# kaal:claim:3782217-006

**Claim.** A DAO that relies on a centralized oracle will eventually be exploited, because the people controlling the oracle will become aware of their power over automated contract triggers and, given the competitive nature of capitalism, are right to take advantage of it.

**Type.** mechanism  **Support.** argued

**Holds when.**

- DAO automated by smart contracts on oracle data
- sufficient value at stake

**Source quote.**

> Eventually, the people who have the relevant power in the centralized oracle will become aware of the power they have over the DAO. Eventually there will be an opportunity to exploit that information.

**From.** Craig Calcaterra, Wulf A. Kaal, *The Importance of History In Decentralization* (2021), Oracles, page 3

**Cite as.** Craig Calcaterra, Wulf A. Kaal, The Importance of History In Decentralization (2021). SSRN: https://ssrn.com/abstract=3782217

**Verify.** sha256 of source PDF `358779557d8e7dcd101720ca0fad90b9146d24f1c7c03909eb431fcf1fb7e103` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Calcaterra%20and%20Kaal%20-%202021%20-%20The%20Importance%20of%20History%20In%20Decentralization.pdf

**Failure mode.** centralized-oracle-capture  (family: oracle-and-input-corruption)

**Topics.** smart-contracts, economics, risk-and-incentives

**Keywords.** oracles, exploitation, game-theory, smart-contracts, incentives

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.