It would be useful to have some kind of trust-minimized purchasing-power-adjacent signal onchain, so we propose one below.
A game requester posts a reward to incentivize a purchasing power report. Anyone can report by posting a threshold and ETH liquidity, which immediately starts the breaking game: anyone can try to break the reporter by finding a nonce that, combined with their address, the gameId, and the parent block hash captured at report time, hashes above the threshold.
Upon break, part of that reporter’s liquidity is used to fund the next round’s reward, while the remainder goes to the breaker. The multiplier governs how much the next round’s reward and liquidity increase.
A reporter can also be replaced during the breaking game if someone posts a sufficiently lower threshold (governed by a replacement decay parameter), which returns the incumbent’s liquidity and refreshes the settlement timer.
The game ends when the timer expires. The surviving reporter earns the reward.
Reporters are incentivized to post thresholds that are difficult enough to protect their liquidity, while competing reporters can take over the reward by posting easier thresholds. Breakers are incentivized to attack whenever the available payout exceeds their expected computational cost. Delay is managed through replacement decay & geometric liquidity escalation. The hypothesis is these competing incentives produce a useful signal of ETH value versus computational cost.
The smart contract is fairly short (~200 lines) and currently uses keccak256.
The idea is to compare the implied work per unit liquidity of surviving thresholds across time (with otherwise equivalent game parameters) to get a sense of purchasing power changes. Users can encode expected hardware efficiency changes into the terms of whatever payout is governed by this oracle output. Ideally keccak ASICs are developed before significant liquidity flows through the game.
Feedback and constructive criticism are welcome. If you can break the design, feel free to let us know!
Repo with more commentary:
Simple smart contract: