Decentralisation trade-offs, oracle edition. After reviewing the numerous options @synthetix_io decided to implement @chainlink ~6 months ago. We viewed moving the oracle out of our control as critical to the success and growth of Synthetix. This thread is about why. 1/8
I strongly believe decentralisation resolves to censorship resistance. The higher the risk of censorship the lower the value of the protocol. Removing our proprietary oracle is not a quantitative change to censorship risk it’s a qualitative one. 2/8
There’s been some criticism of this choice due to the fact that Chainlink is not maximially decentralised. My response to that is great! A maximally decentralised oracle would simply not work for us. It would be a case of overfitting for one constraint and breaking others. 3/8
Arguably the most decentralised oracle in the space is @AugurProject, and it’s an incredible work of incentive design. But it doesn’t support supplying price feeds for a decentralised Bitmex, that’s not a criticism it is the result of the design constraints. 4/8
We are very comfortable not using maximally decentralised oracles, because chainlink is more than sufficient to move the oracle attack vector to the bottom of our censorship vector stack. Which means governance and other issues become the highest priority. 5/8
And by the time the oracles are again the largest attack vector I fully expect the Chainlink team to have iterated on the design to reduce the risk further. This is the beauty of DeFi, you don’t need to do everything you can pick and choose the best solutions in the space. 6/8
That’s why we didn’t build a new DEX because we had @UniswapExchange and @KyberSwap and hopefully soon @0xProject. It’s why we didn’t build a lending platform because we have @bzxHQ and @getnuo and hopefully @compoundfinance in their next vote :)
The critical takeaway is you don’t need, and it can be suboptimal, to be maximally decentralised. You simply need to be sufficiently decentralised for the current environment. And I’m very confident @chainlink will keep us outside of the ever expanding censorship risk bubble.
