Oracle System

Overview

Everst uses a robust multi-oracle system to ensure accurate and manipulation-resistant price feeds for all supported assets. The protocol aggregates data from multiple trusted sources to provide reliable pricing for lending, borrowing, and liquidation calculations.

Oracle Architecture

Primary Oracle: Chainlink

• Decentralized price aggregation from multiple node operators

• Update frequency: Triggered when price deviates >0.5% or after set time intervals

• Battle-tested across DeFi with billions in secured value

• Coverage: All major tokenized stocks and stablecoins

• Latency: 1-3 block confirmation time

Secondary Oracle: Pyth Network

• High-frequency updates with sub-second latency

• Professional-grade price feeds from institutional market makers

• Confidence intervals providing price uncertainty metrics

• Pull-based model allowing on-demand price updates

• Specialized for financial market data

Price Aggregation Strategy

Dual-Oracle Verification

The protocol implements a sophisticated price aggregation mechanism:

Final Price = Aggregate(Chainlink Price, Pyth Price)

Normal Operation:

• Both oracles must report prices within 2% deviation

• Final price is the weighted average of both feeds

• Chainlink weighted 60%, Pyth weighted 40%

Divergence Handling: When oracle prices diverge by more than 2%:

• For collateral valuation: Use the lower price (conservative approach)

• For debt calculation: Use the higher price (protective measure)

• Alert triggered for manual review if divergence exceeds 5%

Fallback Mechanism

if (Chainlink fails) {
    if (Pyth available && recent) {
        use Pyth price with 10% additional haircut
    } else {
        pause affected market
    }
}

Oracle Update Mechanisms

Push-Based Updates (Chainlink)

• Automatic updates from decentralized node network

• Triggered by price deviation or heartbeat

• Gas-efficient batch updates

Pull-Based Updates (Pyth)

• Keeper bots monitor off-chain prices

• Update on-chain when deviation exceeds threshold

• User-triggered updates for immediate execution

Security Features

Price Manipulation Protection

1. Multi-source verification prevents single point of failure

2. Time-weighted average prices (TWAP) for volatile periods

3. Maximum price change limits per block (circuit breakers)

4. Staleness checks rejecting prices older than 120 seconds

Circuit Breakers

Maximum price change per update:
- Stablecoins: ±2%
- Blue-chip stocks: ±10%
- Growth stocks: ±15%
- ETFs: ±8%

Oracle Monitoring

• Real-time deviation tracking between sources

• Historical price feed analysis

• Automated alerts for anomalies

• Manual override capabilities for emergencies

Implementation Details

Smart Contract Integration

BloPriceOracle.sol:

interface IBloPriceOracle {
    function getUnderlyingPrice(BToken bToken) external view returns (uint);
    function updatePrice(address asset) external;
    function isPriceStale(address asset) external view returns (bool);
}

Price Feed Registry

Maintains mapping of assets to their oracle configurations:

• Primary oracle address

• Secondary oracle address

• Deviation thresholds

• Update frequencies

• Fallback parameters

Gas Optimization

• Batch price updates for multiple assets

• Caching mechanisms for recent prices

• Optimized storage patterns

Keeper Infrastructure

Automated Price Updates

Keeper bots continuously:

1. Monitor off-chain price sources

2. Calculate deviation from on-chain prices

3. Submit updates when thresholds exceeded

4. Compete for update rewards

Update Triggers

• Deviation trigger: Price moves >0.5%

• Time trigger: No update for >120 seconds

• Liquidation trigger: Position approaching liquidation

• User trigger: Manual update request

Oracle Governance

Parameter Management

Governed parameters include:

• Deviation thresholds

• Update frequencies

• Oracle weights

• Fallback conditions

• Circuit breaker limits

Oracle Addition Process

1. Technical evaluation of feed reliability

2. Historical data analysis

3. Integration testing on testnet

4. Gradual mainnet rollout

5. Continuous monitoring period

Tokenized Stock Considerations

Market Hours Handling

• Continuous 24/7 price feeds despite traditional market hours

• Weekend price stability mechanisms

• Holiday period adjustments

• Pre/post-market price incorporation

Corporate Actions

Special handling for:

• Stock splits

• Dividends

• Mergers and acquisitions

• Ticker changes

Emergency Procedures

Oracle Failure Response

1. Detection: Automated monitoring identifies failure

2. Fallback: Switch to backup oracle if available

3. Pause: Affected markets paused if no reliable feed

4. Resolution: Manual intervention to restore service

5. Post-mortem: Analysis and system improvements

Manual Price Override

In extreme circumstances:

• Multisig can set temporary prices

• Time-limited override period

• Automatic reversion to oracle feeds

• Full transparency on manual interventions

Future Enhancements

Planned Improvements

• Additional oracle integrations (Band, DIA)

• Machine learning for anomaly detection

• Cross-chain price verification

• Zero-knowledge proofs for price privacy

Research Areas

• Optimistic oracle mechanisms

• Decentralized keeper networks

• MEV-resistant price updates

• Quantum-resistant cryptography

Best Practices for Users

Understanding Price Impact

• Check current oracle prices before transactions

• Monitor deviation between oracles

• Be aware of update frequencies

• Consider gas costs for price updates

Risk Mitigation

• Avoid transactions during high volatility

• Maintain conservative collateral ratios

• Set up price alerts

• Understand liquidation prices

Technical References

For developers integrating with our oracle system:

• Oracle Integration Guide

• Keeper Bot Documentation

• Price Feed Contracts

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The oracle system is critical infrastructure. Report any anomalies immediately to [e-mail]