Resilient Price Oracle

Introduction

NLX has adopted the Resilient Price Oracle protocol from Venus to enhance the reliability and security of our price feed system. This implementation addresses the limitations of single-source price oracles and introduces multiple safeguards to ensure accurate and dependable price data.

Key Features

1. Multi-Source Price Feeds

NLX’s Resilient Oracle pulls price data from several reputable sources:

• APRO
• Pyth Network
• RedStone (soon)

This diversity of sources significantly reduces the risk of price manipulation or failure from any single oracle.

2. Cross-Validation Mechanism

• Utilizes an algorithm to compare prices from different sources
• Helps identify and mitigate erroneous or stale price data

3. Fallback System

• Automatically switches to alternative sources if the primary price feed fails or provides suspicious data
• Ensures continuous operation and price accuracy

4. Flexible Per-Token Configuration

• Allows specific price oracles to be enabled or disabled for each token
• Provides the flexibility to use the most suitable source for each asset

Governance and Security

Configurable Settings

NLX governance can adjust oracle settings through improvement proposals, including:

• Pausing/resuming the oracle
• Updating price feed configurations
• Setting fixed prices for specific assets when necessary

Robust Security Measures

1. Price Continuity: Ensures smooth transitions during any system updates
2. Comprehensive Testing: Thoroughly tested in simulated environments before deployment
3. Audited Code Base: Inherits the security benefits of the audited Venus protocol

Specialized Handling for Correlated Tokens

For tokens with strong correlations (e.g., Liquid Staked Tokens), the oracle:

1. Queries the exchange rate between correlated assets using smart contracts
2. Multiplies the exchange rate by the USD market price of the underlying asset
3. Uses dedicated oracles for each LST to ensure accurate pricing

Advantages for NLX

• Enhanced resilience against oracle failures or attacks
• Improved accuracy of asset prices, reducing risks of unwarranted liquidations or inflated borrowing
• Flexibility to adapt to market changes and integrate new price data sources
• Increased overall security and stability of the NLX protocol

By implementing this battle-tested oracle system, NLX demonstrates its commitment to providing a secure and efficient DeFi platform for its users.