Why Risk Oracles Matter

TODO: Complete Oracle Model & Trust Framework

This document explains the role of risk oracles in decentralized systems.

Required Sections

• What is a Risk Oracle?

  • Traditional oracles: Price feeds
  • Risk oracles: Behavioral & systemic risk feeds
  • Use cases: Lending, insurance, derivatives, staking

• Risk Oracle vs Price Oracle

  • Price: Objective, high-frequency, easily verifiable on-chain
  • Risk: Subjective, lower-frequency, requires off-chain computation
  • Trust model implications

• Why Protocols Need Risk Data

  • Lenders/Insurance: Price risk premiums based on counterparty health
  • Stakers: Avoid operators likely to slash
  • AVSs: Monitor operator set composition for systemic risk
  • Protocols: Make slashing decisions based on aggregated data

• EigenWatch's Role in the Oracle Landscape

  • Real-time operator risk scoring
  • Slashing event detection
  • Historical reputation tracking
  • Trust assumptions (see Trust Model)

• Trust Model for Risk Oracles

  • Who computes risk scores?
  • How is computation verified?
  • What are failure modes?
  • Governance & upgrades

Links & References

• Primary audience: Protocol designers, risk managers
• Prerequisites: Basic understanding of DeFi risk
• Related docs:
  • Oracle Publishing Model
  • Trust Model Deep Dive
  • Risk Scoring Methodology

Status: NOT STARTED — Requires research & protocol perspective