Description
From #93
If the private key is compromised (from incompetence -- this is different if the oracle is malicious), all DLCs need to be re-negotiated. Since the odds of winning/losing bets have changed since the initial bet as placed, this will likely not be a easy/fair process. This re-negotiation risk is mitigated if there are unique key pairs on a per event basis.
In case of oracle site compromise, it would be great to have a DLC cancellation mechanism where at reception of a oracle's revocation certificate a signature/secret is joint to bypass the timelock on the refund transaction. Thus broadcasting and confirming before any contract_maturity_bound expiration and preventing the oracle attacker to collude with a DLC counterparty.
I think this is an interesting topic to explore to protect DLC users from oracles failures.