LP-0100: Optimistic Oracle Integration

Abstract

This proposal introduces UMA's Optimistic Oracle (OO) system to the Lux blockchain, providing dispute-backed price assertions for prediction markets, governance, and oracle dispute resolution. The integration leverages Lux's native G-Chain GraphQL (no external subgraph needed) and uses DLUX as the voting token for DVM disputes.

Motivation

Current oracle systems on Lux (Chainlink, Pyth, DEX TWAP) provide real-time price feeds but lack a mechanism for:

Human-readable data assertions - Questions like "Did Team X win the championship?"
Economic dispute resolution - Bond-backed assertions with escalation to token voting
Prediction market resolution - Binary/multi-outcome market settlement

UMA's Optimistic Oracle fills these gaps with a battle-tested dispute mechanism used by Polymarket and other major protocols.

Specification

Core Contracts

Contract	Location	Purpose
`OptimisticOracleV3`	`contracts/uma/optimistic-oracle/`	Core assertion/dispute engine
`Finder`	`contracts/uma/registry/`	Service locator for DVM components
`Store`	`contracts/uma/registry/`	Oracle fee management
`Registry`	`contracts/uma/registry/`	Contract registration
`IdentifierWhitelist`	`contracts/uma/registry/`	Approved query types

Assertion Flow

1. Asserter calls assertTruth(claim, bond) → assertionId
2. Liveness period begins (default: 2 hours)
3. If no dispute → assertion settles as TRUE
4. If disputed → escalates to DVM voting (DLUX holders)
5. Result stored on-chain, callbacks triggered

Integration with Existing Oracle

UMA becomes source #5 in Oracle.sol via UMAOracleAdapter:

// Oracle source priority
1. DEX Precompile (0x0400) - Real-time pool prices
2. Chainlink - Established feeds
3. Pyth - Low-latency feeds
4. TWAP - AMM time-weighted
5. UMA Optimistic - Dispute-backed prices (NEW)

DVM Voting

When assertions are disputed, DLUX holders vote to resolve:

Voting Token: DLUX (existing governance token)
Voting Period: 48-72 hours
Quorum: 5% of staked DLUX
Slashing: Incorrect voters lose portion of stake

Native GraphQL (No Subgraph)

Lux's G-Chain precompile (0x0500) provides native indexing:

type Query {
  assertion(id: ID!): Assertion
  assertions(status: AssertionStatus): [Assertion!]!
}

type Assertion {
  id: ID!
  asserter: String!
  claim: String!
  bond: BigInt!
  expirationTime: BigInt!
  settled: Boolean!
  truthValue: Boolean
}

Rationale

Parameter	Value	Rationale
Default Liveness	7200 seconds (2 hours)	Balance speed vs security
Burned Bond %	50%	Incentivize correct assertions
Min Bond	Configurable per market	Flexibility for different use cases
DVM Voting Period	48 hours	Allow global participation

Backwards Compatibility

This LP is fully backwards compatible. It introduces a new, optional oracle system and does not alter any existing oracle integrations or core protocol behavior. Existing applications that do not integrate with the Optimistic Oracle will be unaffected.

Test Cases

Assertion and Settlement: A test case where an assertion is made and settles correctly after the liveness period without a dispute.
Dispute and Voting: A test case where an assertion is disputed, voting occurs, and the dispute is resolved correctly based on the vote outcome.
Slashing: A test case to verify that incorrect voters are slashed as expected.
GraphQL Interface: A test case to query assertions and their statuses via the G-Chain GraphQL interface.

Security Considerations

Economic Security: Bond requirements deter spam; slashing punishes incorrect votes
Time-locked Resolution: 2-hour liveness prevents same-block manipulation
DVM Fallback: Human judgment for ambiguous cases
Circuit Breakers: Integration with existing Oracle.sol protections

Implementation

Contracts deployed to ~/work/lux/standard/contracts/uma/:

optimistic-oracle/OptimisticOracleV3.sol
optimistic-oracle/interfaces/IOptimisticOracleV3.sol
registry/Finder.sol
registry/Store.sol
registry/Registry.sol
registry/IdentifierWhitelist.sol

Optimistic Oracle Integration