What Is the Economic Incentive Mechanism Used by DONs to Ensure Node Honesty?

Decentralized Oracle Networks (DONs) use a system of staking and penalization. Oracle nodes must stake a native token as collateral to participate.

If a node reports inaccurate or malicious data, its staked collateral is slashed (taken away). Conversely, nodes that consistently report accurate and timely data are rewarded with fees from the protocols that consume the data, creating a strong economic incentive for honest behavior.