Proposal: Resolving Para-Oracle Markets in dispute on Augur Core

[pgebheim]

Resolving "ParaOracle" Markets in dispute on Augur Core

The discussion of ParaOracles as discribed by @KillariDev in his proposal in Game Theory opens up many doors for improving Augur Oracle resolution over time. As a part of this open design space, there is the possibility of "Just In Time" market creation, which would unlock the ability to create and resolve markets just on L2 in the normal case, and then only create a core augur market if the market governed by a ParaOracle would be near forking in the core system.

Example

Imagine a simple ParaOracle design which implements a KBC oracle, backstopped by the Augur Fork mechanism. In this oracle design, there could be fast disputing rounds of voting followed by a failsafe such that if there is at least 50k REP of support for one outcome, the oracle goes into normal Augur slow disputing mode.

With the above Oracle, Markets could be created / managed using only the above Oracle. These markets could, for example, live solely on a Layer2 network, keeping market creation AND resolution fast and cheap in the normal case. If this market were to receive is fail-safe amount of contribution, then and only then, someone could be paid (by the market) to bridge the dispute over to Mainnet. At that time, the Augur Core market could be created and pre-staked up to Slow Disputing (8 rounds before forking).

The benefit of the above solution is that you could create markets on Layer2, and assuming the KBC parameters are set properly you could have a fair amount of certainty that most markets would reslove without ever needing to touch Layer1. Even not considering Layer2 solutions, there are benefits to this design as one could conceptually simpler lightwight markets which do not need all of the trappings of an Augur Core market in order to be properly resolvable by a ParaOracle.

Issues

In order for the above system to work Reporters will need to shift on a rule that has been in place since Augur v1: Markets which have a known outcome at the time of market creation should resolve Invalid.

In this case, the rule would need to be amended to say that Markets which are created as part of a ParaOracle dispute process, and there is proof of that markets existence, can indeed resolve to their non-Invalid value.