corda/docs/source/oracles.rst

Writing oracle services

This article covers oracles: network services that link the ledger to the outside world by providing facts that affect the validity of transactions.

The current prototype includes an example oracle that provides an interest rate fixing service. It is used by the IRS trading demo app.

Introduction to oracles

Oracles are a key concept in the block chain/decentralised ledger space. They can be essential for many kinds of application, because we often wish to condition a transaction on some fact being true or false, but the ledger itself has a design that is essentially functional: all transactions are pure and immutable. Phrased another way, a smart contract cannot perform any input/output or depend on any state outside of the transaction itself. There is no way to download a web page or interact with the user, in a smart contract. It must be this way because everyone must be able to independently check a transaction and arrive at an identical conclusion for the ledger to maintain its integrity: if a transaction could evaluate to "valid" on one computer and then "invalid" a few minutes later on a different computer, the entire shared ledger concept wouldn't work.

But it is often essential that transactions do depend on data from the outside world, for example, verifying that an interest rate swap is paying out correctly may require data on interest rates, verifying that a loan has reached maturity requires knowledge about the current time, knowing which side of a bet receives the payment may require arbitrary facts about the real world (e.g. the bankruptcy or solvency of a company or country) ... and so on.

We can solve this problem by introducing services that create digitally signed data structures which assert facts. These structures can then be used as an input to a transaction and distributed with the transaction data itself. Because the statements are themselves immutable and signed, it is impossible for an oracle to change its mind later and invalidate transactions that were previously found to be valid. In contrast, consider what would happen if a contract could do an HTTP request: it's possible that an answer would change after being downloaded, resulting in loss of consensus (breaks).

The two basic approaches

The architecture provides two ways of implementing oracles with different tradeoffs:

1. Using commands
2. Using attachments

When a fact is encoded in a command, it is embedded in the transaction itself. The oracle then acts as a co-signer to the entire transaction. The oracle's signature is valid only for that transaction, and thus even if a fact (like a stock price) does not change, every transaction that incorporates that fact must go back to the oracle for signing.

When a fact is encoded as an attachment, it is a separate object to the transaction and is referred to by hash. Nodes download attachments from peers at the same time as they download transactions, unless of course the node has already seen that attachment, in which case it won't fetch it again. Contracts have access to the contents of attachments when they run.

Note

Currently attachments do not support digital signing, but this is a planned feature.

As you can see, both approaches share a few things: they both allow arbitrary binary data to be provided to transactions (and thus contracts). The primary difference is whether the data is a freely reusable, standalone object or whether it's integrated with a transaction.

Here's a quick way to decide which approach makes more sense for your data source:

• Is your data continuously changing, like a stock price, the current time, etc? If yes, use a command.
• Is your data commercially valuable, like a feed which you are not allowed to resell unless it's incorporated into a business deal? If yes, use a command, so you can charge money for signing the same fact in each unique business context.
• Is your data very small, like a single number? If yes, use a command.
• Is your data large, static and commercially worthless, for instance, a holiday calendar? If yes, use an attachment.
• Is your data intended for human consumption, like a PDF of legal prose, or an Excel spreadsheet? If yes, use an attachment.

Asserting continuously varying data

Let's look at the interest rates oracle that can be found in the NodeInterestRates file. This is an example of an oracle that uses a command because the current interest rate fix is a constantly changing fact.

The obvious way to implement such a service is like this:

1. The creator of the transaction that depends on the interest rate sends it to the oracle.
2. The oracle inserts a command with the rate and signs the transaction.
3. The oracle sends it back.

But this has a problem - it would mean that the oracle has to be the first entity to sign the transaction, which might impose ordering constraints we don't want to deal with (being able to get all parties to sign in parallel is a very nice thing). So the way we actually implement it is like this:

1. The creator of the transaction that depends on the interest rate asks for the current rate. They can abort at this point if they want to.
2. They insert a command with that rate and the time it was obtained into the transaction.
3. They then send it to the oracle for signing, along with everyone else, potentially in parallel. The oracle checks that the command has the correct data for the asserted time, and signs if so.

This same technique can be adapted to other types of oracle.

The oracle consists of a core class that implements the query/sign operations (for easy unit testing), and then a separate class that binds it to the network layer.

Here is an extract from the NodeInterestRates.Oracle class and supporting types:

/** A [FixOf] identifies the question side of a fix: what day, tenor and type of fix ("LIBOR", "EURIBOR" etc) */
data class FixOf(val name: String, val forDay: LocalDate, val ofTenor: Tenor)

/** A [Fix] represents a named interest rate, on a given day, for a given duration. It can be embedded in a tx. */
data class Fix(val of: FixOf, val value: BigDecimal) : CommandData

class Oracle {
    fun query(queries: List<FixOf>, deadline: Instant): List<Fix>

    fun sign(ftx: FilteredTransaction, txId: SecureHash): DigitalSignature.WithKey
}

Because the fix contains a timestamp (the forDay field), that identifies the version of the data being requested, there can be an arbitrary delay between a fix being requested via query and the signature being requested via sign as the Oracle can know which, potentially historical, value it is being asked to sign for. This is an important technique for continously varying data.

The query method takes a deadline, which is a point in time the requester is willing to wait until for the necessary data to be available. Not every oracle will need this. This can be useful where data is expected to be available on a particular schedule and we use scheduling functionality to automatically launch the processing associated with it. We can schedule for the expected announcement (or publish) time and give a suitable deadline at which the lack of the information being available and the delay to processing becomes significant and may need to be escalated.

Hiding transaction data from the oracle

Because the transaction is sent to the oracle for signing, ordinarily the oracle would be able to see the entire contents of that transaction including the inputs, output contract states and all the commands, not just the one (in this case) relevant command. This is an obvious privacy leak for the other participants. We currently solve this with FilteredTransaction-s and the use of Merkle Trees. These reveal only the necessary parts of the transaction to the oracle but still allow it to sign it by providing the Merkle hashes for the remaining parts. See merkle-trees for more details.

Pay-per-play oracles

Because the signature covers the transaction, and transactions may end up being forwarded anywhere, the fact itself is independently checkable. However, this approach can still be useful when the data itself costs money, because the act of issuing the signature in the first place can be charged for (e.g. by requiring the submission of a fresh Cash.State that has been re-assigned to a key owned by the oracle service). Because the signature covers the transaction and not only the fact, this allows for a kind of weak pseudo-DRM over data feeds. Whilst a smart contract could in theory include a transaction parsing and signature checking library, writing a contract in this way would be conclusive evidence of intent to disobey the rules of the service (res ipsa loquitur). In an environment where parties are legally identifiable, usage of such a contract would by itself be sufficient to trigger some sort of punishment.

Implementing an oracle with continuously varying data

Implement the core classes

The key is to implement your oracle in a similar way to the NodeInterestRates.Oracle outline we gave above with both query and sign methods. Typically you would want one class that encapsulates the parameters to the query method (FixOf above), and a CommandData implementation (Fix above) that encapsulates both an instance of that parameter class and an instance of whatever the result of the query is (BigDecimal above).

The NodeInterestRates.Oracle allows querying for multiple Fix-es but that is not necessary and is provided for the convenience of callers who might need multiple and can do it all in one query request. Likewise the deadline functionality is optional and can be avoided initially.

Let's see what parameters we pass to the constructor of this oracle.

class Oracle(val identity: Party, private val signingKey: PublicKey, val clock: Clock) = TODO()

Here we see the oracle needs to have its own identity, so it can check which transaction commands it is expected to sign for, and also needs the PublicKey portion of its signing key. Later this PublicKey will be passed to the KeyManagementService to identify the internal PrivateKey used for transaction signing. The clock is used for the deadline functionality which we will not discuss further here.

Assuming you have a data source and can query it, it should be very easy to implement your query method and the parameter and CommandData classes.

Let's see how the sign method for NodeInterestRates.Oracle is written:

../../samples/irs-demo/src/main/kotlin/net/corda/irs/api/NodeInterestRates.kt

Here we can see that there are several steps:

1. Ensure that the transaction we have been sent is indeed valid and passes verification, even though we cannot see all of it.
2. Check that we only received commands as expected, and each of those commands expects us to sign for them and is of the expected type (Fix here).
3. Iterate over each of the commands we identified in the last step and check that the data they represent matches exactly our data source. The final step, assuming we have got this far, is to generate a signature for the transaction and return it.

Binding to the network

Note

Before reading any further, we advise that you understand the concept of flows and how to write them and use them. See flow-state-machines. Likewise some understanding of Cordapps, plugins and services will be helpful. See running-a-node.

The first step is to create the oracle as a service by annotating its class with @CordaService. Let's see how that's done:

../../samples/irs-demo/src/main/kotlin/net/corda/irs/api/NodeInterestRates.kt

The Corda node scans for any class with this annotation and initialises them. The only requirement is that the class provide a constructor with a single parameter of type ServiceHub.

../../samples/irs-demo/src/main/kotlin/net/corda/irs/api/NodeInterestRates.kt

These two flows leverage the oracle to provide the querying and signing operations. They get reference to the oracle, which will have already been initialised by the node, using ServiceHub.cordappProvider. Both flows are annotated with @InitiatedBy. This tells the node which initiating flow (which are discussed in the next section) they are meant to be executed with.

Providing sub-flows for querying and signing

We mentioned the client sub-flow briefly above. They are the mechanism that clients, in the form of other flows, will interact with your oracle. Typically there will be one for querying and one for signing. Let's take a look at those for NodeInterestRates.Oracle.

../../samples/irs-demo/src/main/kotlin/net/corda/irs/flows/RatesFixFlow.kt

You'll note that the FixSignFlow requires a FilterTransaction instance which includes only Fix commands. You can find a further explanation of this in merkle-trees. Below you will see how to build such transaction with hidden fields.

Using an oracle

The oracle is invoked through sub-flows to query for values, add them to the transaction as commands and then get the transaction signed by the oracle. Following on from the above examples, this is all encapsulated in a sub-flow called RatesFixFlow. Here's the call method of that flow.

../../samples/irs-demo/src/main/kotlin/net/corda/irs/flows/RatesFixFlow.kt

As you can see, this:

1. Queries the oracle for the fact using the client sub-flow for querying from above.
2. Does some quick validation.
3. Adds the command to the transaction containing the fact to be signed for by the oracle.
4. Calls an extension point that allows clients to generate output states based on the fact from the oracle.
5. Builds filtered transaction based on filtering function extended from RatesFixFlow.
6. Requests the signature from the oracle using the client sub-flow for signing from above.
7. Adds the signature returned from the oracle.

Here's an example of it in action from FixingFlow.Fixer.

../../samples/irs-demo/src/main/kotlin/net/corda/irs/flows/FixingFlow.kt

Note

When overriding be careful when making the sub-class an anonymous or inner class (object declarations in Kotlin), because that kind of classes can access variables from the enclosing scope and cause serialization problems when checkpointed.

Testing

When unit testing, we make use of the MockNetwork which allows us to create MockNode instances. A MockNode is a simplified node suitable for tests. One feature that isn't available (and which is not suitable in unit testing anyway) is the node's ability to scan and automatically install oracles it finds in the CorDapp jars. Instead, when working with MockNode, use the installCordaService method to manually install the oracle on the relevant node.