DORA: Distributed Oracle Agreement with Simple Majority

Abstract: Oracle networks feeding off-chain information to a blockchain are required to solve a distributed agreement problem since these networks receive information from multiple sources and at different times. We make a key observation that in most cases, the value obtained by oracle network nodes from multiple information sources are in close proximity. We define a notion of agreement distance and leverage the availability of a state machine replication (SMR) service to solve this distributed agreement problem with an honest simple majority of nodes instead of the conventional requirement of an honest super majority of nodes. Values from multiple nodes being in close proximity, therefore, forming a coherent cluster, is one of the keys to its efficiency. Our asynchronous protocol also embeds a fallback mechanism if the coherent cluster formation fails. Through simulations using real-world exchange data from seven prominent exchanges, we show that even for very small agreement distance values, the protocol would be able to form coherent clusters and therefore, can safely tolerate up to $1/2$ fraction of Byzantine nodes. We also show that, for a small statistical error, it is possible to choose the size of the oracle network to be significantly smaller than the entire system tolerating up to a $1/3$ fraction of Byzantine failures. This allows the oracle network to operate much more efficiently and horizontally scale much better.