementioned sources. This ensures that the data remains current and reflective of the actual market conditions.

2. Cross-Validation Process:

   • Upon data retrieval, nodes will engage in a consensus-driven cross-validation process. If over 50% of the active nodes report the same value for a given data point, it is considered accurate and will be marked for inclusion in the aggregated dataset. This decentralized consensus mechanism minimizes the risk of manipulation or erroneous reporting.

3. Data Reporting:

   • Once consensus is achieved, validated data will be published to the network and made available through standardized APIs. This data can then be utilized by various decentralized applications (dApps) and on-chain contracts for real-time decision-making.

3. Incentive Structure

3.1 $CRED Token Mechanics

The $CRED token plays a pivotal role in the ecosystem, serving as both a utility and governance token:

1. Staking and Lifetime Rewards:

   • Node operators are required to stake a predetermined amount of $CRED tokens to secure their participation. The staked tokens act as a financial guarantee of their commitment to accurate data reporting.

   • Operators earn lifetime rewards based on the quantity and accuracy of the data they report. These rewards are distributed proportionally and are designed to incentivize ongoing participation and data integrity.

2. Staggered Token Release:

   • The release of staked tokens will occur gradually over a set timeframe. This mechanism is designed to encourage long-term engagement and alignment of the interests of node operators with the network’s integrity.

3.2 Penalty Mechanism for Malicious Behavior

To safeguard against dishonest reporting, a structured penalty mechanism will be instituted:

1. Slashing Protocol:

   • Nodes found to report incorrect data or engage in malicious behavior will face penalties, wherein a portion of their staked $CRED tokens will be forfeited. This “slashing” mechanism is vital for maintaining the reliability of the oracle network.

2. Reputation Management:

   • Each node will maintain a reputation score based on its historical performance in data accuracy. A low reputation score may result in restrictions on data validation capabilities until improvements are made.

4. Technical Implementation

4.1 Smart Contract Framework

The technical backbone of the Credible Oracle nodes will rely on a robust smart contract infrastructure:

1. Deployment:

   • Smart contracts will be deployed on Ethereum or compatible blockchains, managing the licensing, staking, data reporting, and reward distribution processes.

2. Consensus Mechanism:

   • A Byzantine Fault Tolerance (BFT) consensus protocol will be employed to ensure system reliability, allowing the network to function effectively even with potential node failures or malicious actors.

4.2 API Ecosystem

To enhance usability and integration:

1. Standardized API Access:

   • The validated data will be made available through standardized APIs, enabling developers to integrate reliable real-time data feeds into their dApps and on-chain contracts effortlessly.

2. Developer Support:

   • Comprehensive documentation and developer support will be provided to facilitate the integration process, ensuring that stakeholders can effectively leverage the Credible Oracle's capabilities.