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The Intelligence Oracle Problem
Intelligence markets are uniquely challenging in that they require indirect verification. A buyer can't directly assess the intelligence prior to a sale, because then they would possess it, and there would be nothing left to sell.
To get around this problem, buyers often use proxies for intelligence quality, such as the seller's reputation, but these are error-prone and invariably constrict possible sources of intelligence. Going off of reputation, for instance, leaves untapped the well of crypto intelligence sourced by amateur sleuths who have yet to establish their reputation, or by those wishing to remain anonymous.
Arkham solves this problem by directly verifying intelligence, so exchange participants know that intelligence on auction or successfully submitted for a bounty has been vetted by the Arkham team using proprietary technology.
Eventually, intelligence on the Arkham Intel Exchange will be verified in a decentralized manner. This requires solving the oracle problem for crypto intelligence. Arkham is soliciting grant proposals for work to solve this problem.
The intelligence oracle problem is a level of difficulty above the general oracle problem because of the requirement for indirect verification. It is not as simple as reliably retrieving the correct piece of off-chain information. The soundness of the information must be verified in a reliable decentralized way without direct access by validators.
Existing solutions to the general oracle problem, such as Chainlink DONs, provide a potential starting point for work on the intelligence oracle problem. However, DONs currently only address the problem of oracle decentralization, not indirect verification.
Promising avenues for solving indirect verification include zero-knowledge protocols, which are designed for this purpose. Thus far they have primarily been employed to verify private key validity, which is less challenging than indirect intelligence verification because it is less subjective. Intelligence verification always involves some uncertainty and ambiguity, making it especially well-suited to direct human analysis. However, there are existing methods for zero-knowledge assessment in ambiguous domains that present promising research avenues.
In sketch, a zero-knowledge decentralized solution to the intelligence oracle problem might involve a decentralized network of intelligence analyst nodes which verify intelligence that has been concealed using a zero-knowledge protocol. Compensation for the work of these intelligence validator nodes could be built into the Arkham Intel Exchange protocol through allocation of a portion of staked bounties. A benefit of deriving validator compensation from staked bounties would be that larger bounties would be prioritized for validation, providing an additional incentive to increase bounty sizes.
The Arkham Intel Exchange will employ a DON in the intel verification process. The DON serves to decentralize and secure the intel verification oracle for bounty and auction smart contracts, but the verification itself remains direct. When an indirect verification method is devised, the DON can be easily modified to refer to this new method.
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