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In a new post on @steemitblog, @ned and @theoretical clarified more details about the Oracles which will empower SMT creators to establish their own rules for distributing their own tokens.

The voting for the new SMTs will be account-based, instead of stake-weighted, meaning every account has one vote, both whales and minnows.

To avoid the proliferation of multiple accounts for the purpose of taking advantage of the new system, one of the most likely Oracles that SMT creators will make use of will be one for individuality verification (does this account belong to one individual and is it his/her only account?).

Without knowing more details at this point, before Oracles whitepaper is published, but using the information Ned and @theoretical released, Oracles will keep a list of accounts that meet a given criterion (in our case, that the account is held by an unique individual). When requested by the Steem blockchain, the Oracle will either confirm or infirm that the account under query is on the Oracle's (white)list.

One SMT can use one or more (up to 5) Oracles to create different criteria. One example given by Ned was that one Oracle will keep a list about accounts that pass individuality verification (for that particular SMT!) and another will keep a list about accounts that are behaving themselves in the community / on the blockchain.

One account would receive the respective smart media token only if it is on both Oracles' lists (so it's both a verified individual and behaves him/herself). The creator of the SMT can choose to distribute the token if only some criteria are met. For example, if the SMT has 5 Oracles, it can distribute the SMT reward if an account passes 3 out of 5 Oracles or even 1 out of 5 criteria.

Note that the Oracles do not affect in any way the Steem, SBD or Steem Power rewards from the Steem blockchain's rewards pool.

Also keep in mind that Oracles are tied to a specific SMT. If there will be 500 SMTs, there will be at least 500 Oracles, but most likely more, because enough SMTs will have more than one Oracle.

Oracles act like witnesses, only for SMTs, not for the blockchain. They will be compensated, just like witnesses, but in the respective SMT, not in Steem. They can be voted in or out. This will be interesting, since voting is one account - one vote, and not stake-weighted (unless Stemit only chooses to implement the one account - one vote model for content, but not for Oracles).

If voting for Oracles will be the same as for content (one account - one vote), then we will have highly democratic voting for Oracles, and stake-weighted voting for witnesses. We will see which one gives best results.

Are Oracles Good for SMTs / the Ecosystem?

In theory they are. We'll know more after the whitepaper is released and even more AFTER theory meets reality.

I'm optimistic about it.

Here are some points why:

• as more people join Steem, the Steem/SBD/SP rewards pool will become insufficient, so SMTs are practically a necessity for scalability.
• Oracles permit the targeting of as wide or as narrow audiences as the SMT creator wants.
• Oracles should be a great for preventing spam, abuse and "reward pool raping" (for that particular SMT!).
• SMTs and Oracles allow the creation of communities around special projects / apps; the fact the members are being rewarded in a distinct SMT should make these projects and communities more tied and with their own identity, which is what some look for.