What Are the Security Risks Associated with the “Off-Chain Reporting” Process Itself?
The main risk is that the data, while collected securely off-chain, could be tampered with or censored before being submitted to the on-chain smart contract. This is mitigated by using a decentralized network of oracle nodes, cryptographic proofs (like threshold signatures), and TEEs to ensure that the data reported on-chain is exactly what the consensus of the nodes agreed upon and has not been altered in transit.
Glossar
Reporting
Disclosure ⎊ Reporting within cryptocurrency, options trading, and financial derivatives fundamentally concerns the systematic conveyance of information regarding positions, transactions, and risk exposures to regulatory bodies, exchanges, and counterparties.
Cryptographic Proofs
Attestation ⎊ Cryptographic proofs within cryptocurrency, options trading, and financial derivatives serve as verifiable evidence of state or computation, crucial for trustless systems.