CHARLI3: Scaling oracle node operator pools with selector mechanism

[GENERAL] Name and surname of main applicant

Damon Zwarich

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Entity (Incorporated)

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

8

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language

No

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

We will expand the quantity of nodes participating in a data feed network beyond 5. Our strategy will be to create a “selector” solution to pull from a pool of node operators.

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

Yes

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.”

We would be employing a dev shop to assist in delivering this project in a timely manner. Our current in house developers are fully engaged in delivering other projects. We have active contracts with Metalamp, Mlabs, and Txpipe.

[GENERAL] Will your project’s output/s be fully open source?

No

[GENERAL] Please provide here more information on the open source status of your project outputs

SECURITY RISK: This code would not be open sourced due to the security nature of it. The selection of participating nodes for an Oracle cycle is of paramount security and we would not want anyone to be able to reverse engineer this solution to potentially game the node selection system.

[SOLUTION] Please describe your proposed solution

The current Charli3 node infrastructure allows up to 5 participating nodes per data feed (eg ada/usd).

However, these are predetermined prior to a price update and the nodes supplying the feed are “hardwired” in the feed config file. Adjusting operators requires a multi-signature update of the feed.

We propose to allow a large network of node operators and to build a mechanism for selecting node operators prior to a data feed update. For example, this mechanism may randomly select 5 operators from a larger pool (eg 50) to supply the price feed. At a very basic mvp we will build the selector to randomize who gets selected. Eventually we will enhance the selector mechanism to take into account historical performance, tier level of node, and potentially other variables.

For this proposal, we want to develop a random selector mechanism that is secure such that it is protected from single point attacks to manipulate which nodes get selected. Achieving just this mvp is going to require an experienced architect along with security expert review and significant testing.

Summary of outputs:

1. onboard approx 100 node operators
2. create a list/active database of node operators available for data feeds
3. design and implement a selector mechanism locally
4. deploy the selector mechanism using a pre production data feed
5. test the deployed pre prod feed with live node operators to stress test the selector mechanism
6. Deploy a mainnet POC of a functioning selector and pool with a data feed

[IMPACT] Please define the positive impact your project will have on the wider Cardano community

By allowing a large pool of node operators, it further allows more members to help run the network and further decentralize the oracle operations. This also allows more users to gain rewards from Charli3 for being node operators.

This expansion of node randomness would also increase security for all projects using the oracle, by not allowing anyone to potentially target the nodes involved in any transaction.

Having this higher level of security will also be beneficial for spreading word of the robustness of Cardano defi oracle security.

Given the extra security of randomness we may also be able to lower node count per transaction and therefor lower costs, allowing easier monetary access to other projects

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

Capability is high. We are a tried and proven company delivering oracle operations for 1.5 years with 99.99% up time and accuracy on Cardano.

[PROJECT MILESTONES] What are the key milestones you need to achieve in order to complete your project successfully?

A:

• Create team responsible for delivering the project from contractors and in-house devs
• Start research and design phase to output an implementation plan in milestone 2

B:

• Team hired
• Team has initial sprint planning to set roadmap

C:

• Team details made public on a medium article
• Project Roadmap and summary of first sprint planning shared publicly on medium article (addressing research and design)

A:

• implementation plan created as output from previous milestones R&D
• begin implementation phase

B:

• Implementation plan completed with epics defined
• team starts working on implementation tickets

C:

• medium article describing or sharing implementation plan
• article above contains date and first set of tickets the team will work on

A:

• Using a federated network of node operators the project team deploys locally a functioning “selector mechanism”

B:

• Local MVP of the selector mechanism works as expected (likely randomizer)

C:

• Video demo of working code or PDF article describing the technical achievement

A:

• security test the local solution
• deploy to pre production to prepare for external node operator testing
• onboard test node operators to launch the mvp data feed (10+ operators)

B:

• security testing conducted
• deployed to pre production
• 10+ node operators (external) onboarded

C:

• medium article describing security testing
• video of pre production onchain activity
• list of node operators supporting the project released in the medium article update

A:

• deploy solution on mainnet

B:

• solution works as expected on mainnet

C:

• links to transactions for review
• video demo of working solution

Catalyst close out report submitted and accepted

catalyst close out video submitted and accepted

[RESOURCES] Who is in the project team and what are their roles?

Charli3 leadership - Damon and Robert

Charli3 Tech Developers

Oursourced team (potentially metalamp, txpipe, mlabs as contractors we have active relationships with right now on or off Cardano)

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources

we propose this will take a minimum of 2 full time developers, a part time scrum manager for the project, and part time architect in the early stage. all over the proposed timeline of about 8 months

Devs ~ 85/hr x 2

Scrum manager ~ 100/hr

Architect ~ 125/hr

[VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

Oracle implementations for Defi on CArdano are paramount for securing users funds. There have been 2 major liquidation events on Cardano due to lack of oracle use on Cardano causing 100s of thousands of dollars lost from community members.

additional security to Oracle features help to make the cardano ecosystem a more secure place for users to trust their funds and liquidity