SIGNUM: A Decentralized Oracle Protocol for Pulsechain

Abstract

SIGNUM is a decentralized oracle protocol designed for the Pulsechain network. Building upon the foundation of the Tellor protocol, SIGNUM introduces significant innovations, including a Private Oracle Factory and tailored staking mechanisms to enhance security, scalability, and flexibility. SIGNUM aims to be the go-to oracle solution for Pulsechain, providing accurate and reliable data feeds for decentralized applications (dApps) while balancing decentralization with the needs of specific projects through customizable private oracle instances.

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1. Introduction

As blockchain technology advances, the demand for secure, reliable, and decentralized data oracles continues to grow. Oracles are critical components that feed external data into smart contracts, enabling decentralized applications to interact with the outside world. However, existing oracle solutions often face challenges such as centralization risks, scalability issues and a lack of customization options.

SIGNUM addresses these challenges by offering a dual-platform oracle solution on Pulsechain. By retaining the core functionalities of Tellor, SIGNUM ensures a robust, decentralized public oracle network while introducing a Private Oracle Factory to cater to the specific needs of individual projects. The protocol is governed by the SIGNUM Token, which is used for staking, governance, and securing the network.

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2. Background and Motivation

The decentralized finance (DeFi) ecosystem and other blockchain-based applications require accurate and timely data. Traditional oracles often rely on centralized entities, creating single points of failure and compromising the security and trustlessness that blockchains aim to achieve.

SIGNUM is designed to mitigate these risks by providing a decentralized oracle network that is resistant to manipulation. Additionally, the introduction of private oracles allows projects to control their data flow while still benefiting from the decentralized nature of the SIGNUM network.

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3. Technical Architecture

3.1 Public Oracle Platform

The public oracle platform is the backbone of the SIGNUM protocol, offering fully decentralized data feeds that any project can use. Key features include:

• Open Participation: Anyone can become a reporter by staking a predetermined amount of SIGNUM Tokens (equivalent to $750), ensuring that only those with a vested interest participate.

• Data Requests: Users can request data feeds on any topic. The network incentivizes reporters to provide accurate data by rewarding them with SIGNUM Tokens.

• Dispute Resolution: Any data feed can be disputed by the community. Disputes are resolved through a governance vote, ensuring the accuracy and reliability of the data.

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3.2 Private Oracle Platform

The Private Oracle Factory is a novel feature of SIGNUM, allowing projects to launch their own oracle instances with customized settings:

• White-listed Reporting: Projects can white-list specific addresses that are allowed to report on their oracles, enhancing security and control.

• High-Frequency Reporting: Reports can be submitted as frequently as every block, providing up-to-date data for applications that require it.

• Dispute Mechanism: While the public cannot submit data to private oracles, they can dispute any reported data, maintaining a degree of decentralization and trustworthiness.

• Static Staking: Projects must stake a fixed amount of SIGNUM Tokens to launch and maintain their private oracle instances. The staked amount is subject to change via governance votes with a two-week notice period for adjustments.

3.3 Oracle Workflow

1. Data Request: A user requests a specific data point (e.g., the price of ETH/USD) by submitting a query along with a reward in SIGNUM Tokens.

 

1. Reporting: Reporters submit data to the network. On the public platform, any user can report, while on the private platform, only addresses that have been white-listed can submit reports.

 

1. Finalization: The data submitted by reporters is immediately finalized and fed into the requesting smart contract.

 

1. Dispute: If a stakeholder believes that the finalized data is inaccurate, they can initiate a dispute. With the initialization of the dispute process, the disputed report is removed from the contract's stored data. The disputed data is then reviewed and subjected to a community vote to determine its accuracy.

 

1. Resolution: If the community vote finds the data to be accurate, the reported data removal is reversed from the contract. If found inaccurate, the data is replaced or corrected as per the voting outcome.

 

4. Staking and Incentives

4.1 Public Platform Staking

To become a reporter on the public platform, users must stake SIGNUM Tokens worth $750. This staking mechanism ensures that reporters are committed to the network’s integrity. Reporters earn rewards in SIGNUM Tokens for providing accurate data, while malicious actors risk losing their stake if they submit incorrect or manipulated data.

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4.2 Private Platform Staking

For private oracles, projects must stake a fixed amount of SIGNUM Tokens to launch and maintain their oracle instances. This staked amount is locked for a predefined period, ensuring that the project has a long-term commitment to the network. The staked amount can be adjusted through governance, with a two-week pre-notice period to allow projects to prepare for changes.

 

 

5. Governance

5.1 Governance Token

The SIGNUM Token serves as the governance token for both public and private platforms. Token holders can participate in governance by voting on protocol upgrades, dispute resolutions and adjustments to staking requirements.

5.2 Voting Process

• Proposal Submission: Any SIGNUM Token holder can submit a proposal for a governance vote. Proposals could include changes to the protocol, adjustments to staking amounts, or dispute resolutions.

• Voting Period: Proposals are subject to a voting period during which token holders can cast their votes. The outcome is determined by the majority, with the quorum requirements varying based on the proposal type.

• Final Board Approval: In specific cases, such as appeals or high-impact decisions, a final board may be established to approve the final vote. This board's involvement ensures that critical decisions are made with due diligence.

6. Security and Decentralization

6.1 Decentralized Dispute Resolution

SIGNUM’s dispute resolution mechanism is designed to maintain the integrity of the data on the network. Any data feed can be disputed by the community, and the resolution is handled through a decentralized voting process. This ensures that the data remains accurate and trustworthy.

6.2 Private Oracle Security

Private oracles provide a controlled environment where only white-listed addresses can report data. However, the public’s ability to dispute data ensures that these oracles do not become centralized points of failure.

6.3 Economic Security

The requirement to stake SIGNUM Tokens for participation in both public and private platforms creates an economic incentive for participants to act honestly. The threat of losing their stake discourages malicious behavior, while rewards encourage accurate reporting.

7. Use Cases

7.1 Decentralized Finance (DeFi)

SIGNUM provides reliable data feeds for DeFi applications, such as lending platforms, decentralized exchanges and derivatives markets. The high-frequency reporting capability of private oracles is particularly beneficial for projects that require real-time data.

7.2 Prediction Markets

Prediction markets can use SIGNUM to obtain accurate and timely data on various events. The decentralized nature of the oracle ensures that no single entity can manipulate the outcome.

7.3 Gaming and NFTs

SIGNUM can be used to feed external data into gaming applications and NFTs, enabling new and innovative use cases, such as dynamic NFTs that change based on real-world data.

8. Roadmap

8.1 Phase 1: Launch

• Deploy SIGNUM on Pulsechain with core features, including public and private platforms.

• Establish initial governance framework and staking mechanisms.

8.2 Phase 2: Expansion

• Onboard initial projects and users to the private oracle platform.

• Launch Of Random Number Generator code base.

• Introduce additional governance tools, such as the final board approval mechanism.

8.3 Phase 3: Optimization

• Optimize the oracle network for scalability and efficiency.

• Introduce new features based on community feedback and governance decisions.

9. Conclusion

SIGNUM is poised to become a critical component of the PulseChain ecosystem, offering a flexible, secure and decentralized oracle solution that meets the diverse needs of blockchain projects. By combining the strengths of the Tellor protocol with innovative features like the Private Oracle Factory, SIGNUM provides a comprehensive solution that bridges the gap between centralization and decentralization, catering to both public and private use cases.

As the Pulsechain network grows, SIGNUM will play a vital role in ensuring the integrity and reliability of data across the ecosystem, empowering dApps with the tools they need to succeed.