SPHINX V2 and Future Prospects
With the development of DeFi, TVL is increasing exponentially. As the infrastructure of DeFi, distributed oracles are becoming increasingly important thanks to its security, efficiency, and transparency.
SPHINX V1 is famous for its anti-attack features. The miners and verifiers are in a permissionless environment, resulting in effective prices under full market competition. This is extremely important in a distributed blockchain environment, because this mechanism ensures that no one or group can control the price of the oracle, thus endangering the entire DeFi ecosystem and the security of funds in TVL.
However, this also makes the competition of the oracle extremely expensive. The miners or verifiers did not have advantages in the competition based on their past good performance. If a malicious miner has a capital advantage and bears the loss of arbitrage, other miners or verifiers must work harder to bring the price back to rationality.
In SPHINX V2, the biggest improvement is that it introduces the pledge and rewarding system, and builds a safe, efficient, and credible oracle network environment, which greatly improves the security, service level, data privacy and efficiency of the quotation service. In this new trusted oracle network environment, the 1500 nodes in the V1 version are divided into guardian nodes and community nodes according to the node level.
Among them, the guardian node selects 11 nodes that have rich experience in data collection, statistics, and aggregation in the blockchain network, and have a credible record of the distributed network service level. All nodes are real-named and their experience is announced. First, the security of participants in the network is guaranteed from identity authentication. Through filtering out a batch of small and medium miners from the quotation ability, the system can avoid the problem of oracle price deviation caused by insufficient network channel redundancy, communication service bottleneck, insufficient data source identification, and malicious agents.
To become a guardian node, a certain amount of SPX Token is required to be pledged, and the pledged SPX is deducted through the reputation system when the node behaves improperly. The caller of the SPHINX oracle can view the historical quotation of the current node based on the data signature, and how much SPX has been deducted for what reason, to make a judgment on the reputation of the guardian node. In the end, SPHINX uses the governance process to remove the guardian nodes with poor reputations through the DAO voting system.
At the same time, becoming a guardian node will enjoy a 2% reward for mining, that is 5760 SPX rewards every day. When the pledge amount is less than 10 million SPX, APY will be greater than 21% (the actual APY depends on the result of the competition).
In addition to the guardian node, SPHINX is open to all miners or validators to register, and any node can apply to become a community node. Similar to the trusted computing environment in multi-party secure computing, community nodes keep the competition between miners and verifiers in the alliance trusted network environment for healthy competition.
Becoming a community node means complying with the rules of the alliance and will be deducted if deemed malicious Pledged SPX. The initial pledge amount will be decided by the SPHINX DAO organization by voting, because all community nodes will share one ten-thousandth of the mining income. In a fully competitive environment, the pledge amount and income distribution will be slightly higher than the average market level of return.
Community nodes are allowed to be freely combined into any type of oracle network, and can customize data sources, update frequency, security parameters, delivery methods, etc., and each combination can provide different quotations for different needs in the alliance trusted network Services, so as to meet the needs of different DeFi applications under a unified framework.
It is particularly important for callers to understand that the alliance trusted network guarantees that the quotation service is trustworthy. It is an information security technology that coexists with computing and protection. The entire quotation service can be detected and monitored throughout the entire process. On the other hand, the trusted network of the Oracle Alliance guarantees the privacy of the quotation service. The quotation service is only open to miners and verifiers in the environment, and data in different oracles environments is not visible, which prevents the oracles from directly copying the prices of other oracles. Thereby reducing the threat to the overall oracle network security.
SPHINX is an evolving system, and major upgrades to V2 are inseparable from users’ participation. Therefore, DAO’s voting system will affect all aspects of the system, such as the number of community nodes pledged, the guardian reputation system rating parameters, and so on. The following shows the latest Roadmap of SPHINX. V2 is the starting point of the new journey. In the trusted environment of the oracle, the guardian node and the community node will jointly provide flexible, safe and fast oracle services, such as multi-quote pairs, cross-chain quotations, off-chain price quotation, different cycle quotation services, etc., which will enhance users’ confidence in DeFi, reduce key risks, and increase the TVL and transaction volume of the entire ecosystem.