Oracle prices on dYdX Chain

Oracle prices on dYdX Chain

Roselynn Chang avatar
Written by Roselynn Chang
Updated over a week ago

What are oracle prices on dYdX Chain?

As part of the default settings of the v4 open source software (”dYdX Chain”), oracle prices are aggregated prices that provide up-to-date price data for different assets. The oracle price for each trading pair is used for the following:

  • Ensuring that each account is well-collateralized after each trade

  • Determining when an account should be liquidated

  • Triggering "triggerable" order types such as Stop-Limit and Take-Profit orders

How are oracle prices determined on dYdX Chain?

As part of the default settings on dYdX Chain, oracle prices will be determined by the current validator set of the network. In addition to verifying transactions and validating data, validators are also responsible for determining and verifying the oracle price. Once the oracle price is agreed upon during consensus, the oracle price is used to trigger “triggerable” order types such as Stop-Limit and Take-Profit orders.

How do validators agree on oracle price?

As part of the default settings on dYdX Chain, every validator would run a continuous process to calculate the fair market price for relevant assets. The block proposer suggests any needed price changes within the proposed blocks. Other validators then apply certain rules to agree on the prices in a manner that prevents misuse. If the block is accepted, the prices also get approved.

By following a new price-acceptance criteria, this logic helps validators make sure that the new suggested price is reasonable and not too far from both the previous referenced price. It ensures that sudden and extreme changes in the price are controlled and reasonable.

Disclaimer and Terms

This document may provide information with respect to the default settings of dYdX Trading Inc. (”dYdX”) v4 software, or non-mandatory guidelines and suggestions that may help with using v4 software. dYdX does not deploy or run v4 software for public use, or operate or control any dYdX Chain infrastructure. dYdX is not responsible for any actions taken by other third parties who use v4 software. dYdX services and products are not available to persons or entities who reside in, are located in, are incorporated in, or have registered offices in the United States or Canada, or Restricted Persons (as defined in the dYdX Terms of Use). The content provided herein does not constitute, and should not be considered, or relied upon as, financial advice, legal advice, tax advice, investment advice or advice of any other nature, and you agree that you are responsible to conduct independent research, perform due diligence and engage a professional advisor prior to taking any financial, tax, legal or investment action related to the foregoing content. The information contained herein, and any use of v4 software, are subject to the v4 Terms of Use.

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