Oracles
Last updated
Last updated
The Standard Oracle Implementation
The Standard will use the Uniswap v3 TWAP oracles as this has been proven to be a solid source of data for price discovery.
As Uniswap offers good on-chain data the standard protocol also will need the data from from off-chain sources for gold/silver/oil or any asset that the DAO seems worthy to be a good hedge against inflation. For this reason we also use the data from
Potentially tokenised indices can be used as collateral as well.
TWAP
The time-weighted price algorithm (TWAP) is quite simple: the price P multiplied by how long it lasts T is continuously added to a cumulative value C.
For example,
when timestamp = 0 & ETH price = 3000: C = 0 (initialisation)
when timestamp = 200 & ETH price = 3200: C = 0 + 3000 * (200 — 0) = 600,000
when timestamp = 250 & ETH price = 3150: C = 600,000 + 3200 * (250 — 200) = 760,000
The TWAP between time (0, 250) is (760,000 — 0) / (250 — 0) = 3,040, which satisfies that price 3000 lasts for 4/5 of the time and price 3200 lasts for 1/5: 3000 * 4 / 5 + 3200 / 5 = 3,040.
