Expansion of Lido on Ethereum Oracle set

Securing Oracle operations is important to ensure the robustness of one of the core mechanisms that underlie the Lido on Ethereum protocol. In the pursuit of decentralization and a sustainable protocol work, it is proposed to expand Lido on Ethereum Oracle set with third parties.

This a proposal to expand the set, increase quorum and also compensate oracle’s gas costs retrospectively and further gas costs on a regular basis.

Current state

Existing Oracle set consists of 5 participants, all of them are Lido DAO approved Node Operators.

Quorum is 3/5 now. This means that the report finalization with rebase only occurs when there are 3 identical reports from oracles.

https://mainnet.lido.fi/#/lido-dao/0x442af784a788a5bd6f42a01ebe9f287a871243fb/

The oracle set expansion

Option 1: onboard 6 oracles and set quorum as 6/11

This a proposal to onboard following 6 new oracles to the Oracles set. All of them at the moment are not Lido DAO approved Node Operators, and this leads to the decentralization of the protocol, because the current oracle set, consisting of five node operators, will be supplemented by six third-party oracles:

1. Rated
2. bloXroute
3. Instadapp
4. Kyber Network
5. Matrixed.Link
6. Spire Blockchain

The quorum will be increased from 3/5 to 6/11.

Option 2: onboard 4 oracles and set quorum as 5/9

This vote also proposes an option that came up during the discussion on the forum: onboard only 4 instead of 6 oracles. In this case, those potential oracles that are node operators in other protocols will not get into the set. We will be happy to further cooperate with them as node operators.

In this case, the following set is offered for onboarding:

1. Rated
2. bloXroute
3. Instadapp
4. Kyber Network

Quorum will be set as 5/9.

Gas cost compensation

It is proposed to compensate retrospectively gas costs for existing 5 oracles and further gas costs for the whole set. For this purpose will be used 2/3 multisig wallet 0x5181d5D56Af4f823b96FE05f062D7a09761a5a53, which was created as a result of the Snapshot vote. Funds already owned by multisig will be used, no additional funding is required for oracle purposes.

Total amount of 25.91 ETH will be transferred from the multisig to the following addresses to compensate for costs already incurred:

| Address | Amount, ETH | | --- | --- | | x007de4a5f7bc37e2f26c0cb2e8a95006ee9b89b5 | 7.244 | | x140bd8fbdc884f48da7cb1c09be8a2fadfea776e | 3.393 | | x1d0813bf088be3047d827d98524fbf779bc25f00 | 5.003 | | x404335bce530400a5814375e7ec1fb55faff3ea2 | 4.645 | | x946d3b081ed19173dc83cd974fc69e1e760b7d78 | 5.625 |

For further compensation, gas costs will be funded through the multisig 0x5181d5D56Af4f823b96FE05f062D7a09761a5a53under already approved budget.

Gas cost analytics can be found on the dashboard.

Proposal Actions

If option 1 is supported than an on-chain vote intended to onboarding 6 oracles and setting quorum to 6/11 will be started.

If option 2 is supported than an on-chain vote intended to onboarding 4 oracles and setting quorum to 5/9 will be started.

if option 1 or option 2 is supported multisig 0x5181d5D56Af4f823b96FE05f062D7a09761a5a53 will be used for oracle gas costs compensations:

• total amount of 25.91 ETH will be transferred to the above mentioned addresses to compensate for costs already incurred.
• subsequent oracle gas costs will be compensated from the multisig.