Asset Pricing & Oracles

Curvance will utilize a Dual Oracle system to increase protocol security. The Oracles used will vary between Pyth, Chainlink, Redstone, Aerodrome, UniV3, API3, and more. Every asset that can be used as collateral will require at least two different Oracle sources.

Suppose the prices from both oracles diverge due to manipulation or market volatility. In that case, the protocol may pause borrowing on the asset when specific parameters are met or by the DAO until the oracle prices converge again, preventing potential attacks against the protocol. Similarly, if a collateral asset price makes a larger-than-average move, that asset's lending market could be paused in order to avoid exploits like flash loan attacks. If either oracle price feed runs into issues pricing an asset, an error will bubble up, pausing borrowing but not liquidations for that market. We refer to the combination of these two systems as the Circuit Breaker System.

To maximize protection for stablecoin lenders, the most favorable price in regards to protecting the protocol from bad debt reported to the protocol will always be used to calculate the final asset price for a given transaction.

Example: If one oracle reports a price of $100 and the second oracle reports $101, a user borrowing against their assets will be able to borrow with a collateral value of $100.

If the user is at risk of liquidation, the stablecoins they are borrowing against have oracle prices of $1 and $1.01; it will compare their position against a price of $1.01.

Last updated