Mediated Consensus: Blockchain Agreement Meets Expert Knowledge

Honest Agreement, Sight Unseen

PolySwarm is the world’s first decentralized threat intelligence market. PolySwarm is made possible by blockchain-based smart contracts that enable new forms of market design. Read more about why we’re building PolySwarm, or take a deep dive into the full details in our white paper. PolySwarm is fortunate to be advised by world-renowned information security experts.

Universal Observability

At the heart of every public blockchain application is a need for mutually distrusting parties to agree on the state of the world.

In the Bitcoin ecosystem, distrusting parties agree on the contents of each other’s wallets. In the Ethereum and Tezos ecosystems, distrusting parties agree on the computation of a Turing machine. In Augur, everyone is assumed to know (or can quickly determine) facts such as:

The number of Oscars that Leonardo DiCaprio has received or

Whether the Yankees won the previous year’s World Series*

Figure A: A person observing things. He doesn’t trust his peers.

Critically, these things are observable by everyone.

This assumption of universal observability is pervasive and is central to applications ranging from prediction markets to simple asset transfer.

What if state was not universally observable? What if observing state demanded research, skill or expert knowledge? How do distrusting participants agree on a worldview that they cannot directly observe?

Mediated Consensus

Soon after we began brainstorming PolySwarm, we realized that we needed a solution to this expert-knowledge-consensus problem — and that existing blockchain designs weren’t very well suited for PolySwarm’s use case.

We call our solution mediated consensus and describe it below.

Figure B: $20 in stock photos well spent.

PolySwarm relies on public availability of ground truth concerning the malintent of files, network traffic and URLs for properly rewarding accuracy in malintent assertions. Unfortunately, observing such ground truth demands expert reverse engineering knowledge that has traditionally been siloed, resulting in duplication of effort and cost.

Mediated consensus is achievable by any market design that assigns consensus responsibility to a finite set of market participants who are:

Qualified to observe ground truth (they possess expert knowledge) Are among the most active participants in terms of liquidity — they are the biggest market makers, placing the most funds into in the market (and therefore have the most to win / lose in that moment) Have their individual interests best served by an honest market (thereby avoiding a tragedy of the commons)

Our not-so-secret hope is that the mediated consensus idea will find applicability beyond PolySwarm, maybe even in other blockchain-based markets :)

Mediated Consensus in PolySwarm

PolySwarm’s Arbiters are responsible for determining the ground truth regarding the malintent of suspect artifacts placed on PolySwarm Bounty contracts.

Consider the following list of the top 7 Ambassadors in terms of the amount of Nectar placed as Bounty rewards (maintained by a smart contract in a sliding window fashion):

1. Ambassador — promoted to Arbiter

2. Ambassador — promoted to Arbiter

3. Ambassador — promoted to Arbiter

4. Ambassador

5. Ambassador

6. Ambassador

7. Ambassador

(Precise breakdown of Arbiter percentage is subject to change.)

The PolySwarm ecosystem will treat Arbiters’ consensus as fact. All participants have reason to trust the Arbiters’ judgement and impartiality:

Arbiters are technically qualified to determine ground truth. The pool of Arbiters is chosen from the most active Ambassadors. Outreach efforts will encourage today’s threat intelligence companies to enhance their offerings by plugging into the PolySwarm ecosystem as PolySwarm’s initial Ambassadors. By definition, Arbiters are the most active market participants (with the most on the line). Arbiters’ individual interests are best served by honest ground truth. This is ensured by a Fee scheme discussed in detail in our white paper. In brief, Fees ensure that collusion arrangements between Arbiters and Security Experts seeking to pervert ground truth will fail to profit. Fees ensure that expected payout is lower than abiding by an honest market.

Connect with PolySwarm

That’s all for now; please stay in touch!

Join the conversation on Telegram, connect with us on Twitter, send us an email or sign up for notifications concerning PolySwarm’s upcoming Nectar (NCT) token sale and open source release of PolySwarm’s contract code.

~Paul Makowski, PolySwarm CTO

* These examples are lifted from Augur’s homepage.