How Does a DON Mitigate the Risk of a Sybil Attack?
A Sybil attack is where a single malicious actor operates multiple oracle nodes to corrupt the data feed. DONs mitigate this through economic incentives and penalties, primarily staking.
Nodes are required to stake collateral, which is slashed if they provide incorrect or malicious data. Additionally, node operators must undergo reputation and identity verification processes to ensure a diverse and credible network.
Glossar
Sybil Attack
Architecture ⎊ The Sybil attack, within cryptocurrency, options trading, and financial derivatives, exploits the inherent design vulnerabilities of distributed systems reliant on identity-based consensus.
DON
Decentralized Oracle Network ⎊ DON refers to a decentralized network of independent node operators that aggregate, validate, and attest to the accuracy of off-chain data before broadcasting it to smart contracts, thereby ensuring data reliability without reliance on a single source.