Incentives Management

A core feature of PoS protocols is the ability to implement transparent and objective rewards and penalties mechanisms. The objective is to incentivize data validators to maintain data quality and accuracy and discourage attempts to manipulate the blockchain oracle.

The fundamental prerequisites to enable a quality mechanism are:

1. Inaccurate data reports should be detectable

2. Honest mistakes and malicious manipulation attempts should be distinguishable

3. Faults should be objectively attributable (which is trivial in the canonical case where data validators sign their data reports)

4. Metrics on data quality should be defined

EO chain serves as a robust infrastructure to achieve these abilities as:

1. Operators are stake-backed

2. Data validators' past activity is transparent and recorded in an immutable manner

3. Prepared on-chain components to support rewards distribution and slashing

For a fundamental analysis of blockchain oracle cryptoeconomic security and key considerations behind slashing in a subjective environment, please refer to:

🥢On-chain-Subjective Slashing FrameworkCryptoeconomic Security