Oracle

ResilientOracle

The Resilient Oracle is the main contract that the protocol uses to fetch prices of assets.

DeFi protocols are vulnerable to price oracle failures including oracle manipulation and incorrectly reported prices. If only one oracle is used, this creates a single point of failure and opens a vector for attacking the protocol.

The Resilient Oracle uses multiple sources and fallback mechanisms to provide accurate prices and protect the protocol from oracle attacks. Currently it includes integrations with Chainlink, RedStone, Pyth, API3, Uni v2 twap (unsafe as main source), Uni v3 twap (unsafe as main source) and Pendle oracles (once they're out on Sonic).

For every market (vToken) we configure the main, pivot and fallback oracles. The oracles are configured per vToken's underlying asset address. The main oracle oracle is the most trustworthy price source, the pivot oracle is used as a loose sanity checker and the fallback oracle is used as a backup price source.

To validate prices returned from two oracles, we use an upper and lower bound ratio that is set for every market. The upper bound ratio represents the deviation between reported price (the price that’s being validated) and the anchor price (the price we are validating against) above which the reported price will be invalidated. The lower bound ratio presents the deviation between reported price and anchor price below which the reported price will be invalidated. So for oracle price to be considered valid the below statement should be true:

anchorRatio = anchorPrice/reporterPrice
isValid = anchorRatio <= upperBoundAnchorRatio && anchorRatio >= lowerBoundAnchorRatio

For a fetched price to be valid it must be positive and not stagnant. If the price is invalid then we consider the oracle to be stagnant and treat it like it's disabled.