The move will check off yet another item on the to-do list for Maker, in preparation for the launch of Multi-Collateral Dai.
Dubbed Oracles V2, the new oracle system proposes a range of new features covering everything from new price feed providers to a new governance framework and incentive structure.
MKR holders will be given the opportunity to vote on each of the proposed changes, which will be formally announced via a public governance call on September 5th.
These will then be submitted to the Governance Portal for ratification on September 16th.
The first proposal concerns the update of price feed providers from solely pseudonymous individuals, to a mixture of individuals and organizations.
Feed providers continuously submit up-to-date prices of assets to a smart contract, where they are then pooled and utilized by dApps.
Maker argues that organizations with a stake in the ecosystem will make for a more reliable source of price feeds, as they are less susceptible to coercion and have a reputation to uphold.
The proposal puts forward four crypto-related organizations to run feeds for Oracles V2, including 0x, dYdX, Set Protocol, and Gnosis.
Their integration depends on MKR holder approval via the voting process.
Appointment of Oracle Team
Oracles V2 will also involve a proposal for the appointment of an Oracle “Team”.
This party is chosen to facilitate the creation of future proposals and processes, but will not have the power to pass any changes without the prior approval of MKR holders via voting.
Oracle Governance Framework
The Oracle Governance Framework formalizes the power and responsibilities that MKR holders have over oracle processes and decision-making.
Some of the powers outlined in the proposal include adding or removing feed providers and oracles, defining the criteria for selecting them, and selecting performance metrics to gauge feed and oracle performance.
In order to maximize decentralization and the sustainability of Oracles V2, a new incentive system has also been proposed.
This proposed incentive system monetizes the oracle system by charging for feed data, with revenue going to MKR holders.
MKR holders will use part of this revenue to compensate feed providers for their services, increasing the incentive to provide accurate and truthful data in the long term.
Oracles V2 is a vital step for multi-collateral Dai, which will require reliable price data for a much larger variety of assets being used in collateralized debt positions (CDPs).
The proposed changes appear to be a leap in the right direction for greater decentralization and sustainability of the Dai ecosystem.
The discussion will open over the proposals at the MakerDAO forum, from September 9th.