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6) What happens outside of DeFi? Well, centralized exchanges pull each other's API feeds for indexes, and then sanity check them, and discard them if they seem "crazy". E.g. FTX bounds any exchange at 30bps away from the median.

SBF

@SBF_FTX

Nov 10, 2020

7) And outside of crypto? How do equity futures expire (ESA, MESA, etc.?) Well.... ...sort of the same thing. They pull in some API feeds from other centralized services, like the NYSE, or KRX.

SBF

@SBF_FTX

Nov 10, 2020

8) And is it ever wrong? Yup! Sometimes it's wrong. Sometimes they disseminate data that makes no sense, and the answer is "yeah idk some dude was supposed to type in '103.54' but instead they typed '130.54', sorry about that."

SBF

@SBF_FTX

Nov 10, 2020

9) And then the things consuming the datafeeds have to decide what to do, and how to handle erroneous data. This problem isn't specific to crypto.

SBF

@SBF_FTX

Nov 10, 2020

10) For instance what do you have to deliver to create SPY? What if they file they disseminate has a typo? The answer is, well.... sort of messy. There are people at every step, trying to do something "reasonable".

SBF

@SBF_FTX

Nov 10, 2020

11) What can you do about this? There are basically 2 types of answers in DeFi. (a) just accept it. Do the best you can: have multiple datafeeds, multiple people parsing, and automated outlier handling (e.g. 3 3 141312 3 3 --> 3 3 [excluded] 3 3).

SBF

@SBF_FTX

Nov 10, 2020

12) (b) use on-chain data. That you can trust. Or, at least you can trust that the oracle reads the on-chain data correctly. So that's useful if somehow you can get trusted on-chain data.

SBF

@SBF_FTX

Nov 10, 2020

13) How can you do that? Well, you can go back to "idk some trusted people write it there". Or--in some cases--you can have the market decide. If your on-chain data is "a DEX price", and Bob thinks the oracle is way too low, he can go and buy on the DEX.

SBF

@SBF_FTX

Nov 10, 2020

14) And he can keep buying until either (i) he's hedged his exposure to the oracle, or (ii) it's now in line with what he thinks is fair. Lots of people building on

@ProjectSerum

are planning to use bonfida.com/dex/#/ prices as oracles for this reason.

SBF

@SBF_FTX

Nov 10, 2020

15) But that only works if the assets are tradable on-chain. And if not, then you're back to the drawing board. So what would a "decentralized prediction market" look like? Well much of it might be decentralized. But query how the oracle works. In the end, who writes to it?

SBF

@SBF_FTX

16) Often you can't solve it perfectly. The goal is to get as good as you can.

8:56 PM · Nov 10, 2020Twitter Web App

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and

Lengths of mental gymnastics to not bend knee to Chainlink is concerning for Serum proponents in general Reluctance to engage in industry standards hurts efficacy in general

Replying to

and

If it's not a trustless system, centralisation would probably be preferred because of accountability. Power dynamics are too biased toward bad actors.

Replying to

and

If I have to trust someone, I would want to know more about them, not less.

Replying to

and

Ive been saying that incorporating the ambiguities (and maybe even promoting them) is the solution. Predictions markets should be games of Lodden Thinks

Replying to

and

Gambling trustlessly on the outcome of an event is hard, gambling trustlessly on what you think someone will say the outcome of an event is is easier

InternetUser2718281828

Replying to

and

what about the idea to have multiple oracles serving the same data. then you pay every oracle in time spaces x to have access to the data (service).

InternetUser2718281828

Replying to

and

then you have some kind of insurance. if someones value is extremly of or intentionally wrong the insuance pays the consumer out( financial interest to provide correct data)

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