Cool proposal, and I think it could get some traction/ some decent usage for the UNI token, but I think it fails for the same reason Augur sort of hasn’t taken off or Gnosis for that matter.
The way I envision it working from vitaliks post would be:
- simple uniswap oracle (twap)
- if someone thinks it’s corrupted, you can pay a fee to dispute the result
- goes to a 1 day vote
- if that vote is still wrong (or right), someone can pay more of a dispute fee to push it to the next vote (like a 2 day vote)
- the next vote costs more to initiate and is longer…and so on and so on
eventually you have everyone in the system “staking” which is the right value (which is why the cost to break is 51% of the mkt cap)
I run Tellor and we use roughly the same thing. I think you could make the argument (like Gnosis did)…why not just use a bigger mkt cap coin of ETH?
The reason is that you hope a community that votes and is active in what a “proper” value is will be a better oracle than just allowing ETH whales (exchanges) to control the vote.
Overall it never really comes down to these scenarios though. The real “oracle” problem is figuring out how to find the tradeoffs between speed, decentralization/liveness and slight manipulability (moving the price by 1%). The current Uniswap twap oracle really bangs on the first 2, but sort of falls sort on the last one. LINK rocks on 1/3 and others like Tellor find different mixes. Handling for the long tail of preventing 51% attacks of oracle coins is a job that should be done at the user level as there are a range of appetites depending on use case for waiting weeks vs liquidating or adding penalties.