Supra's CEO Josh Tobkin tells Carlos Cano, Creative Lead at D-Core, why economic security guarantees aren't enough to ensure security for blockchain oracles and why cryptographic security is essential.
Josh explains that while there are some new, decently designed oracles coming onto the market, they have key security gaps. This is because most of these models are based on economic-game theory-oriented staking models as the deterrent for bad behavior.
However, it's always better to have a cryptographically secure network that leverages economic security through staking vs. just an economic security guarantee.
Josh tells us that these oracle networks simply aren't as secure as they could be-- and even though they offer insurance, by offering insurance, they may be relaxing their security guarantees.
However, the problem with oracle insurance protocols is that they only pay out the first protocol that engages with the data. Since blockchains are composable, many other protocols may be interacting with that bad data, which can lead to cascading failures.
Unfortunately, oracle insurance doesn't compensate these secondary actors for any losses they may accrue based on incorrect information-- and Oracles will certainly not be motivated to provide insurance payouts for multiple protocols that have been impacted by bad data.
Watch the full interview here:
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