Oracles and Price Bands
Minimizing Oracle Risk
In order to minimize oracle risk, Cypher has the ability to aggregate oracle providers, the providers available on V4 will be:
When consuming oracle feeds from the given providers, prices from all available and configured providers with will be merged to produce a composite price which will be used as the final oracle price for account margining and liquidation purposes.
These have configurable parameters that allow the protocol to set weights for each of the individual oracle provider's price feeds, and the protocol will automatically adjust these weights if a certain price feed is unable to produce a result or goes stale.
Price Bands
After calculating the composite price from available oracle providers, a Time Weighted Average Price of that composite price is computed and stored on-chain. Configurable price bands exist so that if a composite price at a given point in time deviates outside of these bands, certain actions in the protocol can be disabled to safeguard user's assets. This mechanism deters price manipulation of assets which might have less available liquidity than others.
Below is a representation of how the mechanism works.
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