Validator Set Configuration

eoracle Validator Sets are integrated into the Ethereum PoS Validator Set through the Aegis protocol, enabling Ethereum validators to participate freely in the eoracle network permissionlessly.

Validator Set Membership

eoracle implements a derivative protocol that derives its cryptoeconomic security from Ethereum staking. Through innovative infrastructure provided by Eigenlayer, Ethereum Validators are able to participate in the eoracle blockchain as part of Validator Set. Validators can initiate a withdrawal from the Validator Set, and membership can be revoked for misbehavior.

Validator Set responsibilities include block sealing, syncing eoracle state to Ethereum, and managing the Validator Set. Every eoracle block is generated by an active Validator Set that uses a BFT-tolerant consensus protocol to agree on the block's content. If participants misbehave, they can be banned from the Validator Set or penalized. Penalties include revoking rewards earned, or in malicious cases, slashing the deposited Ethereum Validator stake.

Reconfiguration

As an eoracle block is independent of the Ethereum state, a validator at time $t$ cannot assume another validator observes the same Validator Set membership at time $t$. In classical protocols, validators determine not only the next block but also the next Validator Set. This is called reconfiguration in distributed systems literature. This approach cannot be directly employed in Aegis, since both restaking and unstaking take place on Ethereum, independent of eoracle.

The challenges described here cannot be addressed by a BFT SMR reconfiguration protocol (such as GRANDPA), since membership is defined both by the eoracle blockchain and by the Ethereum state. A full analysis is included in our Technical Report.

Defining validator set membership shielded by Aegis

Each eoracle block points to its predecessor and the latest Ethereum block observed by the proposer. The Validator Set at that Ethereum block becomes the Validator Set for the next eoracle block (Figure 1).

Changing the Validator Set in every block is unnecessarily inefficient, and requires additional consensus phases , in practice, the Validator Set are updated in epochs (a set of blocks).

The next figure illustrates the topology of the chains. Most eoracle blocks ($EO1, EO2, \dots$) are generated by the Validator Set referenced by their ancestor block (signified by the same color). Periodically, an eoracle state is committed to Ethereum blocks. A commitment of state containing an invalid Validator Set will not be accepted by the smart contract on the Ethereum blockchain. In this way, valid state commitments are assured.

The algorithm thus comprises two parts;

• The eoracle node protocol generates blocks by consensus as described above. Each block's formation is tied to a Validator Set, defined by an Ethereum block

• An Ethereum contract implements the checkpointing and validator set recovery mechanism. In each checkpoint $C_{i}$, a Validator Set and its valid duration are defined. The contract accepts a new checkpoint $C_{i+1}$ if the submitting Validator Set is identified by $C_{i}$ and is still valid.

This ensures that the new checkpoint is issued by an active Validator Set.

In the unlikely event the Validator Set becomes deprecated before committing the checkpoint, the Validator Set recovery process is initiated on Ethereum.

Validator Set Recovery

As the eoracle Validator Set is formed on Ethereum, it is defined as valid for a set of blocks, also called an Epoch.

In the case that during an Epoch, the Validator Set ceases to function as intended, operations under the responsibility of the Validator Set (such as chain operation, state syncing to Ethereum, and Oracle operations) would cease.

A permissionless mechanism is implemented on the Ethereum blockchain through a smart contract interface to recover from this worst-case scenario.

The Recovery Process

Given a malfunctioning Validator Set failed to perform its responsibilities, further checkpoints of the eoracle state are halted and the ability to reset the Validator Set is enabled. A new Validator Set can issue a reset on Ethereum through a smart contract interface. This smart contract leverages the cryptoeconomic security of Ethereum and Eigenlayer infrastructure to specify a new Validator Set.

The newly formed Validator Set proposes the next block, which includes a reference to an Ethereum block that defines the Validator Set for the subsequent block, and all responsibilities falling under the Validator Set can resume. Then, from the most recent valid checkpoint, the eoracle state can continue being committed to Ethereum.