►
From YouTube: Economic Incentives and Souls in Schelling-point Based Oracles by William George | Devcon Bogotá
Description
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https://archive.devcon.org/archive/watch/6/economic-incentives-and-souls-in-schelling-point-based-oracles/
Schelling-point based oracles, such as Kleros, can be used to attribute soulbound tokens (SBTs) to individuals based on subjective evaluations of their backgrounds and expertise. Moreover, mechanisms using SBTs can complement economic incentives in such oracles; for example, an SBT-conscious random selection process can determine the voters on a given question. We will focus on how the interplay of economic and social elements in such systems can be designed to maximize resistance to attacks.
Speaker(s): William George
Skill level: Intermediate
Track: Cryptoeconomics
Keywords: oracles,soulbound,incentives
Follow us: https://twitter.com/efdevcon, https://twitter.com/ethereum
Learn more about devcon: https://www.devcon.org/
Learn more about ethereum: https://ethereum.org/
Devcon is the Ethereum conference for developers, researchers, thinkers, and makers.
Devcon 6 was held in Bogotá, Colombia on Oct 11 - 14, 2022.
Devcon is organized and presented by the Ethereum Foundation, with the support of our sponsors. To find out more, please visit https://ethereum.foundation/
A
A
These
kind
of
social
layers
people
are
trying
to
add
to
ethereum
to
get
Beyond
just
kind
of
limited
Financial
logic,
particularly
in
the
context
of
shelling
point-based
oracles,
which
close
is
an
example
of
so
I'll
briefly
Begin
by
describing
plaros,
which
will
sort
of
like
give
a
sense
of
the
kind
of
examples
we're
interested
in.
So
claros
is
a
blockchain-based
dispute
resolution
platform.
A
So
the
idea
is
that
they're
incentivized
to
be
coherent
to
vote
the
same
way
as
kind
of
the
broad
Community
consensus
that
ultimately
the
Oracle
produces
and
then
any
given
participant
looks
at
the
case.
Thinks:
okay,
I!
Think
the
small
business
owner
has
the
honest
position
here
and
more
I
think
everybody
else.
All
the
other
jurors
people
in
the
community
are
going
to
think
that
the
small
business
owner
was
right.
A
So
I
want
to
vote
for
the
small
business
owner,
because
I
think
everybody
else
is
going
to
vote
for
the
small
business
owner
because
it's
the
distinguished
decision-
and
they
all
expect
me
to
vote
for
the
small
business
owner
and
ultimately
this
boils
down
to
a
notion
of
shelling
points
or
focal
points.
This
is
an
idea
introduced
by
Thomas
shelling
in
the
1970s
shelling,
went
on
to
win
the
Nobel
Prize.
A
That
selling
points
are
solutions
that
people
tend
to
use
when
trying
to
coordinate
in
the
absence
of
communication
because
they
seem
special
or
natural.
So
here
we
have
like
a
table
of
coordination
game
where
everyone
wants
to
either
vote
for
x
or
I'll
vote
for
y,
but
they
just
want
to
vote
for
the
same
thing
and
then
what
people
tend
to
coordinate
around
are
kind
of
special
seeming
Solutions.
So
here
in
Clarence,
we
think
of
honest
resolution
disputes
as
a
kind
of
as
a
shelling
point
or
a
focal
point.
A
Others
blockchain
oracles
that
use
this
include
of
ideas
related
to
this
include
ogre
enuma.
So
Claus
is
a
kind
of
like
Oracle,
specifically
designed
for
dispute
resolution,
but
more
broadly,
you
can
think
of
it
as
just
being
designed
for
the
subjective
decisions.
People
need
to
make
on
a
blockchain.
A
So
another
aspect
of
the
title
of
my
talk
is
souls
and
sold
down
tokens
so
for
those
of
you
who
aren't
familiar
I'll
briefly,
introduce
them
so
the
defining
feature
of
Soul
bound
tokens-
and
these
are
introduced
by
in
this
paper-
decentralized
Society,
finding
web
3
sold.
It
was
published
a
few
months
ago
by
while
olhaver
and
budrin,
so
these
are
tokens
that
first
of
all,
are
non-transferable
and
generally
are
thought
of
as
representing
some
social
aspect
of
people
like.
A
A
So,
by
adding
this
sort
of
richer
notion
of
identity,
you
can
have
kind
of
enough
information
about
somebody
to
judge
whether
they're
credit
worthy
and
should
be
given
an
under
collateralized
Loan,
in
a
kind
of
similar
structure
to
how
banks
in
the
traditional
world
work,
because
we
have
this
richer
notion
of
identity.
But
then,
if
you
don't
pay
your
loan
on
time,
maybe
you
get
a
soul
bound
token.
That
says
you
know
late
payments
and
then
going
forward.
You
kind
of
have
to
present
people
the
bad
with
the
good.
A
You
can't
get
rid
of
the
negative,
sell
down
tokens
short
of
burning
the
whole
wallet
and
starting
over
with
a
new
identity.
But
when
you
present
your
wallet
to
someone
they'll
be
able
to
see
okay,
they
won
this
award
and
had
this
this
this
diploma,
but
he
had
a
late
payment
and
they
make
sort
of
a
balances
kind
of
evaluations
on
your
identity,
using
all
this
information
together.
A
So
a
related
concept
that
has
to
do
with
sort
of
social
layers
on
blockchains
but
is
a
little
different,
is
something
called
proof
of
personhood.
So
particularly
the
Claro's
team
developed
proof
of
humanity,
which
is
an
example
of
a
proof
of
personhood
protocol.
So
this
is
supposed
to
be
a
civil
resistant
tool.
A
But
if
nobody
challenges
you
or
you
win
your
eventual
dispute,
you
eventually
get
on
the
list,
but
if
you're
not
a
human
being
or
you're
a
duplicate,
then
you,
when
you
submit
to
the
list,
then
this
decentralized
ecosystem
of
Challengers
will
say:
no
you
don't.
You
know
you
know
you
don't
satisfy
the
rules,
and
this
will
raise
a
Clarence
jury
that
rules
in
the
same
kind
of
subjective,
Oracle
way
that
I
described
before
using
selling
points.
A
Normally,
we
think
of
someone's
core
identity
as
having
a
private
key
that
allows
them
to
sign
some
messages,
but
here,
what's
fundamentally
defines
your
ability
to
interact
with
these
slow
down
tokens.
Is
your
ability
to
make
these
videos,
which
is
a
bit
different
so
that
that's
something
interesting
another
way
that
these
proof
of
personhood
ideas
relate
to
slow
down
tokens?
Is
that
how
gets
to
questions
about
how
you
distribute
subout
tokens
to
begin
with
so
I?
Imagine
they'll
someday
be
a
rich
ecosystem
of
slowdown
tokens
they
will
be
distributed
potentially
in
different
ways.
A
A
sort
of
a
natural
thing
to
do
is,
if
there's
an
institution
that
can
attest
to
whatever
you
like
aspect
of
your
identity,
the
solvent
token
represents.
Then
it
would
just
issue
to
that
directly.
Like
you
come
to
Devcon
and
get
a
pull-up
and
like
some
organizer
sign
some
message
saying
yep
she
was
here.
Pulp
awarded
into
the
auto
appears
automatically
in
your
wallet.
A
Maybe
your
blockchain
based,
like
course,
online,
has
some
some
University
attached
to
it
and
they
sign
something
and
give
you
your
spt,
but,
like
maybe
you
don't
the
institution,
that's
like
naturally
giving
out
the
tokens
it
would
test
your
identity,
just
isn't
equipped
for
this
they're,
not
very
blockchain
friendly.
Moreover,
maybe
there's
some
aspect
of
some
sobound
token
that
doesn't
naturally
have
an
institution
behind
it
and
something
you
could
do
is
create
a
career,
a
list
similar
to
how
proof
of
humanity
Works.
Where
you
claim
that
you
deserve
a
cell
bound
token.
A
A
So
how
does
your
selection
currently
work
in
claros?
Well,
people
stick
a
token
and
then
each
token
has
an
equal
chance
of
being
drawn,
and
you
kind
of
are
forced
to
do
that.
If
you
don't
have
another
form
of
civil
resistance,
because
if
you
try
to
give
people
like
unequal
weight,
say
people
that
have
tons
of
tokens
or
like
weighted
quadratically
or
something,
then
people
would
have
an
incentive
to
just
cut
up
their
tokens
over
multiple
addresses
to
try
to
pretend
to
be
different
people.
A
So
you're
kind
of
stuck
with
this,
like
linear
odds
of
being
drawn
in
terms
of
weight,
and
then
every
time
you
draw
someone
the
odds
of
the
next
draw.
Don't
change
like
in
any
given
draw
that
that
45
person
still
has
45
percent,
and
then
you
can
look,
do
sort
of
a
binomial
distribution
calculation
and
look
at
the
total
odds
that
the
you
know
like
a
large
sticker
will
get
a
majority
of
the
votes
on
a
given
case.
A
So
that's
an
economic
security
system
whose
security
model
basically
boils
down
to
not,
and
no
one
having
more
than
50
percent
of
the
stake,
and
particularly
like
Clarence,
has
an
appeal
system.
Without
going
into
too
much
of
the
details,
you
can
get
larger
and
larger
panels
of
jurors,
and
particularly
if
you
have
a
really
large
panel
of
jurors,
it
is
very
unlikely
that
anyone
would
be
able
to
get
a
majority
of
the
votes
on
that
panel
without
actually
having
50
of
the
stake.
A
Okay,
so
that's
like
a
purely
Economic
Security
model,
quadratic
funding.
My
the
other
motivating
example.
Suppose
you
have
different
participants,
one
Decay,
and
they
submit
contributions
C1
to
CK
to
a
project
p,
and
then
the
idea
here
is
for
those
of
you
who
aren't
already
familiar
with
it.
Is
it
like
quadratic
funding
is
used
often
to
kind
of
kind
of
give
matching
grants,
often
for
public
goods.
A
According
to
this
formula
there,
and
you
might
look
like
a
kind
of
strange
formula,
if
you're
not
previously
familiar
with
it,
but
like
notice
the
square
root
in
the
first
term.
It
basically
has
the
effect
that
if
people
submit
a
lot,
then
their
contribution
tapers
out
because,
like
square
roots,
you
know,
grow
a
lot
and
then
kind
of
level
off.
A
So
one
individual,
who
submits
like
a
tremendous
amount
of
contribution,
doesn't
have
too
big
an
effect,
even
though
like
they're,
the
more
they
contribute,
the
more
of
an
effect
they
have
with
better
to
get
a
big
matching.
Grant
is
to
have
lots
of
people
contribute,
because
each
person
contributing
gives
you
an
extra
term
in
this
sum
and
then,
as
an
example
suppose
on
the
left,
we
have
someone
with
you
know
an
Innovative
ethereum
project
that
wants
a
public.
A
A
So
your
security
model
is
your
proof
of
person.
It's
game
needs
to
be
secure
now.
What
if
I,
consider
jury
selection
in
Claro's
with
a
proof
of
person
at
scheme
where
each
person
can
only
each
person
has
to
be
on
proof
of
humanity
or
president's
game
in
order
to
be
drawn,
and
you
can
only
be
drawn
once
then.
The
first
draw
and
kind
of
the
same
as
before.
So
maybe
the
the
45
dude
gets
a
draw,
and
but
then
he
can't
be
drawn.
B
A
Everybody
else's
odds
go
up
and
you
necessarily
draw
three
different
people
and
the
overall
odds
of
anyone
getting
more
than
two
spots
is
zero.
What
happens
if
I
have
an
insecure
proof
of
person
at
scheme?
Like
take
the
pessimistic
case?
Someone
just
completely
breaks
proof
of
personhood
and
the
attacker
has
tons
of
profiles.
Then
the
first
draw
well,
nothing
happens
and
the
attacker
can
be
drawn
more
than
once,
because
he
has
all
these
profiles
and
he
probably
cut
up
his
stake
into
different
profiles.
So
the
attacker
is
still
in
this
pool.
A
Somebody
else
gets
drawn,
and
now
she
can't
be
drawn
again
because
she
only
had
one
profile
and
so
the
attacker's
odds
and
everybody
else's
odds
go
up
a
little
bit
and
then
on
the
last
Hospital.
The
attacker
has
a
slightly
higher
chance
than
he
did
before
of
getting
more
than
half
of
the
votes.
But
what's
interesting
here
is
that
it
didn't
like
he
broke
completely
broke
the
proof
of
person
in
this
game,
but
still
doesn't
completely
break
this
security.
It's
not
like.
A
He
has
an
overwhelming
chance
of
getting
all
the
votes,
so
the
security
model
here
is
that
either
your
proof
of
person
needs
to
be
secure
or
No
One
controls
more
than
x
percent
of
the
stake.
Well,
what's
X,
it
depends
exactly
on
how
many
jury
spots
there
are
in
the
distribution
of
the
other
stickers.
A
If
you
have
like
a
handful
of
whales
in
your
staking
pool,
then
when
you
remove
one
of
them,
the
attacker's
odds
go
up
a
lot,
but
if
your
staking
pool
is
really
well
distributed,
it
has
lots
of
people
with
small
Stakes.
Then
X
can
approach
50
percent,
where
the
attacker
needs
as
much
resources
as
he
did
under
the
model
without
proof
of
personhood.
A
So
these,
like
economic
and
social
layers,
layer
together
and
don't
like
only
slightly
kind
of
dilute
the
security
of
one
another
and
add
multiple
layers
of
you
know:
different
kinds
of
security
without
having
to
choose
am
I
going
to
like
have
a
Social,
Security
or
Economic
Security.
So
that's
really
nice.
So
now,
like
an
extension
of
this,
that
we're
interested
in
and
research
doing,
research
on
is
what,
if
you
try
to
wait.
People
by
sbts
can
you
do
something,
that's
kind
of
like
this
pulling
in
Social
information,
but
with
an
even
more
Rich
way.
A
So
here
people
have
different
kinds
of
sbts.
Some
people
have
a
diploma
from
there
that
blockchain
course
other
people
got
their
pull-up
from
devcons
and
people
will
want
to
contest,
want
a
hackathon
or
something,
and
then
an
idea,
that's
introduced
in
the
decentralized
society
paper.
So
they
consider
various
ways
that
you
can
weight.
People's
contributions
to
quadratic
funding,
and
one
of
them
in
particular
is
very
general.
A
So
that's
what
I'm
going
to
focus
on
and
it's
called
the
offset
match,
and
the
idea
here
is
that
you
assign
correlation
scores
between
the
participants.
You
say:
okay,
like
participant
I
has
so
many
slow
down
tokens
and
she
shares
so
many
of
them
with
participant
K,
so
I'm
going
to
give.
This
creates
like
a
like
a
correlation
score
out
of
that
and
then
I'm
going
to
solve
for
these
weights.
A
Alpha
that
solve
this
like
weird
system
of
equations,
so
that
looks
kind
of
abstract,
but
I'll
show
some
examples
and
give
some
of
my
think
how
I
think
about
this.
So
here
the
woman
in
the
blue
shirt
has
two
po
has
two
spts
and
she
shares
one
of
them
with
the
great
dude
and
the
green
shirt.
So
the
correlations
are
the
half
and
if
you
solve
for
the
alphas,
you
get
these
outfits
and
notice
that,
like
the
idea
here
is
to
kind
of
give
weights
to
anti-correlated
groups.
A
If,
like
there's
one
group
that
has
an
spt,
that's
like
really
common
and
they're
all
kind
of
aligned
with
each
other,
because
as
sort
of
evidenced
by
having
the
same
sbts,
they
should
get
less
weight.
So
here,
like
tons
of
people,
have
the
diploma,
so
each
one
of
them
kind
of
gets
less
weight,
whereas
the
two
people
that
have
other
co-ops
collectively
they
get
more
weight.
A
A
You
have
this
like
big
Matrix
of
all
the
correlation
coefficients
and
then
you're
trying
to
solve
for
this
row,
Matrix
of
the
alphas
and
if
you
squint,
and
you
take
like
a
really
extreme
case
and
you're
like
okay,
like
all
of
the
participants,
probably
fall
into
like
a
handful
of
clusters
and
the
Clusters
are
really
highly
correlated
with
each
other,
but
not
very
correlated
with
the
other
clusters.
Then
you
get
a
kind
of
Matrix
equation
that
looks
like
this
so
like
in
each
of
the
blocks
with
the
ones.
A
Those
are
clusters
of
people
that
are
very
similar
between
each
other,
but
then
zeros
show
that
they're
not
very
correlated
with
the
others.
And
then,
if
you
solve
this
Matrix
equation,
it
basically
gives
you
one
equation
per
block,
and
it
says
each
of
the
blocks
gets
roughly
equal
weight
and
that
weight
is
shared
over
the
people
in
the
block.
A
So
this
has
some
issues
and
the
people,
the
authors
of
the
centralized
Society
paper,
already
point
out
some
of
these
points,
and
they,
you
know
they
sort
of
propose
this
as
a
place
to
start
to
think
about
these
issues.
So,
first
of
all,
the
alphas
may
not
be
exist
and
they
may
not
be
unique
if
they
do
exist.
Moreover,
you
can
produce
negative
Alphas.
A
There
are
ways
you
can
sort
of
like
patch
this
you
could
say:
okay
I
got
a
negative
Alpha
I'm,
just
going
to
round
to
zero
that
might
mess
a
little
bit
with
your
linear,
algebra
philosophy.
Generally,
this
handles
how
much
weight
you
give
it
to
groups
pretty
well,
but
it
doesn't
necessarily
distribute
that
weight
naturally
to
individuals.
A
So,
like
there's
a
tendency
based
on
how
the
linear
algebra
Works
to
give
participants
with
a
subsuper
set
of
spts
compared
to
somebody
else,
zero
weight-
and
this
was
that
Quirk
that
happened
with
the
woman
in
the
blue
shirt.
She
had
strictly
more
spts
than
somebody
else,
and
so
the
motivation
for
the
quad,
the
centralized
Society
authors-
was
to
modify
this
formula
for
matching
in
quadratic
funding
to
put
Alphas
under
the
square
root.
A
So
now,
in
order
to
get
a
big
matching
Grant,
you
not
only
want
to
have
lots
of
contributions
for
lots
of
different
people.
You
want
those
people
to
have
big
outfits
and
how
do
they
get
big
Alphas
well
by
representing
groups
that,
like
don't
have
so
many
people
in
them
and
generally
in
order
to
get
a
big
matching,
Grant
you're,
going
to
need
a
lot
of
people
from
different
groups
contributing
to
your
project?
From
clarence's
perspective.
So
this
is
what
brings
me
to
this?
A
A
Will
it
allow
us
to
have
an
explicit
procedure
where,
in
some
courts
in
some
decisions
in
order
to
be
drawn,
you
need
to
have
expertise
in
relevant
cases
by
having
an
expertise
that
says
that
you
were
an
expert
in
that
case.
So
currently,
claros
has
like
a
game
theoretic
mechanism
to
discourage
people
from
sticking
where
they're,
not
experts,
but
this
would
allow
us
to
have
like
an
explicit
mechanism.
That's
an
extra
layer
of
security.
More
generally
by
having
people
that
come
from
anti-correlated
groups
as
have
different
spts
attest
to
different
experiences.
A
You
get
a
tying
into
like
wisdom
of
the
crowd's
ideas.
There's
been
a
lot
of
research
that
shows
that
groups
of
diverse
problem,
solvers
or
groups
of
different
experiences
can
often
produce
better
results
than
more
monolithic
groups.
So,
potentially
we
could
produce
better
decisions
by
by
having
this
social
layer
in
class,
but
you
have
to
ask
okay:
what's
the
security
model
here,
what
happens
particularly
if
an
attacker
breaks
the
distribution
of
an
spt?
A
If
there
are
lots
of
spts
being
ordered
by
lots
of
different
entities,
you
know,
maybe
some
of
them
will
be
more
secure
than
others,
and
then
you
have
other
questions
like?
Are
the
participants
incentivized
to
keep
the
spts
all
in
the
same
address
or
split
them
up
like
you,
you
want
people
to
sort
of
take
their
identity.
A
Well,
it's
you
want
people
to
have
at
least
certain
aspects
of
that
they're
all
in
the
same
wallet
rather
than
having
like
different
sbts
on
each
one
like
one
spt
per
wallet
or
something,
and
so
imagine
this.
For
the
first
point,
what
happens
if
an
spt
is
broken?
A
simple
example:
so
imagine
that,
like
the
attacker
can
break
the
distribution
of
this
like
diploma,
he
hacks
into
Coursera
or
whatever
and
like
can
produce
tons
of
profiles
with
the
diploma.
A
If
you
have
a
group,
as
evidenced
by
this,
that
sort
of
pulled
out
of
this
like
clustering,
algorithm
anti-correlation
mechanism,
that
has
that's
basically
just
characterized
by
having
the
diploma,
then
the
attacker
can
perfectly
copy
them.
He
can
make
an
infinite
number
of
profiles
or
a
large
number
of
profiles
that
exactly
mimic
people
in
the
group,
so
he
can
steal
all
of
their
weight
and
that's
inevitable.
You
know
no
matter
what
weighting
you
use.
What's
a
more
interesting
question
is
what
happens
if
the
attacker?
A
Well,
what
happens
if
the
group
is
characterized
by
having
ksbts
so
I?
Have
a
group
of
people
like
most
of
whom
have
the
same
ksbts?
You
know.
Maybe
they
share
a
few
ksbts
with
other
people,
but
mostly
like
they
have
those
ksbts
and
other
groups
don't
and
the
attacker
just
breaks
one
of
the
sbts
the
diploma.
Well,
then,
now
you
get
this
like
back
to
the
block
Matrix.
You
have
something
that
looks
like
like
this
now.
A
Ultimately,
you
would
want
something
that
kind
of
looks
like
what
we
had
with
proof
of
personhood
being
matched
with
the
economic
staking
where
adding
this
social
layer
kind
of
adds,
security
and
mesh
as
well
with
the
existing
Economic
Security.
So
some
there
are
other
potential
waiting
schemes.
One
could
imagine
so
this
idea
is
related
to
eigenvector
centrality
it's
some
similar
to
the
idea
used
in
the
pagerank
algorithm.
A
So
in
the
original
version
of
eigenvector
centrality,
there's
not
this
like
one
over
in
the
in
the
equation
and
conveniently
simply
enough,
you
can
kind
of
turn
it
into
a
measure
of
anti-correlation
or
anti-centrality
just
by
putting
one
over.
So
this
still
doesn't
fully
work.
It's
a
little
more
resistant
than
the
the
offset
match
to
the
the
this.
Like
question
of
what
happens
if
the
attacker
breaks
one
of
the
the
tokens,
so
more
research
can
be
done
here.
A
I
know
Glenn
wild
at
least
is
also
thinking
about
some
of
these
things.
He
had
some
similar
ideas
about
econvector
centrality
that
uses
a
different
formula,
so
we
can
continue
to
think
about
like
what
one
could
put
here.
That
would
be
attack
resistance
in
the
most
robust
way
and
just
to
conclude
so
proof
of
personal
protocols
can
provide
a
natural
base
layer
for
certain
types
of
social
recovery.
In
some
cases,
distributions
of
svts
ideas
developed
around
weight
and
quadratic
funding
contributions
by
spts
are
also
relevant
to
other
applications
like
juror
selection.
A
Maybe
you
have
some
airdrop
and
you
want
to
give
your
airdrop
to
a
diverse
member.
People
contribute
to
your
community
in
a
lot
of
different
ways:
who've
interacted
with
their
protocol
in
different
ways,
and
maybe
that
could
be
expressed
by
having
different
spts
and
but,
as
we
move
from
a
purely
economic
model
to
economic
proof
of
personhood
proof
of
personal
economic
plus
spts.
A
This
can
have
effects
on
our
security
model
and,
like
the
ideal
thing
to
have,
is
to
layer
security
so
that,
as
we
add,
these
things
like
the
system
gets
more
and
more
secure
rather
than
having
to
have
to
make
sacrifices
or
we
dilute
the
economic
security.
But
there
are
questions
about
various
security
models.
What
happens
if
an
spt
gets
broken
and
do
users
have
an
incentive
disclosure
spts?