Veritas: Layer-2 Scaling Solution for Decentralized Oracles on Ethereum Blockchain with Reputation and Real-Time Considerations

Blockchainsand smart contracts are pivotal in transforming interactions between systems and individuals, offering secure, immutable, and transparent trust-building mechanisms without central oversight. However, Smart Contracts face limitations due to their reliance on blockchain-contained data, a gap addressed by ’Oracles’. These bridges to external data sources introduce the ’Oracle problem’, where maintaining blockchain-like security and transparency becomes vital to prevent data integrity issues. This paper presents <i>Veritas</i>, a novel decentralized oracle system leveraging a layer-2 scaling solution, enhancing smart contracts’ efficiency and security on Ethereum blockchains. The proposed architecture, explored through simulation and experimental analyses, significantly reduces operational costs while maintaining robust security protocols. An innovative node selection process is also introduced to minimize the risk of malicious data entry, thereby reinforcing network security. <i>Veritas</i> offers a solution to the Oracle problem by aligning with blockchain principles of security and transparency, and demonstrates advancements in reducing operational costs and bolstering network integrity. While the study provides a promising direction, it also highlights potential areas for further exploration in blockchain technology and oracle system optimization.