DIVA is an oracle agnostic protocol
Contingent pools require one data input, namely the terminal value of the reference asset, following pool expiration to determine the payoffs for long and short position tokens. For that, a user has to specify the address that is supposed to report the terminal value at the time of pool creation. The user can assign any Ethereum account, externally owned account or a smart contract, as the reporter, rendering DIVA an oracle agnostic protocol.
While this gives pool creators maximum flexibility to configure the pool settlement according to their individual setup, malicious actors may abuse it in an untrusted environment with anonymous market participants to create pools that will settle incorrectly.
To protect users from malicious pools, DIVA DAO will maintain a whitelist of trusted data providers which users can reference at pool creation. In the DIVA App, whitelisted data providers for the selected reference asset are presented to the user in a dropdown list for selection.
While pool creators retain the freedom to deviate from that whitelist and enter some other address that they trust, the incentive to do so is reduced for the following two reasons:
- Users and liquidity are expected to concentrate around markets with a trusted and reputable data provider, and
- Choosing a whitelisted data provider offers additional settlement security as a fallback data provider will step in and vote on the final reference asset value in case a whitelisted data provider fails to submit a value.